<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------
                                    FORM 20-F

(MARK ONE)

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

                                       OR

[X]                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES EXCHANGE ACT OF 1934
                             FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                       OR

[ ]                TRANSITION REPORT PURSUANT TO SECTION 13
                      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE TRANSITION PERIOD FROM ____ TO ____

                         COMMISSION FILE NUMBER: 0-27298

                        BE SEMICONDUCTOR INDUSTRIES N.V.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                 THE NETHERLANDS

                 (JURISDICTION OF INCORPORATION OR ORGANIZATION)

                                  MARCONILAAN 4
                                 5151 DR DRUNEN
                                 THE NETHERLANDS

                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

TITLE OF EACH CLASS               NAME OF EACH EXCHANGE ON WHICH REGISTERED
-------------------               -----------------------------------------
Ordinary Shares                   Nasdaq National Market

SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d)
                                  OF THE ACT:
                                      None

    The number of outstanding shares of each of the issuer's classes of capital
or common stock as of December 31, 2003: 30,794,660 Ordinary Shares, nominal
value (euro) 0.91 per share (of which amount, 5,722,323 are traded on the NASDAQ
National Market in the form of New York Shares and 25,072,337 are traded on the
Amsterdam Stock Exchange in the form of Bearer Shares).

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

                                 Yes [X]    No [ ]

    Indicate by check mark which financial statement item the Registrant has
elected to follow.

                           Item 17 [ ]   Item 18 [X]

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
                                                 PART I

<S>                                                                                              <C>
Item 1:   Identity of Directors, Senior Management and Advisers..........................        1
Item 2:   Offer Statistics and Expected Timetable........................................        1
Item 3:   Key Information................................................................        1
Item 4:   Information on the Company.....................................................        7
Item 5:   Operating and Financial Review and Prospects...................................        19
Item 6:   Directors, Senior Management and Employees.....................................        30
Item 7:   Major Shareholders and Related Party Transactions..............................        37
Item 8:   Financial Information..........................................................        37
Item 9:   The Offer and Listing..........................................................        37
Item 10:  Additional Information.........................................................        38
Item 11:  Quantitative and Qualitative Disclosure About Market Risk......................        47
Item 12:  Description of Securities other than Equity Securities.........................        47
Item 13:  Defaults, Dividend Arrearages and Delinquencies................................        47
Item 14:  Material Modifications to the Rights of Security Holders and Use of Proceeds...        47
Item 15:  Controls and Procedures........................................................        47
Item 18:  Financial Statements...........................................................        48
Item 19:  Exhibits.......................................................................        48
</TABLE>

    In this Annual Report on Form 20-F, references to "Besi" or the "Company"
are to BE Semiconductor Industries N.V. and references to "we" or "us" are to BE
Semiconductor Industries N.V., and, as the context requires, its wholly owned
subsidiaries.

    Our consolidated financial statements are prepared in accordance with US
GAAP. Our consolidated financial statements are expressed in euro, the currency
of the European Economic and Monetary Union, which was introduced on January 1,
1999. In this Form 20-F, references to "euro" or "(euro)" are to euro, and
references to "US dollars," "US$" or "$" are to United States dollars.

    For convenience purposes, our financial information for the most recently
completed fiscal year has been presented in US dollars, converted at an exchange
rate of $ 1.2597 = (euro) 1.00, the noon buying rate (rounded) on December 31,
2003, for cable transactions in foreign currencies as certified by the Federal
reserve Bank of New York. The noon buying rate on April 30, 2004 was $ 1.1975 =
(euro) 1.00. These translations should not be construed as a representation that
the euro amounts actually represent US dollar amounts or could be converted into
US dollar amounts at the rate indicated or at any other rate.

    Our fiscal year ends on December 31 of each year. References to any specific
financial year or to "FY" refer to the year ended December 31 of the calendar
year specified.

<PAGE>

                           FORWARD LOOKING STATEMENTS

    This Form 20-F contains certain forward-looking statements and information
relating to us that are based on beliefs of our management as well as
assumptions made by and information currently available to us. Without limiting
the foregoing, when used in this document, the words "anticipate", "believe",
"estimate", "expect", "intend", "plan" and "project" and similar expressions, as
they relate to us or our management, are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and assumptions. Many
factors could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements, including, among
others, changes in general economic and business conditions, changes in currency
exchange rates and interest rates, introduction of competing products by other
companies, lack of acceptance of new products or services by our targeted
customers, changes in business strategy and various other factors, both
referenced and not referenced in this Form 20-F. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected, intended, planned or projected. We
do not intend, and do not assume any obligation, to update these forward-looking
statements.

<PAGE>

                                     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

SELECTED CONSOLIDATED FINANCIAL AND STATISTICAL DATA

    The selected consolidated financial data set forth below for the years ended
December 31, 2001, 2002 and 2003 and as of December 31, 2002 and 2003 are
derived from our consolidated financial statements, which appear elsewhere in
this Form 20-F, and which have been audited by KPMG Accountants N.V. The
selected consolidated financial data set forth below for the years ended
December 31, 1999 and 2000, and as of December 31, 1999, 2000 and 2001 are
derived from our audited consolidated financial statements, which are not
included in this Form 20-F. The data set forth below should be read in
conjunction with Item 5. - "Operating and Financial Review and Prospects" and
our consolidated financial statements and notes thereto included elsewhere in
this Form 20-F.

(Amounts in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                  ------------------------------------------------------------------------------
                                                      1999         2000        2001          2002           2003        2003
                                                      EURO         EURO        EURO          EURO           EURO       USD(1)
                                                  ------------------------------------------------------------------------------
<S>                                               <C>          <C>         <C>            <C>            <C>          <C>
STATEMENTS OF OPERATIONS

Net sales                                            105,645      197,972     150,030         83,228         85,500      107,704
Cost of sales                                         71,041      121,171      96,253         55,849         63,345       79,795
                                                  ------------------------------------------------------------------------------
Gross profit                                          34,604       76,801      53,777         27,379         22,155       27,909

Selling, general and administrative expenses          26,490       33,841      30,563         26,235         25,436       32,042
Research and development expenses                      7,612       11,440      15,446         12,470         13,564       17,087
Write-off of in-process research and development           -       11,461           -              -              -            -
Restructuring charges (release)                       (1,067)           -       8,306            786              -            -
Impairment of intangibles                                  -            -           -          3,302            287          361
Amortization of intangible assets                      2,744        3,126       3,848          2,591          2,522        3,177
                                                  ------------------------------------------------------------------------------
Total operating expenses                              35,779       59,868      58,163         45,384         41,809       52,667

Operating income (loss)                               (1,175)      16,933      (4,386)       (18,005)       (19,654)     (24,758)
Interest income (expense), net                          (563)       2,814       4,240          3,395          2,815        3,546
Other income, net                                      1,180            -           -              -              -            -
                                                  ------------------------------------------------------------------------------

Income (loss) before taxes and equity in
 earnings (loss) of affiliated companies and
 minority interest                                      (558)      19,747        (146)       (14,610)       (16,839)     (21,212)
Income taxes (benefit)                                (1,098)       6,311         518          2,404         (3,292)      (4,147)
                                                  ------------------------------------------------------------------------------

Income (loss) before equity in earnings (loss)
 of affiliated companies and minority interest           540       13,436        (664)       (17,014)       (13,547)     (17,065)
Equity in earnings (loss) of affiliated
 companies and loss on sale of affiliated
 companies                                             1,891        5,031     (16,314)             -              -            -
Minority interest                                          -            -           -              3             50           63

                                                  ------------------------------------------------------------------------------
Net income (loss)                                      2,431       18,467     (16,978)       (17,011)       (13,497)     (17,002)
                                                  ==============================================================================

Basic                                                   0.09         0.61       (0.53)         (0.54)         (0.44)       (0.55)
Diluted                                                 0.09         0.61       (0.53)         (0.54)         (0.44)       (0.55)
Weighted average number of shares used
  to compute earnings (loss) per share
Basic                                             26,394,425   30,242,151  31,794,675     31,462,482     30,813,681   30,813,681
Diluted                                           26,415,048   30,351,462  31,794,675     31,462,482     30,813,681   30,813,681
                                                  ==============================================================================

OTHER OPERATING DATA:
Net sales per employee                                   130          254         183            124            123          155
Capital expenditures                                   1,213        6,311       3,393          4,903         11,889       14,977
Depreciation of property, plant and equipment          4,985        4,465       4,495          4,135          3,947        4,972
Net cash provided by (used in) operating
 activities                                            4,878       12,066      14,942         (4,224)         5,296        6,671
                                                  ==============================================================================
</TABLE>

                                       1
<PAGE>

(1)  Translated solely for convenience of the reader at the noon buying rate in
     effect on December 31, 2003 of(euro)1.00 = US$ 1.2597.

EXCHANGE RATE INFORMATION

    A significant portion of our net sales and expenses is denominated in
currencies other than euro. We do not currently anticipate paying any dividends
to shareholders. Any dividends that we may declare, however, would be in the
currency determined by our directors at the time they are declared, and exchange
rate fluctuations would affect the US dollar equivalent of any cash dividend
received by holders of shares of New York registry.

    The average exchange rate information set forth below is computed using the
noon buying rate for the euro on the last business day of each month during the
period indicated.

AVERAGE EXCHANGE RATES OF US DOLLARS PER EURO

<TABLE>
<CAPTION>
                                                               AVERAGE
                                                               --------
<S>                                                            <C>
Financial year ended December 31, 1999....................     $ 1.0667
Financial year ended December 31, 2000....................     $ 0.9234
Financial year ended December 31, 2001....................     $ 0.8909
Financial year ended December 31, 2002....................     $ 0.9495
Financial year ended December 31, 2003....................     $ 1.1404
</TABLE>

RECENT EXCHANGE RATES OF US DOLLARS PER EURO

    The table below shows the high and low exchange rates of US dollars per euro
for each month from November 2003 to April 2004:

<TABLE>
<CAPTION>
                                         HIGH           LOW
                                         ----           ---
<S>                                     <C>           <C>
November 2003......................     $1.1918       $1.1417
December 2003......................     $1.2597       $1.1956
January 2004.......................     $1.2853       $1.2395
February 2004......................     $1.2848       $1.2426
March 2004.........................     $1.2431       $1.2088
April 2004.........................     $1.2358       $1.1802
</TABLE>

    The noon buying rate for the euro on April 30, 2004 was (euro) 1.00 = $
1.1975.

                                       2
<PAGE>

RISK FACTORS

The following important factors, among others, could cause our actual results to
differ materially from those contained in forward-looking statements made in
this report or presented elsewhere by management from time to time.

OUR NET SALES AND RESULTS OF OPERATIONS DEPEND IN SIGNIFICANT PART ON
ANTICIPATED DEMAND FOR SEMICONDUCTORS, WHICH IS HIGHLY CYCLICAL, AND THE
SEMICONDUCTOR MARKET HAS RECENTLY EXPERIENCED A SIGNIFICANT AND SUSTAINED
DOWNTURN

Capital expenditures of our customers for semiconductor manufacturing equipment
depend on the current and anticipated market demand for semiconductors and
products using semiconductors. The semiconductor industry is highly cyclical and
has suffered significant economic downturns at various times. These downturns
have involved periods of production overcapacity, oversupply, reduced prices and
lower net sales, and have regularly been associated with dramatically reduced
levels in capital expenditures for semiconductor facilities and equipment. Due
to the lead times associated with the production of semiconductor equipment, a
rise or fall in the level of sales of semiconductor equipment typically lags any
downturn or recovery in the semiconductor market by approximately nine to twelve
months. For example, according to trade association data, worldwide sales of all
semiconductor products grew by more than 40% in 1995, while worldwide
semiconductor sales in 2002 decreased by more than 30% as compared to 2000.
These conditions have had and are expected to continue to have a direct result
on our net sales, results of operations and backlog. Downturns in the industry
can be severe and protracted and could again impact our net sales, results of
operations and backlog.

OUR QUARTERLY NET SALES AND OPERATING RESULTS FLUCTUATE SIGNIFICANTLY

Our quarterly net sales and operating results have varied in the past and may
continue to fluctuate in the future. We believe that period-to-period
comparisons of our operating results are not necessarily indicative of future
operating results. Factors that have caused our operating results to fluctuate
in the past and which are likely to affect us in the future include the
following:

-    the volatility of the semiconductor industry;

-    the length of sales cycles and lead-times associated with our product
     offerings;

-    the timing, size and nature of our transactions;

-    the market acceptance of new products or product enhancements by us or our
     competitors;

-    the timing of new personnel hires and the rate at which new personnel
     become productive;

-    the changes in pricing policies by our competitors;

-    the changes in our operating expenses;

-    our ability to adjust production capacity on a timely basis to meet
     customer demand; and

-    the fluctuations in foreign currency exchange rates.

Because of these factors, investors should not rely on quarter-to-quarter
comparisons of our results of operations as an indication of future performance.
In future periods, our results of operations could differ from estimates of
public market analysts and investors. Such discrepancy could cause the market
prince of our securities to fall.

OUR BACKLOG AT ANY PARTICULAR DATE MAY NOT BE INDICATIVE OF OUR FUTURE OPERATING
RESULTS

Our backlog amounted to (euro) 39.8 million at December 31, 2003. In market
downturns, semiconductor manufacturers historically have cancelled or deferred
additional equipment purchases. For example, backlog decreased significantly in
2001 due to a steep decline in a semiconductor production and capital
expenditure cutbacks initiated by our customers during this period. The orders
in our backlog are subject to cancellation by the customer at any time upon
payment of a negotiated charge. Because of the possibility of changes in
delivery schedules, cancellations of orders and potential delays in product
shipments, our backlog at any particular date may not be representative of
actual sales for any succeeding period.

Our current and future dependence on a small number of customers increases the
revenue impact of each customer's delay or deferral activity. Our expense level
in future periods will be based, in large part, on our expectations regarding
future revenue sources and, as a result, our operating results for any given
period in which material orders fail to occur, are delayed or deferred could
vary significantly.

BECAUSE OF THE LENGTHY AND UNPREDICTABLE SALES CYCLE ASSOCIATED WITH OUR
TRANSACTIONS, WE MAY NOT SUCCEED IN CLOSING TRANSACTIONS ON A TIMELY BASIS, IF
AT ALL, WHICH WOULD ADVERSELY AFFECT OUR NET SALES AND OPERATING RESULTS

Transactions for our products often involve large expenditures as the average
selling price for a substantial portion of the equipment we offer exceeds (euro)
300,000. The sales cycles for these transactions are often lengthy and
unpredictable. Factors affecting the sales cycle include:

-    customers' capital spending plans and budgetary constraints;

-    the timing of customers' budget cycles; and

-    customers' internal approval processes.

These lengthy sales cycles may cause our net sales and results of operations to
vary from period to period and it may be difficult to predict the timing and
amount of any variations.

                                       3
<PAGE>

We may not succeed in closing such large transactions on a timely basis or at
all, which could cause significant variability in our net sales and results of
operations for any particular period.

A LIMITED NUMBER OF CUSTOMERS HAVE ACCOUNTED FOR A SIGNIFICANT PERCENTAGE OF OUR
NET SALES, AND OUR FUTURE NET SALES COULD DECLINE IF WE CANNOT KEEP OR REPLACE
THESE CUSTOMER RELATIONSHIPS

Historically, a limited number of our customers have accounted for a significant
percentage of our net sales. In 2003, our three largest customers accounted for
approximately 46% of our net sales, with the largest customer accounting for
approximately 31% of our net sales. We anticipate that our results of operations
in any given period will continue to depend to a significant extent upon
revenues from a small number of customers. In addition, we anticipate that the
identity of such customers will continue to vary over time, so that the
achievement of our long-term goals will require us to maintain relationships
with our existing clients and to obtain additional customers on an ongoing
basis. Our failure to enter into and realize revenue from a sufficient number of
contracts during a particular period could have a significant adverse effect on
our net sales.

WE MAY FAIL TO COMPETE EFFECTIVELY IN OUR MARKET

We face substantial competition from established companies, based primarily in
Japan, various other Pacific Rim countries and the United States, many of which
have greater financial, engineering, manufacturing and marketing resources than
us. We believe that once a semiconductor manufacturer has decided to buy
semiconductor assembly equipment from a particular vendor, the manufacturer
often continues to use that vendor's equipment in the future. Accordingly, it is
often difficult to achieve significant sales to a particular customer once
another vendor's products have been installed. Furthermore, some companies have
historically developed, manufactured and installed back-end assembly equipment
internally, and it may be difficult for us to sell our products to these
companies.

Most of our principal competitors on a worldwide basis are Japanese, which
historically have dominated the Japanese market because Japanese semiconductor
manufacturers typically purchase equipment from domestic suppliers. To date, our
sales to Japanese customers have been limited. We believe that the limited
growth of the Japanese semiconductor industry in recent years has caused our
Japanese competitors to intensify their efforts to export their products to
other areas of the world, particularly Asia. As a result, competition in these
markets has become increasingly intense.

We believe that a decrease in the value of the Japanese yen or the US dollar and
dollar-linked currencies in relation to the euro could lead to intensified
price-based competition in our markets resulting in lower prices and margins and
could have a negative impact on our business and results of operations.

We believe that our ability to compete successfully in our market depends on a
number of factors both within and outside our control, including:

-    price, product quality and system performance;

-    ease of use and reliability of our products;

-    manufacturing lead times, including the lead times of our subcontractors;

-    cost of ownership;

-    success in developing or otherwise introducing new products; and

-    market and economic conditions.

We cannot assure you that we will be able to compete successfully in the future.

WE MUST INTRODUCE NEW PRODUCTS IN A TIMELY FASHION AND ARE DEPENDENT UPON THE
MARKET ACCEPTANCE OF THESE PRODUCTS

Our industry is subject to rapid technological change and new product
introductions and enhancements. The success of our business strategy and results
of operations are largely based upon accurate anticipation of customer and
market requirements. Our ability to implement our overall strategy and remain
competitive will depend in part upon our ability to develop new and enhanced
products and to introduce them at competitive price levels. We must also
accurately forecast commercial and technical trends in the semiconductor
industry so that our products provide the functions required by our customers
and are configured to be used in our customers' facilities. We may not be able
to respond effectively to technological changes or to specific product
announcements by competitors. As a result, the introduction of new products
embodying new technologies or the emergence of new industry standards could
render our existing products uncompetitive from a pricing standpoint, obsolete
or unmarketable.

Although we expect to continue to introduce new products in each of our product
lines, we cannot assure you that we will be successful in developing new
products in a timely manner or that any new products will achieve market
acceptance.

WE ARE LARGELY DEPENDENT UPON OUR INTERNATIONAL OPERATIONS

We have facilities and personnel in the Netherlands, Malaysia, Korea, Hong Kong,
Singapore, Japan, China and the United States and our products are marketed,
sold and serviced worldwide. Our operations are subject to risks inherent in
international business activities, including, in particular:

-    general economic conditions in each country;

                                       4
<PAGE>

-    the overlap of different tax structures and management of an organization
     spread over various countries;

-    currency fluctuations, which could result in increased operating expenses
     and reduced revenues;

-    greater difficulty in accounts receivable collection and longer collection
     periods;

-    unexpected changes in regulatory requirements, compliance with a variety of
     foreign laws and regulations; and

-    import and export licensing requirements, trade restrictions and changes in
     tariff and freight rates.

In addition, each region in the global semiconductor equipment market exhibits
unique characteristics that can cause capital equipment investment patterns to
vary significantly from period to period.

WE ARE DEPENDENT ON NET SALES FROM CUSTOMERS IN VARIOUS PACIFIC RIM COUNTRIES
WHO HAVE EXPERIENCED ECONOMIC DIFFICULTIES

Our net sales are dependent upon customers in various Pacific Rim countries.
Many Pacific Rim countries have experienced banking and currency difficulties
that have led to an economic slowdown in those countries. Specifically, the
decline in value of the Korean and Southeast Asian currencies, together with
difficulties in obtaining credit, has resulted in a decline in the purchasing
power of our Korean and Southeast Asian customers and has resulted in the
cancellation or delay of orders for our products from Korean and Southeast Asian
customers. In addition, if Japan's economy weakens further, investments by
Japanese customers may be negatively affected and it is possible that economic
recovery in other Pacific Rim countries could be delayed.

OUR RESULTS OF OPERATIONS HAVE IN THE PAST AND COULD IN THE FUTURE BE AFFECTED
BY CURRENCY EXCHANGE RATE FLUCTUATIONS

The percentage of our consolidated net sales that is denominated in euro is
approximately 72% whereas net sales represented by US dollars or dollar-linked
currencies is approximately 28%. Approximately 81% of our costs and expenses are
denominated in euro. As a result, our results of operations could be affected by
fluctuations in the value of the euro against the dollar. In recent periods, the
value of the dollar has declined significantly in comparison with the euro. We
seek to manage our exposure to such fluctuations by hedging firmly committed
sales contracts denominated in US dollars. While management will continue to
monitor our exposure to currency fluctuations and, as appropriate, use financial
hedging instruments to minimize the effect of these fluctuations, we cannot
assure you that exchange rate fluctuations will not have an adverse effect on
our results of operations or financial condition.

Although we do not anticipate paying any dividends or other distributions to
shareholders for the foreseeable future, any such distributions would be made in
euro. Accordingly, the value of distributions to shareholders electing to
convert euro into another currency not linked to the euro would depend in part
on the fluctuation of the value of the euro against such other currency.

IF WE FAIL TO CONTINUE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL, OUR BUSINESS
MAY BE HARMED

Our future operating results depend in significant part upon the continued
contribution of our senior executive officers and key employees, including a
number of specialists with advanced university qualifications in engineering,
electronics and computing. In addition, our business and future operating
results depend in part upon our ability to attract and retain other qualified
management, technical, sales and support personnel for our operations. We
believe that our ability to increase the manufacturing capacity of our
subsidiaries has from time to time been constrained by the limited number of
such skilled personnel. Competition for such personnel is intense, and we may
not be able to continue to attract and retain such personnel. The loss of any
key executive or employee or the inability to attract and retain skilled
executives and employees as needed could adversely affect our business,
financial condition and results of operations.

WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, WHICH COULD MAKE
US LESS COMPETITIVE AND CAUSE US TO LOSE MARKET SHARE

Although we seek to protect our intellectual property rights through patents,
trademarks, copyrights, trade secrets and other measures, we cannot assure you
that we will be able to protect our technology adequately, that our competitors
will not be able to develop similar technology independently, that any of our
pending patent applications will be issued, or that intellectual property laws
will protect our intellectual property rights. In addition, we operate
internationally, and intellectual property protection varies among the
jurisdictions in which we conduct business. Litigation may be necessary in order
to enforce our patents, copyrights or other intellectual property rights, to
protect our trade secrets, to determine the validity and scope of the
proprietary rights of others or to defend against claims of infringement.
Litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on our business and operating results.
Third parties may seek to challenge, invalidate or circumvent any patent issued
to us, and the rights granted under any patent issued to us may not provide
competitive advantages to us or third parties may assert that our products
infringe patent, copyright or trade secrets of such parties. Furthermore, third
parties may independently develop similar products or duplicate our products.

WE ARE SUBJECT TO ENVIRONMENTAL RULES AND REGULATIONS IN A VARIETY OF
JURISDICTIONS

We are subject to a variety of governmental regulations relating to the use,
storage, discharge and disposal of chemical by-products of, and water used in,
our manufacturing processes. Environmental claims or the failure to comply with
any present or future regulations could result in the assessment of damages or
imposition of fines against us, suspension of production or a cessation of
operations. New regulations could require us to acquire costly equipment or to
incur other significant expenses. Any failure by us to control the use or
adequately restrict the discharge of hazardous substances could subject us to
future liabilities.

                                       5
<PAGE>

REPORTING IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS MAY
DIFFER FROM REPORTING IN ACCORDANCE WITH US GAAP

Beginning in 2005, the European Commission will require companies that are
quoted on a European stock market, such as Euronext Amsterdam N.V., or Euronext
Amsterdam, to publish their financial statements in accordance with
International Financial Reporting Standards, or IFRS. While we intend to
continue publishing financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, or US GAAP, we
also will publish our consolidated financial statements in accordance with IFRS
from January 1, 2005 onwards.

Our financial condition and results of operations reported in accordance with
IFRS may differ from our financial condition and results of operations reported
in accordance with US GAAP, which could adversely affect the market price of our
ordinary shares.

WE MAY ACQUIRE OR MAKE INVESTMENTS IN COMPANIES OR TECHNOLOGIES ANY OF WHICH
COULD DISRUPT OUR ONGOING BUSINESS, DISTRACT OUR MANAGEMENT AND EMPLOYEES,
INCREASE OUR EXPENSES AND ADVERSELY AFFECT OUR RESULTS OF OPERATIONS

As part of our future growth strategy, we may from time-to-time acquire or make
investments in companies and technologies. We could face difficulties in
assimilating personnel and operations from the acquired businesses and in
retaining and motivating key personnel from these businesses. In addition, these
acquisitions may disrupt our ongoing operations, divert management from
day-to-day business, increase our expenses and adversely impact our results of
operations. Any future acquisitions could involve other risks, including the
assumption of additional liabilities, dilutive issuances of equity securities
and incurrence of debt. In addition, these types of transactions often result in
charges to earnings for items, such as amortization of intangible assets or
in-process research and development expenses.

WE ARE SUBJECT TO PROVISIONS OF NETHERLANDS LAW, WHICH MAY RESTRICT THE ABILITY
OF OUR SHAREHOLDERS TO MAKE SOME DECISIONS

We are subject to provisions of Netherlands law applicable to large corporations
("structuurregime") that, together with some provisions of our Articles of
Association, have the effect of concentrating control over significant corporate
decisions and transactions in the hands of our Supervisory Board. Under such
regime, the Supervisory Board of a corporation has the power to appoint its own
members, to appoint and dismiss members of the Board of Management, and to adopt
the annual financial statements of the corporation. This regime may have the
effect of delaying or preventing a change in control that shareholders may find
favorable.

In addition, in April 2000 we established the Stichting Continuiteit BE
Semiconductor Industries, a foundation whose board consists of five members,
four of whom are independent of BE Semiconductor Industries N.V. We have granted
the foundation a call option pursuant to which it may purchase up to 55,000,000
of our preference shares. If the foundation were to exercise the call option, it
may result in delaying or preventing a change in control that shareholders may
find favorable.

WE MAY IN THE FUTURE BE CONSIDERED A PASSIVE FOREIGN INVESTMENT COMPANY

The US Internal Revenue Code of 1986, as amended, contains special rules
relating to passive foreign investment companies, or PFICs. A US holder who owns
stock in a PFIC generally is subject to adverse tax consequences under these
rules. These rules do not apply to non-US holders. A company is treated as a
PFIC if at least 75% of the company's gross income for a taxable year consists
of "passive income," defined generally as income from passive investments, as
opposed to operating income. A company is also treated as a PFIC if the average
percentage of the value of its assets, including cash balances, that produce or
are held for the production of passive income is at least 50%. The application
of the gross income test in our particular circumstances is uncertain, as the
calculation is complex when a company's gross margin is negative and our
calculation is based on a US Internal Revenue Service private letter ruling
which, although issued in similar circumstances, was issued to another taxpayer
and would not necessarily be applied by the IRS to us in any audit or review.
This could result in our classification as a PFIC in the future, even in a year
in which we have substantial gross revenues from product sales. In addition, the
proportion of our cash balances compared with our total assets may in the future
result in our being a PFIC. There can be no assurance that we will in future
years have sufficient revenues from product sales or sufficient non-passive
assets to avoid becoming a PFIC.

If we were classified as a PFIC, unless a US holder made a timely specific
election, a special tax regime would apply to any "excess distribution," which
would be the US holder's share of distributions in any year that are greater
than 125% of the average annual distributions received by the US holder in the
three preceding years or the US holder's holding period, if shorter, and any
gain realized on the sale or other disposition of the ordinary shares of ADSs.
Under this regime, any excess distribution and realized gain would be treated as
ordinary income and would be subject to tax as if the excess distribution or
gain had been realized ratably over the US holder's holding period for the
ordinary shares or ADSs. A US holder will generally be required to pay taxes on
the amount allocated to a year at the highest marginal tax rate and pay interest
on the prior year's taxes. A US holder may be able to ameliorate the tax
consequences somewhat by making a mark-to market election or QEF election, that
is, an election to have us treated as a qualified electing fund for US federal
income tax purposes. You should consult your tax advisor of the consequences of
our classification as a PFIC.

                                       6
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ITEM 4:  INFORMATION ON THE COMPANY

INTRODUCTION

BE Semiconductor Industries N.V. is a leading manufacturer of semiconductor
packaging, plating and die handling equipment for both leadframe and array
connect applications. We design and manufacture technologically advanced,
high-performance equipment and integrated systems for the semiconductor
industry's assembly process operations. Our equipment is used principally to
produce semiconductor packages, which provide the electronic interface and
physical connection between the chip and other electronic components and protect
the chip from the external environment. Our innovative systems offer customers
high productivity and improved yields of defect-free devices at a low total cost
of ownership. We operate primarily through four wholly owned divisions. We
conduct our molding systems and trim and form integration systems business
through our Fico subsidiary. We conduct our plating systems and singulation
systems business through our Meco subsidiary. Our Besi Die Handling subsidiary,
which we created by combining our former RD Automation and Laurier subsidiaries,
operates our flip chip die attach systems and die sorting systems business.
Recently, we began marketing and selling our Advanced Back-end Cluster
equipment, or ABC, which are integrated solutions of assembly process equipment,
incorporating products from our subsidiaries as well as from other
manufacturers.

    Our customers are leading US, European and Asian semiconductor manufacturers
and packaging subcontractors and include Agere, Amkor, ASE, AVX, Conexant, IBM,
Infineon, Intel, Lucent, Micron, Motorola, NSEB, ON Semiconductor, Philips and
STMicroelectronics. Our equipment performs critical functions in our customers'
semiconductor assembly operations and in many cases represents a significant
percentage of their installed base of packaging and plating equipment. Our
business has benefited from close, long-term relationships with our customers,
many of whom have been purchasing our equipment and services for over 30 years.
We believe that these customer relationships have contributed to our attaining a
leading position in each of our principal product lines.

    We were incorporated under the laws of the Netherlands in May 1995. Our
principal executive offices are located at Marconilaan 4, 5151 DR Drunen, the
Netherlands, and our telephone number at that location from the United States is
(011) 31- 416-384345. The address for our agent for service in the United States
is BE Semiconductor Industries USA, Inc., 10 Tinker Avenue, Londonderry, NH
03053.

INDUSTRY BACKGROUND

    INTRODUCTION

    Semiconductors are the basic building blocks used to create an increasing
variety of electronic products and systems. Most consumers picture
semiconductors as small black boxes. The small black boxes are actually the
packaging that surrounds the silicon chip and both protects the chip from the
external environment and provides the interface between the chip and other
electronic components.

    Historically, semiconductors were mass-produced as standard parts. Their
electronic functionality was determined by configuring many standard parts on a
printed circuit board that was custom designed for each application. Continuous
improvements in semiconductor process and design technologies have led to
smaller, more complex and more reliable devices at a lower cost per function.
Over time, system users and designers have continued to demand more
functionality, higher levels of performance, greater reliability and shorter
design cycle times, all at a lower cost. The semiconductor industry has
responded by combining the functions of multiple chips onto one chip. In
addition, by increasing the number of chips per wafer and wafer diameter,
manufacturers have reduced costs and increased device yields.

    The simple approach of reducing chip sizes and increasing functionality in
order to meet customer production requirements has pushed the limits of
conventional semiconductor packages. Semiconductor manufacturers have been
required to develop new packaging technologies in response to increased demand
for:

     -    Complexity. Manufacturers now combine so many functions on each chip
          that it becomes difficult to accommodate the large number of necessary
          electrical interconnections. This problem will only increase as
          designers continue to develop solutions with an increased number of
          functions per chip.

     -    Miniaturization. New applications and ever smaller electrical
          equipment such as wireless devices, including cellular telephones and
          personal digital assistants, demand increased density and
          functionality per chip, which can only be achieved through smaller
          chip designs and packages.

     -    Customization. At the same time as individual chips become more
          powerful and the total number of chips in end products is reduced,
          customers require specific customized packages for their individual
          needs. Manufacturers therefore demand packaging equipment with the
          flexibility to handle an increased number of specific applications.

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    The rapid development of advanced semiconductor applications requires
semiconductor manufacturers to continually improve their core technology and
manufacturing capabilities to remain competitive. Due to increased requirements
for complexity, miniaturization and customization, semiconductor manufacturers
demand highly sophisticated, cost-effective equipment from semiconductor
assembly packaging and plating equipment suppliers.

    SEMICONDUCTOR MANUFACTURING AND ASSEMBLY

    The semiconductor manufacturing process involves two distinct phases, wafer
processing, commonly referred to as the front-end, and assembly/test operations,
including die attach wire bonding, packaging, plating and testing functions,
which are commonly referred to as the back-end. Wafer processing involves
thousands of complex steps applied to a silicon wafer to form millions of
circuits on the wafer comprising a large number of chips. As the cost of
equipment and consequently production cost for the front-end is very high, it is
critical for manufacturers to protect their investment during the back-end
process by minimizing losses from defective processing, increasing throughput
and shortening manufacturing lead times for semiconductor products.

    The semiconductor assembly process first involves the separation from the
wafer of individual chips or "die" and the attachment of each die to a plated
metal leadframe or a multilayer substrate. The connection of the chip is then
made either by bonding extremely fine gold or aluminum wire to the leadframe
("wire bonding") or by creating direct connections to the substrate via a
so-called flip chip ("die attach" or "die bonding"). Next, the chips are molded
by encapsulation in an epoxy plastic. In leadframe applications, the leads are
then deflashed and tin-plated, the chips are separated into individual devices,
and the leads are trimmed and formed. In array connect applications, connections
between the substrate and the chip are attached by ball placement and reflow
processes and the devices are cut, or singulated, into individual units.
Functional testing is carried out in various testing operations. Advanced
integration capabilities, however, already permit the integration of test
functions with leadframe trim and form operations.

    A more detailed description of the key stages in the semiconductor assembly
process is set forth below:

         Die Separation -- a dicing saw cuts the wafer into individual chips or
         "die";

         Stamping, Etching, Plating and Materials Processing -- a metal
         leadframe is stamped or etched and plated with silver, gold or nickel
         palladium to act as a physical carrier and electrical connection for
         the individual die; in processes used to create array connect devices,
         a rigid or flexible multilayer substrate acts as a carrier for the
         individual die;

         Silver/Gold Spot Plating -- the lead tips and die pads are plated with
         silver or gold to facilitate bonding of the die to the leadframe or
         substrate;

         Bonding -- chips are bonded to the leadframe and specific locations on
         the chip and corresponding leads on the frame are connected with very
         fine gold or aluminum wire;

         Flip Chip Die Attach -- chips are attached directly to the substrate
         through contact with small gold or precious metal alloy balls effected
         by a reflow process;

         Molding -- the chips are encapsulated, generally in epoxy plastic, to
         protect them from external contamination;

         Deflashing -- the epoxy residue left over from the molding process is
         removed;

         Tin-lead plating -- the leads of the molded chips are plated with
         tin-lead to facilitate soldering to other components;

         Trim and Form -- the leads of the molded chips are cut and formed for
         later placement on a printed circuit board after packaging and final
         test;

         Ball Placement -- balls are placed onto substrates to form the
         connection between the chip's substrate and external electronic
         devices;

         Reflow -- tin balls are heated and cooled to connect them to the
         substrate;

         Singulation -- packaged array connect devices are sawed into
         individually packaged units using a high-speed cutting wheel; and

         Test Handling -- the packaged semiconductor is delivered to a tester by
         handling equipment.

                                       8
<PAGE>

    SEMICONDUCTOR PACKAGING DEVELOPMENTS

    Semiconductor manufacturers face continuing challenges to meet the demands
of their end-user customers in response to new market developments. For example,
in recent years, the use of semiconductors in applications such as wireless
telephony, personal digital assistants and consumer electronics has proliferated
rapidly. In addition to rapidly increasing volumes, the use of semiconductors in
devices such as cellular telephones imposes continuing demands upon
semiconductor manufacturers to reduce the size of the device and increase its
functionality, while still responding to intense time-to-market pressures.

    To meet the challenges faced by semiconductor manufacturers, the
semiconductor assembly industry has developed new chip packaging technologies.
To address the requirement for increasingly dense circuits, array connect
packaging has been developed, of which chip scale ball grid array packaging has
emerged as the leading solution. Rather than relying on leadframes to mount and
connect semiconductors, a multilayer substrate material is used. Underneath the
substrate, balls of solder are placed in an array pattern to establish direct
contact with the circuit board allowing much greater densities than can be
attained using leadframe technology. Chip scale ball grid array packaging is
ideal for producing small, complex wireless devices.

    A more recent innovation is flip chip technology. As chips have decreased in
size, the pitch or distance between the gold wires that connect the chip to the
substrate or leadframe has continued to shrink. Flip chip technology eliminates
the need for wire bonding by placing the contact points of the chip in direct
contact with the packaging substrate. This technology requires stringent control
of the placement of the chip on the substrate.

    We believe that both these new technologies are attractive solutions for a
number of the challenges faced by semiconductor manufacturers, and anticipate
that they will continue to be adopted and will become a more significant part of
the overall market in the future. This adoption will in turn require the
introduction of new assembly processes, including new molding processes to
encapsulate array connect chips and singulation systems in place of trim and
form systems to cut and form array connect chips for installation on printed
circuit boards.

    CUSTOMER REQUIREMENTS

    The dynamic nature of the semiconductor market causes manufacturers to seek
a one-stop, integrated solution for their production requirements, both to
maximize their return on investment in fabrication facilities and to eliminate
potential bottlenecks in the semiconductor assembly process. As a result,
manufacturers require assembly solutions that:

     -    are continuously improved to support new technologies for both
          leadframe and array connect packages;

     -    include equipment capable of handling the wide range and proliferating
          number of chip packages; and

     -    offer increased yields of defect-free devices while reducing
          manufacturing lead times.

To develop these solutions, manufacturers and suppliers must collaborate closely
to identify product and process specifications and develop new technologies.

STRATEGY

    Our objective is to become the world's leading supplier of advanced back-end
assembly equipment incorporating both leadframe and array connect process
technologies. The principal elements of our strategy to achieve this goal are
set forth below.

    Leverage Our Technology Leadership to Exploit New Packaging Technologies.
Our customers' success depends on our timely development of manufacturing
processes and equipment to address changing requirements for new semiconductor
packaging. In the array connect market, we have introduced advanced molding
systems and singulation systems designed to address our customers' requirements
for miniaturization and higher chip density at lower overall cost. We have been
involved in the development and production of chip scale ball grid array
technology since the early 1990s and are one of the leading suppliers of
equipment used in chip scale ball grid array molding.

    Actively Pursue Back-end System Integration. We believe that customer
demands for higher throughput, quality and flexibility in the assembly process
offer significant opportunities for those equipment manufacturers able to
automate and integrate that process. We intend to expand the range of automated
systems for various leadframe and array connect assembly processes and
ultimately to offer a complete, integrated solution for our customers. Our
current generation of systems has introduced the integration of molding with
wire bonding and post cure, as well as the integration of marking, vision
inspection and testing with trim and form and singulation processes. We intend
to continue this process by introducing other products to support an automated
and integrated assembly process, including advanced test handling systems and
tracking systems, as part of our goal of offering customers a one-stop,
integrated solution for the entire assembly process.

    Focus on Strategic, Long-Term Customer Relationships. Our close
relationships with our customers, many of which exceed

                                       9
<PAGE>

thirty years, provide us with valuable knowledge about the semiconductor
packaging and plating requirements as well as opportunities to develop back-end
systems in conjunction with our customers. We believe that these relationships,
combined with our position as a leading supplier of integrated assembly systems,
provide an opportunity to broaden the range of products sold to these customers
and to enhance our reputation as a supplier of a broad and flexible range of
assembly systems.

    Expand Global Sales and Service Operations. We maintain regional sales and
service operations in Europe, the Asia Pacific region and the United States and
have customers in each region. As part of our strategy, we intend to expand our
customer base in critical global markets, particularly in China and Japan. Given
the globalization of the semiconductor industry, we believe that a significant
presence in sales and after-market service in each geographic region is critical
to sustain close relationships with customers and generate new product sales.

    Selectively Pursue Acquisitions. We believe that in order to implement our
goals of providing customers with highly automated, integrated solutions with
optimal packaging flexibility, it is critically important to identify and
incorporate new technologies and processes on a timely basis. Towards that end,
we intend to actively identify and evaluate acquisition candidates that could
assist us in attaining our overall goals of achieving integrated, automated
assembly, maintaining product leadership, addressing evolving new packaging
technologies and expanding our geographic scope. In September 2001, we acquired
our RDA subsidiary in order to expand our array connect product portfolio and in
January 2003 we acquired our Laurier subsidiary allowing us to incorporate
intelligent die sorting capabilities as part of our integration strategy. We
expect to implement our acquisition strategy by leveraging our reputation in the
industry, extensive product range and significant cash resources. In addition,
we will also, where appropriate, evaluate implementing our goals through joint
ventures, alliances and other strategic relationships.

PRODUCTS AND SERVICES

    We develop and produce semiconductor die handling, packaging and plating
equipment for both leadframe and array connect applications.

    Our die handling equipment consists of :

    -    die sorting systems which are used to inspect, select and sort dies,
         flip chips, wafer level scale packages and opto-electronic devices for
         further processing in assembly operations; and

    -    high precision systems which place the contact points of the chip in
         direct contact with the packaged substrate.

    Our packaging equipment consists of:

    -    molding systems that encapsulate semiconductor devices in epoxy resin;

    -    d trim and form systems used to cut and then form metallic leads of
         encapsulated semiconductor devices;

    -    singulation systems used to cut packaged array connect substrates; and

    -    integration lines that connect and integrate the packaging process from
         molding until final testing.

    Our plating equipment consists of a comprehensive line of fully automated
tin-lead plating systems.

    In the future, we plan to offer customers a fully automated and integrated
array connect assembly solution that will integrate test handling and flip chip
bonding capabilities with our existing line of packaging and plating equipment.

DIE HANDLING SYSTEMS

    Die Sorting Systems. Die sorting systems are used to inspect, select and
sort bare die, flip chips, wafer level chip scale packages and opto-electronic
devices as small as 0.2 millimeters square from a wafer for further processing
in back-end semiconductor assembly operations. Pick-and-place systems are also
capable of handling 300 millimeter diameter wafers, the next major step in the
evolution of mass produced semiconductor devices. Our current line of die
sorting systems range in price from (euro) 150,000 to approximately (euro)
300,000.

    Flip Chip Die Attach Systems. Flip chip technology eliminates the need for
conventional wire bonding by placing the contact points of the chip in direct
contact with the packaged substrate. The use of flip chip bonding technology is
critical for the needs of chip manufacturers to further shrink device sizes
while increasing functionality for applications such as wireless telephony,
personal

                                       10
<PAGE>

digital assistants, consumer electronics and internet infrastructure. In the
opto-electronics field, precision flip chip die attach systems are critical in
the assembly of filters such as waveguides which optimize the flow of data in
fiber optic networks. Our die attach equipment offers a variety of solutions for
process development and volume production environments, including models that
can accommodate bonding accuracy up to 1 micrometer. In addition, we offer
semi-automatic systems capable of bonding from 10 g to 125 kg of force, with an
average placement accuracies of approximately 2 micrometers. Our current line of
flip chip die attach systems range in price from (euro) 100,000 to more than
(euro) 500,000.

PACKAGING EQUIPMENT

    Molding Systems. Once chips have been bonded, using either wire bond
technology or flip chip die attach technology, they must be encapsulated in a
stable, electronically neutral base. We produce a range of molding systems for
leadframe and array connect markets that encapsulate semiconductor devices in
epoxy resins.

    Based on our observation of trends in our industry, we believe that package
proliferation both for leadframe and new array connect devices will increase
from 400 package types five years ago to over 1,000 package types in the coming
years. We believe that such proliferation will further increase the necessity of
automated molding processes, because automation will enable our customers to
increase their yield of defect-free devices through better process control and
because the rapid transition to smaller, thinner surface-mount devices and the
advent of array connect packages requires more precise handling and processing
techniques. As a result, manufacturers have demanded assembly equipment with
features that are sophisticated enough to support the introduction of these new
packages and sufficiently flexible to permit both the high-volume production of
devices and smaller production runs of specialized chips.

    To meet these requirements, we have developed and customized molding systems
to meet customers' performance and flexibility requirements. Our molding systems
use a multiplunger technology, which increases efficiency by means of multiple
transfer plungers per mold. In addition, our systems use molds smaller than
those currently available from other manufacturers, including those in Japan. We
believe that these features improve process control, increase throughput and
provide greater flexibility by a more rapid exchange of mold sets. All of the
systems are modular, allowing integration with other process equipment, such as
wire bonders, post cure ovens and trim and form equipment.

    Our molding systems feature an electromechanical drive and modular design
range for one strip to sixteen strips capability. For the year ended December
31, 2003, sales of our chip scale ball grid array molding systems accounted for
approximately 8% of our total molding systems sales.

    To enhance further the flexibility, speed and reliability of our automated
systems, we have developed proprietary control software that permits operators
to vary the parameters for encapsulation of chips and facilitates the transition
from one product group to another. The software automatically analyzes the
characteristics of any chip entered by the operator, and provides the operator
with the instructions required for automated encapsulation of the prescribed
product set. We also have developed proprietary software that provides customers
with trend data on mold temperatures, plunger pressure and position and other
key performance reliability indicators to allow precise monitoring of the
production process.

    Our current line of molding systems range in price from (euro) 250,000 for a
one strip machine designed to facilitate the development of new packages and
manufacturing of low volume products to approximately (euro) 1,000,000 for a
fully configured, high capacity, automated electromechanical system.

    As of December 31, 2003, we had sold approximately 900 molding systems and
had supplied over 50% of the installed base of molding systems at several
manufacturers, including AVX, Cypress Semiconductor, Delphi Automotive Systems,
IBM, Infineon Technologies and Micronas.

     Trim and Form Integration Systems. Trim and form integration systems are
used to cut and then form metallic leads of encapsulated semiconductor devices
in preparation for placement on a printed circuit board or in other
applications. Our trim and form integration systems are capable of integrating
laser marking, vision inspection and functional testing. Trim and form
integration, including testing, is the final step in the manufacture of a
semiconductor using conventional leadframe technology. The procedure requires a
high degree of precision, particularly with the increasing adoption of smaller
devices with thinner and more numerous leads that can easily be misformed or
broken during the trim and form process.

    To meet customer requirements, we offer high quality trim and form systems
with a wide range of options. Customers have the ability to customize specific
production requirements by selecting a manual, semi-automatic or automated
system with either a hydraulic or electromechanical drive system. The customer
selects a specific configuration and we then customize the equipment to meet
such requirements using our proprietary tool designs and proprietary
loading/transport system. Our trim and form systems are modular in design in
order to meet customer-specific volume and product requirements.

                                       11
<PAGE>

    To enhance further the flexibility, speed and reliability of our automated
systems, we have developed proprietary modular control software that permits
operators to vary the parameters and easily make the transition from one product
group to another. The software automatically analyzes the characteristics of any
chip entered by the operator, and provides the operator with the instructions
required for automated handling of the prescribed product set. We have also
developed proprietary software that provides customers with trend data and other
key performance reliability indicators to allow precise monitoring of the
production process.

    Systems also can be configured to integrate capabilities such as product
marking, vision inspection and related testing functions and to operate on an
integrated basis with automated molding and post-cure systems. Our current line
of trim and form systems ranges in price from (euro) 125,000 to (euro) 550,000
depending on the particular configuration selected.

    As of December 31, 2003, we had sold approximately 890 trim and form systems
and had accounted for approximately 50% of the installed base of trim and form
systems at several manufacturers, including AVX, Cypress Semiconductor, Delphi
Automotive Systems, EDL, EEMS, Infineon Technologies, Micronas and Motorola.

    Singulation systems. Singulation is the final step in the assembly of
semiconductors using the newly developed array connect technology in which the
molded substrates are cut into individually packaged units. Our technology is
based on the technology we used to develop our trim and form systems. We
commercially introduced a fully automated singulation system in July 1999. As of
December 31, 2003, we had installed approximately 45 systems in the field.

PLATING EQUIPMENT

    Plating systems. As part of the back-end manufacturing assembly process, the
leadframes that carry semiconductor chips must first be plated with
electro-conductive materials, such as silver or gold. Once encapsulated, the
chips must again be plated with tin-lead to facilitate soldering with other
components. As semiconductor devices become increasingly complex, semiconductor
manufacturers require plating systems that provide both higher accuracy of
plating position and uniform distribution of plating metals. In addition,
systems must operate on a fully automated basis to achieve higher throughput
levels with a minimum number of defects.

    We currently supply plating equipment to manufacturers of stamped and etched
leadframes. Although the plating equipment market for stamped leadframes is
characterized by a large installed base of equipment built in-house, we believe
that as this market continues to grow, more suppliers of leadframes will
outsource their needs for plating equipment. The equipment market for etched
leadframes is supplied by independent manufacturers.

    Our products can be used to plate semiconductors and discretes before and
after encapsulation, as well as to plate connector parts. We manufacture both
reel-to-reel systems, which plate continuous reels of leadframe material, and
cut-strip machines, which plate individual magazines or trays of subdivided
devices.

    Tin-Lead Plating (Post-Molding). On the basis of 2003 net sales, we believe
that we have the leading position in the automated tin-lead plating equipment
market. We expect that our growth in this market will be driven by semiconductor
manufacturing capacity additions as well as the replacement of existing
semiautomatic systems. Our most important current plating product is our deflash
and plating magazine-to-magazine cut-strip plating system. This system, which
accounts for approximately 50% of our plating system sales, is used by leading
semiconductor manufacturers to deflash and plate leadframes after encapsulation.
The system automatically removes plastic bleed or flash left over from the
molding process before plating and then plates semiconductor devices with a
tin-lead alloy. We intend to:

    -    maintain our position as a market leader in automated tin-lead plating
         equipment and process technology;

    -    increase our sales and market share by replacing semi-automated systems
         with our fully automated systems; and

    -    continue to introduce systems offering enhanced productivity and yields
         and lower cost of ownership.

    Other Plating Offerings. We also produce reel-to-reel systems for tin-lead
plating of discrete devices, silver spot plating and selective connector
plating.

    As of December 31, 2003, we had sold over 300 plating systems and had
supplied over 50% of the installed base of automated tin-lead plating systems at
several manufacturers, including Agere, Amkor, Chippac, Hynix, Infineon
Technologies, Micron Technology, NSEB, Philips, Samsung, SPIL and Texas
Instruments.

    All of our plating systems are modular in construction, so that they can be
configured to meet specific customer volume and product requirements. Our
systems use a patented plating wheel technology to support the application of a
broad range of selective plating techniques, including stripe, spot, mini-spot,
contour and front and rear side plating. Operators can define a range of plating

                                       12
<PAGE>

parameters, including process sequence, temperature, dosing and speed through
the use of proprietary control software.

    Our current line of plating systems ranges in price from (euro) 400,000 to
more than (euro) 1,500,000, depending on the specific configuration.

    Automated Ball Placement Systems. To capitalize on the growth of the array
connect market, we are developing a proprietary line of ball placement systems
which places the soldered ball onto the substrate molded strip in order to
provide the device with electrical conductivity. We believe that such systems
are required for semiconductor manufacturers seeking to establish a fully
automated array connect manufacturing line.

    We have also specialized since 1970 in the supply of chemicals for the
semiconductor and electronic plating industry. We develop and sell our own
chemical formulations for the plating of electronic material that incorporate
qualities required for specific leadframe and connector applications. Our
chemical products include a range of cleaners, electropolishers and strippers
that are used by, and sold in conjunction with, our plating equipment.

ADVANCED BACK END CLUSTER EQUIPMENT

    In 2001, we began marketing and selling integrated lines of assembly
equipment under the Advanced Back End Cluster Equipment under the ABC product
name principally combining products from our subsidiaries as well as from other
assembly manufacturers. The objective of the ABC system is eventually to
integrate all process steps of either conventional leadframe or array connect
back-end assembly operations into one system.

TECHNOLOGY

    We believe that important trends in the semiconductor industry, including
rapidly changing technologies for semiconductor fabrication, shorter product
cycles and the proliferation of new packages and devices, will further increase
the significance of technology in the back-end manufacturing process. In cases
where such protection is required, we believe that our technology is adequately
protected by patents. We design, develop and manufacture die sorting, flip chip
, molding, trim and form, singulation and plating systems drawing on advanced
technological features, including the following:

    DIE SORTING SYSTEMS

    Our die sorting systems are used to inspect, select and sort bare die, flip
chips, wafer level chip scale packages and opto-electronic devices as small as
0.2 millimeters square from a wafer for further processing in back-end
semiconductor assembly operations. In addition, we offer pick-and-place systems
which are also capable of handling 300 millimeter diameter wafers.

    DIE ATTACH SYSTEMS

    Our die attach systems offer solutions for process development and volume
production applications, including models catering to 1 micrometer accuracy
bonding. In addition, we offer semi-automatic systems capable of bonding from 10
grams to 125 kilograms of force, with an average placement accuracy of
approximately 2 micrometers.

    MOLDING SYSTEMS

    Multi-Plunger Technology. Our molding systems use our multi-plunger
technology, in which each mold contains multiple transfer plungers with patented
tips. This design, when combined with our small mold sizes, affords both
accuracy and flexibility to provide faster and more efficient production.
Additionally, for chip scale ball grid array substrates, our molds can
accommodate variations in board thickness, allowing our systems to meet precise
specifications. We also have developed specialized configurations to improve the
flow of mold compound in the production of ultra thin packages.

    Modular Press. Our patented electromechanical molding systems incorporate a
modular designed, rigid electromechanical press construction, resulting in
greater process control. In addition, the systems' electromechanical drive
eliminates the risk of contamination associated with the use of hydraulic
fluids, facilitating their use in clean room environments.

    TRIM AND FORM SYSTEMS

    Modular Press. Our trim and form systems have a patented modular press
section with an electromechanical drive for both press stroke and leadframe
transport, making it capable of integration with other back-end systems. Each
system has a specially guided press permitting greater stability and
significantly higher speed and precision when compared with conventional
hydraulic systems. In addition, their electromechanical motion control
facilitates the use of the systems in clean room environments.

                                       13
<PAGE>

    SINGULATION SYSTEMS

    Our singulation systems use modular vacuum heads to improve handling and
sorting capabilities. In addition, our high speed diamond-coated wheel cutting
and laser inspection technology provides both speed and flexibility to
accommodate a wide variety of array connect requirements.

    PLATING SYSTEMS

    Spot Plating Wheel. Our spot plating system uses our patented wheel concept
to permit continuous plating and eliminate the loss of production time inherent
in traditional step-and-repeat methods.

    Tin-Lead Plating Equipment. Our tin-lead plating systems include specialized
mechanical handling devices, with patented leadframe guides that facilitate
speed and flexibility in handling a wide variety of products, including fragile
leadframes. These devices allow plating to be effected without major system
changes.

    BALL PLACEMENT SYSTEMS

    We are currently developing a ball placement technology aimed at below 0.3
micron ball diameter on substrates of various designs.

    DIE HANDLING SYSTEMS

    Die Attach Equipment.

    PROPRIETARY DATA MANAGEMENT SOFTWARE

    All of our systems incorporate proprietary software enabling customers to
use advanced process control, statistical process monitoring and advanced data
management that facilitates the application of our process technology across
back-end processes and enhances the flexibility of our systems. Our software
also supports testing during the course of the trim and form process. We believe
that the software component of our systems will increase in significance over
time. The software is microprocessor controlled, allowing integration with
customers' networks.

CUSTOMERS

    Our customers consist primarily of leading US, European and Asian
semiconductor manufacturers and subcontractors. Our close relationships with our
customers provide us with valuable knowledge about evolving semiconductor
devices and packages as well as the opportunity to develop back-end systems in
conjunction with our customers. Our principal customers are set forth below.

                                       14
<PAGE>

<TABLE>
<CAPTION>

            PACKAGING EQUIPMENT                        PLATING EQUIPMENT                     DIE HANDLING SYSTEMS
------------------------------------------   -------------------------------------   -----------------------------------
<S>                  <C>                     <C>                 <C>                 <C>               <C>
Amkor                Infineon Technologies   Agere               Micron Technology   Agere             MCNC

                                             ASE                                     Amkor

Atlantic             Micron                  Amkor               Molex               Blaze             MemLink
Technology           Technology                                                      Technologies

AVX                  Micronas                Berg Electronics    NSEB                CMD               Micron
Conexant             Motorola                Compel              OSE Semiconductor   Corning           Nortel

Cyprus               NSEB                    EEMS                Philips             Dataplay          Night Vision Labs
Semiconductor

Delphi               Philips                 FCI                 Samsung             JDS Uniphase      Raytheon
Automotive
Systems

EDL                  ON                      Hitachi             SPIL                Intel             Samsung
                     Semiconductor                                                                     Electronics

EEMS                 STMicroelectronics      Hynix               Texas                                 Technicon
                                                                 Instruments
Hynix                                        Infineon            Thomas &
                                             Technologies        Betts

IBM                                          Lingsen
</TABLE>

    For the year ended December 31, 2003, Infineon Technologies accounted for
more than 10% of our net sales. Historically, a significant percentage of our
net sales in each year has been attributable to a limited number of customers;
however, the largest customers for our systems tend to vary from year to year
depending upon specific capital investment schedules, technological developments
and business prospects.

    In general, we have maintained close, long-term relationships with our
customers. The use of our systems has become an integral part of some of our
customers' decision-making process for future equipment selection, while the
quality of services rendered by the plating division has provided customers with
flexibility in making evaluations regarding capacity needs in future business
planning. We believe that our focus on large, technically sophisticated
semiconductor manufacturers and our emphasis on close relationships with a
number of such semiconductor manufacturers worldwide is an important competitive
advantage.

SALES, FIELD SUPPORT AND SERVICES

    Our worldwide sales and support organization is critical to our strategy of
maintaining close relationships with leading semiconductor manufacturers. Sales
functions are performed both on a regional and product line basis, and salesmen
have direct responsibility for new product sales and daily customer account
management. The regional offices are supplemented in some Middle Eastern and
Asian countries by distributors or agents. Sales activities in each region are
supported by product line marketing groups in the Netherlands.

    Our service and support activities include warranty services, technical
support, training, provision of spare parts, molds and tooling capability. We
maintain 22 overseas service offices. Our manufacturing facilities in the
Netherlands, Malaysia and the United States also play an important role in
marketing and sales. Each facility is responsible for the production and
technical support of the equipment that it manufactures as well as for customer
service in conjunction with field service personnel.

                                       15
<PAGE>

    The following table sets forth the number of our employees, by geographical
region, engaged in sales and marketing and after sales and customer support as
of December 31, 2003:

<TABLE>
<CAPTION>
                                                AFTER SALES
                                                    AND
                                SALES AND        CUSTOMER
                                MARKETING         SUPPORT
                                ---------       ------------
<S>                             <C>             <C>
Europe...................           36              23
Asia Pacific.............           10              26
United States............           10               9
                                ------          ------
         Total...........           56              58
                                ======          ======
</TABLE>

    We typically experience a lengthy sales cycle for our products due to the
significant amount of capital investment involved and careful coordination
required to satisfy customers' design specifications. Equipment production takes
between four and nine months after agreement upon specifications, with generally
at least an additional month for testing and acceptance.

GEOGRAPHIC MARKETS

    We believe that we are the leading supplier of trim and form, molding and
plating systems to non-Japanese semiconductor manufacturers for their operations
in Europe, the United States and the Asia Pacific region, including Korea. The
following table sets forth our net sales by geographic regions for each of the
last three years and the percentage of our total net sales represented by each
region.

<TABLE>
<CAPTION>
                                             2001                      2002                 2003
                                      ------------------      --------------------   --------------------
                                                                      (IN MILLIONS)
<S>                                  <C>             <C>      <C>              <C>   <C>             <C>
Asia Pacific..................       (euro)  68.9    46%      (euro) 44.8      54%   (euro) 55.3      65%
Europe and Rest of World......               47.8    32              28.3      34           26.7      31
North America.................               33.3    22              10.1      12            3.5       4
                                     ------------   ---       -----------     ---    -----------     ---
        Total.................       (euro) 150.0   100%      (euro) 83.2     100%   (euro) 85.5     100%
                                     ============   ===       ===========     ===    ===========     ===
</TABLE>

Net sales in 2003 in the United States declined significantly as compared to
2002 and 2001, primarily due to the completion of an investment program of a
major US semiconductor manufacturer in 2002.

BACKLOG

    At December 31, 2003, we had a backlog of approximately (euro) 39.8 million
compared to (euro) 42.5 million at December 31, 2002. The decrease in backlog
was primarily due to a relatively high backlog for trim and form integration
systems at January 1, 2003 that decreased as a result of increased shipments of
these systems in 2003. The decrease in trim and form integration systems'
backlog was partly offset by an increased backlog for singulation systems and
die handling systems. We include in backlog only those orders for which we have
received a completed purchase order. Such orders are subject to cancellation by
the customer with payment of a negotiated charge. Because of possible changes in
customer delivery schedules, cancellation of orders and potential delays in
product shipments, our backlog as of any particular date may not be
representative of actual sales for any succeeding period.

MANUFACTURING AND SUPPLIERS

    Our Besi plating division, singulation division and Besi die handling
division subcontract virtually all components and subsystems incorporated into
its products. Its manufacturing operations consist exclusively of final assembly
and test. Our Besi molding division continues to manufacture molds and tools
which it considers critical to its performance. It subcontracts all other
manufactured parts, components and subsystems. However, an increasing amount of
the manufacturing requirements of our Besi molding division and Besi trim and
form division is being subcontracted to third-party vendors. In all cases we
maintain overall responsibility for the design, assembly, test, production and
incorporation of proprietary features in their equipment. Although we have not
experienced any significant difficulty in our relationships with subcontractors,
our ability to expand our capacity and rate of growth will rely on our ability
to obtain increased production from our existing subcontractors or identify
additional qualified subcontractors.

    On occasion, we have experienced delays or unexpected costs in connection
with the introduction of new products. These problems can result in
unanticipated delays in product introduction, delays in product shipment,
declines in orders and increased costs of goods sold and warranty costs, and can
adversely impact our relationship with our customers.

                                       16
<PAGE>

    We believe that emphasis upon quality equipment and service is essential to
our competitive position, and therefore maintain at each facility a dedicated
quality management organization. We train all of our employees in basic quality
skills and conduct customer quality audits of procedures and personnel. All of
our trim and form and molding systems operations have qualified for compliance
with ISO 9000 standards.

RESEARCH AND DEVELOPMENT

    The semiconductor equipment industry is subject to rapid technological
change and new product developments and enhancements. We have periodically
introduced new generations of molding, trim and form and plating systems, and
believe that continued and timely development and introduction of new and
enhanced products is essential for us to maintain our competitive position.

    Towards that end, we are currently actively engaged in developing
enhancements to our established systems, introducing our singulation systems for
the array connect market and developing automated ball placement systems for
that market as well as other hardware and software to support full automation
and integration of the back-end process.

    Our research and development spending is customer-driven and focuses on
identifying and responding quickly to evolving customer and market requirements.
Overall research and development activities for molding systems and trim and
form systems are undertaken at our Herwen and Duiven facilities, and automated
plating, singulation and ball placement systems at our Drunen facility. All of
these facilities are located in the Netherlands. Our research and development
activities for our die handling systems are conducted in Londonderry, New
Hampshire, USA. In addition, each of our production facilities has an
engineering group whose main responsibility is application engineering,
including customization of specific customer requirements and investigation of
new manufacturing processes and materials.

    We historically have devoted a significant portion of our financial
resources to research and development programs and expect to continue to do so
in the future. For the three years ended December 31, 2001, 2002 and 2003,
aggregate research and development expense was (euro) 15.4 million, (euro) 12.5
million and (euro) 13.6 million, respectively. The increase in research and
development spending in 2003 as compared to 2002 reflects our continued
investment in research and development, mainly for the development of new trim
and form systems, our new AMS-i molding system, as well as spending for
singulation systems.

    At December 31, 2003, we employed a total of 50 engineers engaged in
research and development projects for molding and trim and form systems. We also
employed approximately 28 engineers at Meco engaged in research and development
of plating systems and singulation systems, and approximately 11 engineers at
Besi Die Handling engaged in research and development for die handling systems.

COMPETITION

    We are one of the world's leading independent suppliers of semiconductor
assembly equipment. The market for assembly systems is highly competitive. In
each of the markets we serve, we face competition from established and potential
competitors, some of which may have greater financial, engineering,
manufacturing and marketing resources than we do.

    We believe we compete favorably with respect to the following factors:

    -    product performance;

    -    ease of use of our products;

    -    product reliability;

    -    product pricing;

    -    breadth of product portfolio;

    -    historical customer relationships; and

    -    customer service and support.

    A significant amount of the world's semiconductor manufacturing activity is
concentrated in Japan, a market which has traditionally been supplied by
Japanese semiconductor equipment manufacturers and historically has been
difficult for non-Japanese suppliers to penetrate. Since 1995, we have supplied
plating systems to the connector industry in Japan, and in recent years have
begun to ship plating systems to Japanese semiconductor manufacturers. While we
believe that this development will provide an opportunity to expand and broaden
our presence in the Japanese market, given the historical difficulties of
entering that market, and the existence of a number of major Japanese
competitors, we may not be successful in doing so. Moreover, Japanese
semiconductor equipment manufacturers aggressively compete in areas outside
Japan, particularly in the Asia Pacific region. We believe that Japanese
suppliers will be our most significant competitors for the foreseeable future
due to their strength in the supply of equipment for high volume, low cost
production and their high levels of excess capacity relative to other suppliers,
including us.

    The semiconductor assembly industry is characterized by rapidly changing
technology and a high rate of technological obsolescence. Development of new
technologies that have price/performance characteristics superior to our
technologies could

                                       17
<PAGE>

adversely affect our results of operations. In order to remain competitive, we
believe that it will be necessary to expend substantial effort on continuing
product improvement and new product development. We cannot assure you that we
will be able to develop and market new products successfully or that the
products introduced by others will not render our products or technologies
non-competitive or obsolete.

ORGANIZATIONAL STRUCTURE

    We are the ultimate parent of our group, which as of December 31, 2003
included each of the subsidiaries set forth below. Unless otherwise indicated,
each subsidiary is wholly owned, directly or indirectly, and is included in our
consolidated financial statements set forth elsewhere in this Annual Report on
Form 20-F. Each of the subsidiaries operates in its country of incorporation.

<TABLE>
<CAPTION>
                                                                LOCATION AND                        PERCENTAGE
               NAME                                        COUNTRY OF INCORPORATION                OF OWNERSHIP
               ----                                    ----------------------------------          ------------
<S>                                                    <C>                                       <C>
BE Semiconductor Industries USA, Inc.                  Londonderry, New Hampshire, USA                 100%
Fico B.V.                                              Duiven, the Netherlands                         100%
Fico Molding Systems B.V.                              Duiven, the Netherlands                         100%
Fico Trim & Form Integration Systems B.V.              Duiven, the Netherlands                         100%
Fico Tooling B.V.                                      Duiven, the Netherlands                         100%
Fico Tooling Leshan Company Ltd.                       Leshan, China                                    87%
Fico Asia SDN. BHD.                                    Shah Alam, Malaysia                             100%
Fico America Inc.                                      Chandler, Arizona, USA                          100%
ASM Fico (F.E.) SDN. BHD.                              Shah Alam, Malaysia                            99.9% (1)
Besi Korea Ltd.                                        Seoul, Korea                                    100%
Fico Hong Kong Ltd.                                    Hong Kong, China                                100%
Nihon Fico Ltd.                                        Tokyo, Japan                                    100%
Fico Sales & Service Pte. Ltd.                         Singapore                                       100%
Meco International B.V.                                Drunen, the Netherlands                         100%
Meco Equipment Engineers B.V.                          Drunen, the Netherlands                         100%
Besi Japan Co. Ltd.                                    Tokyo, Japan                                    100%
Meco Equipment Engineers Inc.                          Rock Hill, South Carolina, USA                  100%
Meco Equipment Engineers (Far East) Pte Ltd.           Singapore                                       100%
Besi Die Handling Inc.                                 Londonderry, New Hampshire, USA                 100%
</TABLE>

1) We have a 100% beneficial ownership.

PROPERTY, PLANTS AND EQUIPMENT

    Our molding systems and molds are manufactured in facilities owned by us
aggregating approximately 96,000 square feet located in Duiven and Brunssum, the
Netherlands. We lease, under a capital lease, an approximately 95,000 square
foot manufacturing facility for trim and form systems in Duiven, the Netherlands
and own an approximately 24,000 square foot manufacturing facility for trim and
form systems in Shah Alam, Malaysia. In Leshan, China, we own a facility of
approximately 30,000 square feet which we use as a facility for tooling
manufacturing. Our automated plating and singulation systems are manufactured at
facilities leased by us aggregating approximately 95,000 square feet in Drunen,
the Netherlands. We also lease approximately 22,264 square feet of facilities
for our die sorting systems in Londonderry, New Hampshire, USA.

    On June 28, 2002, we sold the land and buildings of our Meco subsidiary in
Drunen, the Netherlands in a sale and lease back transaction for (euro) 6.5
million in cash. At the date of this transaction, the cost of the land and
buildings totaled (euro) 6.9 million and the net book value of the real estate
sold by us amounted to (euro) 5.4 million. Our gain on this transaction of
(euro) 1.1 million is being amortized and netted against rental expenses over
the twelve and a half year term of the lease. Gross rental expenses total (euro)
0.6 million per annum.

    Our rental obligations for our facilities and machinery in each of the
previous three years were (euro) 1.6 million, (euro) 9.1 million, and (euro) 7.7
million, respectively.

    The following table summarizes information with respect to the principal
facilities that we leased or owned as of December 31, 2003.

                                       18
<PAGE>

<TABLE>
<CAPTION>
        PLANT LOCATION                     PRINCIPAL ACTIVITIES          AREA (SQ. FEET)
        --------------                     --------------------          ---------------
<S>                                    <C>                               <C>
Herwen, the Netherlands..........      Idle                                   Idle
Brunssum, the Netherlands........      Manufacturing                           16,000
Duiven, the Netherlands..........      Manufacturing                          175,000
Shah Alam, Malaysia..............      Manufacturing                           24,000
Drunen, the Netherlands..........      Manufacturing; Executive Offices        95,000
Londonderry, New Hampshire,
United States....................      Manufacturing                           22,264
Leshan, China....................      Manufacturing                           30,000
</TABLE>

    On February 6, 2004, we sold the land and buildings we owned in Duiven, the
Netherlands in a conditional sale and lease back transaction for (euro) 14.9
million in cash. At the date of the transaction, the net book value of the real
estate sold was approximately equal to the selling price of the real estate.
Gross rental expenses will amount to (euro) 1.3 million per annum. We granted
the buyer a (euro) 3.0 million loan which is payable over a maximum period of 24
months. The loan can be repaid at any time during the term of the loan. The loan
is secured by a second mortgage on the land and buildings which were the subject
of the transaction. The loan bears 8.75% interest.

CAPITAL EXPENDITURES

    Our capital expenditures were (euro) 3.4 million in 2001, (euro) 4.9 million
in 2002 and (euro) 11.9 in 2003.

    The expenditures in 2003 were incurred primarily for the construction of an
80,000 square foot facility in Duiven, the Netherlands for molding systems and
tooling manufacturing and the establishment of our first manufacturing facility
in China for the production of tools.

    We expect capital expenditures in 2004 to decrease to approximately (euro)
5.0 million due to the completion of these projects in 2003. Part of the 2004
capital expenditures will be utilized to further expand our production capacity
in China.

LEGAL PROCEEDINGS AND GOVERNMENTAL REGULATIONS

    We are not currently, nor have we in the last 12 months been, involved in
any litigation or arbitration proceedings that have or, in the last 12 months,
have had, a significant effect on our financial position or results of
operations. We are not aware of any threatened or potential legal proceedings
that could have a significant effect on our financial position or results of
operations.

    Our business involves the use of hazardous materials, and environmental laws
and regulations may expose us to liability and increase our costs. We
historically have handled small amounts of hazardous materials as part of our
manufacturing activities. Consequently, our operations are subject to
environmental laws and regulations governing, among other things, the use and
handling of hazardous substances and waste disposal. We may be required to incur
environmental costs to comply with current or future environmental laws. As with
other companies engaged in manufacturing activities that involve hazardous
materials, a risk of environmental liability is inherent in our manufacturing
activities, as is the risk that our facilities will be shut down in the event of
a release of hazardous waste. The costs associated with environmental compliance
or remediation efforts or other environmental liabilities could adversely affect
our business.

ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS

    The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with "Selected Consolidated
Financial Data" and our consolidated financial statements and notes thereto
appearing elsewhere in this Annual Report on Form 20-F. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties
and assumptions. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of several factors, including
those set forth under "Risk Factors" and elsewhere in this Annual Report on Form
20-F.

    OVERVIEW

    We design, develop, manufacture, market and service products for the
semiconductor industry's back-end assembly operations. We operate our molding
systems and trim and form integration systems business through our Fico
subsidiary and our selective and tin lead plating systems and singulation
systems business through our Meco subsidiary. We operate our flip chip die
attach and die sorting systems business through our Besi Die Handling
subsidiary, which we created by consolidating our RDA and Laurier subsidiaries.

    Our net sales and results of operations depend in significant part on the
level of capital expenditures by semiconductor manufacturers, which in turn
depends on the current and anticipated market demand for semiconductors and for
products utilizing semiconductors. Demand for semiconductor devices and
expenditures for the equipment required to assemble semiconductors is cyclical,
depending in large part on levels of demand worldwide for computing and
peripheral equipment, telecommunications devices and automotive and industrial
components as well as the production capacity of global semiconductor
manufacturers. Historically, as demand for these devices has increased,
semiconductor manufacturers have sought to increase their capacity by increasing
the number of wafer fabrication facilities and equipment production lines, and
installing equipment that incorporates new technology to increase the number of
devices and the amount of computing power per device. As demand has increased,
semiconductor prices have also typically risen. Conversely, if the additional
capacity outstrips the demand for semiconductor devices, manufacturers
historically have cancelled or deferred additional equipment purchases until
demand again begins to outstrip aggregate capacity. Under such circumstances,
semiconductor prices typically fall.

    Due to the lead times associated with the production of our semiconductor
manufacturing equipment, our sales orders historically have lagged any downturn
or recovery in the semiconductor market by approximately nine to twelve months.
Our

                                       19
<PAGE>

results of operations historically have fluctuated significantly both on an
annual and quarterly basis depending on overall levels of semiconductor demand
globally and the specific production requirements of our principal customers.
During 2001, we saw a significant deterioration in industry conditions. Although
we experienced increased order levels in 2002, the slowdown in the semiconductor
and semiconductor equipment industry continued throughout 2002 and 2003.

    Our sales are generated primarily by shipments to the Asian manufacturing
operations of leading US and European semiconductor manufacturers and, to a
lesser extent, Korean and other Asian manufacturers and subcontractors. Most of
our principal competitors on a worldwide basis are Japanese, which historically
have dominated the Japanese market, because Japanese semiconductor manufacturers
typically purchase equipment from domestic suppliers. To date, our sales to
Japanese customers have been limited.

    Our sales to specific customers tend to vary significantly from year to year
depending on customers' capital expenditure budgets, new product introductions,
production capacity and packaging requirements. In addition, we derive a
substantial portion of our net sales from products that have an average selling
price in excess of (euro) 300,000 and that have significant lead times between
the initial order and delivery of the product. The timing and recognition of net
sales from customer orders can cause significant fluctuations in operating
results from quarter to quarter.

    On November 15, 2001, we sold our 30% equity interest in Possehl BESI
Electronics N.V., or PBE, to another shareholder L. Possehl & Co., mbH, or
Possehl, for (euro) 18.1 million cash. We determined that our ongoing
involvement in PBE was not strategic to our long-term ambition to be the leading
provider of integrated assembly solutions to the semiconductor industry. In
addition, we determined that our interests would be better served by redeploying
the cash from the transaction to help fund attractive opportunities in what we
believe are higher growth markets in our core equipment business, such as chip
scale ball grid array and other assembly technologies, either through internal
means or through acquisition. In connection with the transaction, we recorded a
loss of (euro) 4.8 million in the fourth quarter of 2001, which is included in
"equity in loss of affiliated companies and loss on sale of affiliated
companies" in our Consolidated Statements of Operations. The loss on disposal of
PBE included the reversal of the portion of our cumulative translation
adjustment component of shareholders' equity relating to our investment in PBE,
which reduced the loss on sale by (euro) 5.3 million.

    On January 4, 2002, we acquired Laurier, Inc. , a privately held company
located in Londonderry, New Hampshire, USA, for US$ 8.9 million in cash. Laurier
manufactures die sorting equipment used to inspect, select and sort bare die,
flip chips, wafer level chip scale packages and opto-electronic devices from a
wafer for further processing in assembly operations. Laurier's results of
operations are included in our consolidated results of operations from the date
of acquisition.

    EVALUATION OF CRITICAL ACCOUNTING POLICIES

    Our discussion and analysis of our financial condition and results of
operations are based upon our condensed Consolidated Financial Statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting periods. Areas
where significant judgements are made include, but are not limited to, revenue
recognition, inventories, long-lived assets and goodwill and intangible assets.
Actual results could differ materially from these estimates.

    REVENUE RECOGNITION

    Our revenue recognition policy conforms to Emerging Issues Task Force
("EITF") 00-21 and the Securities and Exchange Commission Staff Accounting
Bulletin No. 101 and 104. Advance payments received from customers are recorded
as a liability until the products have been shipped. Shipment of products occurs
after a customer accepts the product at our premises. We recognize revenues from
sales of products upon shipment. The risk of loss and rewards of ownership with
respect to products transfer to customers at that time. The sale of the product
to the customer is thereby considered complete and no significant obligations
remain after the sale is completed. A customer's sole recourse against us is to
enforce our obligations relating to installation and warranty. Operating
expenses and other income and expense items are recognized in the income
statement as incurred or earned.

    INVENTORIES

    We periodically evaluate whether or not the carrying value of our
inventories is in excess of market value or whether we have excess or obsolete
items in our inventory. Our evaluation includes judgements regarding future
market developments that might have an adverse effect on the valuation of our
inventories.

    Inventories are stated at the lower of cost (first-in, first-out method) or
market value. Cost includes net prices paid for materials purchased, charges for
freight and custom duties, production labor costs and factory overhead. Precious
metals are valued at the market prices at the balance sheet date. Variances in
market price from balance sheet date to balance sheet date are recorded in gross
profit as gains or losses.

                                       20
<PAGE>

    LONG-LIVED ASSETS

    Long-lived assets, such as property, plant and equipment, and purchased
intangibles subject to amortization, are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is determined
by a comparison of the carrying amount of an asset to estimated undiscounted
future cash flows. If the sum of the estimated undiscounted future cash flows is
less than the carrying amount of the related asset, then an impairment charge is
recognized. The measurement of the impairment charge is based upon the amount
that the carrying value of the asset exceeds its fair value. Fair value is
generally determined on the basis of estimated future discounted cash flows.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less costs to sell, and depreciation ceases.

    GOODWILL AND INTANGIBLE ASSETS

    Goodwill represents the excess of the costs of purchased businesses over the
fair value of their net assets at date of acquisition and, through December 31,
2001, was being amortized by the straight-line method. The amortization of the
goodwill from the Meco acquisition (13 years) and the RDA acquisition (13 years)
was based on the weighted average remaining lives of Meco's and RDA's patents as
determined by an independent valuation. Goodwill was assessed for recoverability
by determining whether the amortization of the goodwill balance over its
remaining life could be recovered through undiscounted future operating cash
flows of the acquired operation. As of January 1, 2002, goodwill is no longer
amortized, but is required to be evaluated for impairment at least annually in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 142,
"Goodwill and Other Intangible Assets".

    We adopted the provisions of SFAS No. 141, "Business combinations" as of
July 1, 2001 and SFAS No. 142 as of January 1, 2002. Goodwill and any intangible
asset determined to have an indefinite useful life acquired in a purchase
business combination completed after June 30, 2001 and determined to have an
indefinite useful life are not amortized, but will continue to be evaluated for
impairment annually in accordance with SFAS No. 142.

    In connection with the transitional goodwill impairment evaluation, SFAS No.
142 required us to perform an assessment of whether there was an indication that
goodwill, and equity-method goodwill, was impaired as of the date of adoption.
To accomplish this, we were required to identify our reporting units and
determine the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of January 1, 2002. We were required to determine the fair
value of each reporting unit and compare it to the reporting unit's carrying
amount within six months of January 1, 2002. To the extent a reporting unit's
carrying amount exceeded its fair value, an indication existed that the
reporting unit's goodwill may be impaired and the second step of the
transitional impairment test had to be performed. In the second step, the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of its assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS No. 141, had to be compared to its carrying amount, both
of which would be measured as of the date of adoption. This second step was
required to be completed as soon as possible, but no later than the end of the
year of the adoption of SFAS No. 142. We were not required to perform the second
step for any of our identified reporting units during our January 1, 2002
goodwill transitional impairment test.

    The amortization of patents and other identifiable intangible assets is
based on the weighted average remaining lives of 13 years for Meco and Besi Die
Handling, and 16 years for Fico as determined by an independent valuation at the
date of acquisition.

    Goodwill and intangible assets not subject to amortization are tested
annually for impairment. An impairment loss is recognized to the extent that the
carrying amount exceeds the asset's fair value.

    We do not have any identifiable assets with indefinite lives.

    CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

    We are not involved in any speculative trading activities.

    Our only related party transactions were with our former PBE joint venture,
of which we sold our 30% share on November 15, 2001. Such related party
transactions consisted of sales and purchases as specified in the following
table:

<TABLE>
<CAPTION>
                       January 1 to
                       November 15,
(Euro in thousands)        2001
-------------------    ------------
<S>                    <C>
Sales................     3,486
Purchases............       270
                          =====
</TABLE>

    Management believes that these transactions were conducted at arms length
basis on terms and conditions equivalent to those

                                       21
<PAGE>

that could have been obtained from third parties.

    The following table discloses our contractual obligations and commercial
commitments.

<TABLE>
<CAPTION>
                                                               Payments due by period
                                          Less than          1-3         4-5         After 5
(Euro in thousands)                        1 year           years        years        years         Total
-------------------                       ---------------------------------------------------------------
<S>                                       <C>               <C>          <C>        <C>             <C>
Long-term debt..........................      645           1,061            -           -           1,706
            Capital lease obligations
  including imputed interest............      579           1,158        1,158       6,320           9,215

Operating lease.........................    1,171           1,728        1,483       4,234           8,616

Unconditional purchase obligations......    5,771               -            -           -           5,771
                                            --------------------------------------------------------------
    Total contractual obligations and
  commercial commitments................    8,166           3,947        2,641      10,554          25,308
                                            ==============================================================
</TABLE>

    Unconditional purchase obligations relate to buildings, equipment, materials
and specific external technical staff.

    OFF-BALANCE SHEET ARRANGEMENTS

    We do not have any off-balance sheet arrangements, as that term is defined
in Item 5.E.2 of Form 20-F.

    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are exposed to market risks from changes in foreign currency exchange
rates and interest rates, which may adversely affect our results of operations
and financial condition. We seek to minimize the risks associated with interest
rate and foreign currency exchange rate fluctuations through our regular
operating and financing activities and, when deemed appropriate, through the use
of derivative financial instruments. We do not use financial instruments for
trading or other speculative purposes.

    FOREIGN CURRENCY EXCHANGE RATE RISK

    As a consequence of the global nature of our businesses, our operations and
reported financial results and cash flows are exposed to the risks associated
with fluctuations in exchange rates between the euro and other major world
currencies. Currency exchange rate movements typically also affect economic
growth, inflation, interest rates, government actions and other factors. These
changes can cause us to adjust our financing and operating strategies. The
discussion below of changes in currency exchange rates does not incorporate
these other economic factors. For example, the sensitivity analysis presented in
the foreign exchange rate risk discussion below does not take into account the
possibility that rates can move in opposite directions and that gains from one
category may or may not be offset by losses from another category. Operations
outside the Netherlands and other countries that have adopted the euro as their
currency for 2003 constitute 13% of our net sales. As currency exchange rates
change, translation of the statements of operations of our international
business into euro affects year-over-year comparability. We historically have
not hedged translation risks, because cash flows from international operations
have generally been reinvested locally. We estimate that a 10% change in foreign
exchange rates would affect our reported operating income (loss) by less than
(euro) 1.0 million.

    Our currency risk exposure primarily occurs because we generate a portion of
our net sales in currencies other than the euro while the major share of the
corresponding cost of sales is incurred in euro. The percentage of our
consolidated net sales which is denominated in euro amounted to approximately
72% of total net sales in the year ended December 31, 2003, whereas net sales
represented by US dollars or dollar-linked currencies amounted to approximately
28%. Approximately 81% of our costs and expenses were denominated in the euro
and the remaining 19% in various currencies, principally the US dollar and
US-dollar linked currencies. In order to mitigate the impact of currency
exchange rate fluctuations, we continually assess our remaining exposure to
currency risks and hedge such risks through the use of derivative financial
instruments. The principal derivative financial instruments currently used by us
to cover foreign currency exposures are forward foreign currency exchange
contracts that qualify for hedge accounting.

    INTEREST RATE RISK

    Our long-term debt, excluding capital leases, bears interest at fixed rates.
Our long-term capital lease obligations, bank debt and lines of credit currently
bear a variable rate of interest. An immediate 10% change in interest rates
would not have a material effect on our results of operations over the next
fiscal year.

                                       22
<PAGE>

RESULTS OF OPERATIONS

SUMMARY FINANCIAL AND OTHER OPERATING DATA

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                   2001           2002           2003           2003
(Amounts in thousands except share and per share data)             EURO           EURO           EURO          USD(1)
------------------------------------------------------         -------------------------------------------------------
<S>                                                            <C>            <C>            <C>            <C>
Net sales .................................................       150,030         83,228         85,500        107,704
Cost of sales .............................................        96,253         55,849         63,345         79,795
                                                               -------------------------------------------------------

Gross profit ..............................................        53,777         27,379         22,155         27,909

Selling, general and administrative expenses ..............        30,563         26,235         25,436         32,042
Research and development expenses .........................        15,446         12,470         13,564         17,087
Restructuring charges .....................................         8,306            786              -              -
Impairment of intangibles .................................             -          3,302            287            361
Amortization of intangible assets .........................         3,848          2,591          2,522          3,177

                                                               -------------------------------------------------------
Total operating expenses ..................................        58,163         45,384         41,809         52,667

Operating loss ............................................        (4,386)       (18,005)       (19,654)       (24,758)
Interest income, net ......................................         4,240          3,395          2,815          3,546

                                                               -------------------------------------------------------
Loss before taxes and equity in loss of affiliated
  companies and minority interest .........................          (146)       (14,610)       (16,839)       (21,212)
Income taxes (benefit) ....................................           518          2,404         (3,292)        (4,147)

                                                               -------------------------------------------------------
Loss before equity in loss of affiliated companies
  and minority interest ...................................          (664)       (17,014)       (13,547)       (17,065)
Equity in loss of affiliated companies and loss on
  sale of affiliated companies ............................       (16,314)             -              -              -
Minority interest .........................................             -              3             50             63

                                                               -------------------------------------------------------
Net loss ..................................................       (16,978)       (17,011)       (13,497)       (17,002)
                                                               -------------------------------------------------------

Loss per share:
Basic .....................................................         (0.53)         (0.54)         (0.44)         (0.55)
Diluted ...................................................         (0.53)         (0.54)         (0.44)         (0.55)

Weighted average number of shares used to compute
 net loss per share:
Basic .....................................................    31,794,675     31,462,482     30,813,681     30,813,681
Diluted ...................................................    31,794,675     31,462,482     30,813,681     30,813,681
Other operating data:
Capital expenditures ......................................         3,393          4,903         11,889         14,976
Depreciation and amortization .............................         8,343          6,726          6,469          8,149
Net cash provided by (used in) operating activities .......        14,942         (4,224)         5,296          6,672
                                                               =======================================================
</TABLE>

(1) Translated solely for convenience of the reader at the noon buying rate on
December 31, 2003 ((euro) 1.00 = US$ 1.2597)

    2002 COMPARED TO 2003

    NET SALES

    Our net sales consist of sales of molding systems, trim and form integration
systems, singulation systems, plating systems and die handling systems.

    Our net sales increased from (euro) 83.2 million in 2002 to (euro) 85.5
million in 2003, an increase of 2.8%. The increase in net sales in 2003 as
compared to 2002 was due to increased order levels in the second half of 2002,
resulting in increased shipments in 2003,

                                       23
<PAGE>

especially for trim and form integration systems and singulation systems, offset
by lower sales for die handling systems.

    Our net sales per product line for the periods indicated were as follows:

<TABLE>
<CAPTION>

                   (Euro in million)                            2002            2003         % change
                   -----------------                           --------------------------------------
<S>                                                            <C>              <C>          <C>
Molding systems.........................................        35.2            36.6              4.0
Trim and form integration systems.......................        15.8            22.1             39.9
Singulation systems.....................................         2.9             4.6             58.6
Plating systems.........................................        21.7            20.1             (7.4)
Die handling systems....................................         7.6             2.1            (72.4)

                                                               --------------------------------------
Total net sales.........................................        83.2            85.5              2.8
                                                               ======================================
</TABLE>

    BACKLOG

    Our backlog at December 31, 2003 decreased by 6.4% to (euro) 39.8 million
from (euro) 42.5 million at December 31, 2002. This decrease was primarily due
to a relatively high backlog for trim and form integration systems at January 1,
2003 that decreased as a result of increased shipments of these systems in 2003.
The decrease in trim and form integration systems' backlog was partly offset by
an increased backlog for singulation systems and die handling systems. New
orders in 2003 were (euro) 82.9 million, a decrease of 7.0% as compared to
(euro) 89.1 million in 2002, which included (euro) 1.8 million of die handling
systems' backlog that was acquired as part of our purchase of Laurier. The
book-to-bill ratio for 2003 was 0.97 compared to 1.07 for 2002.

    We include in backlog only those orders for which we have received a
completed purchase order. Such orders are subject to cancellation by the
customer with payment of a negotiated charge. Because of the possibility of
customer changes in delivery schedules, cancellation of orders and potential
delays in product shipments, our backlog as of any particular date may not be
representative of actual sales for any succeeding period.

    GROSS PROFIT

    Cost of sales includes materials, purchased components and subassemblies
from subcontractors, direct labor and manufacturing overhead. It also includes
costs relating to the pre-production and customization of new equipment once a
product has advanced beyond the prototype stage. Changes in our cost of sales
typically lag changes in net sales due to our manufacturing lead times.

    Gross profit decreased by 19.0% from (euro) 27.4 million in 2002 to (euro)
22.2 million in 2003. As a percentage of net sales, gross profit decreased from
32.9% in 2002 to 25.9% in 2003. The gross profit in 2003 was adversely affected
by slightly lower margins, mainly caused by the devaluation of the US dollar
against the euro. Furthermore, charges of (euro) 2.9 million were recorded in
the fourth quarter of 2003 for higher engineering and modification costs and
inventory write-downs associated with the completion of a multi-unit order with
a specific customer.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    Selling, general and administrative expenses consist of expenses related to
sales of products and services, administrative and other corporate level
expenses not related to the production of products and all expenses associated
with ongoing customer support.

    Our selling, general and administrative expenses in 2002 totaled (euro) 26.2
million and represented 31.5% of net sales compared to (euro) 25.4 million or
29.7% of net sales in 2003. The decrease in selling, general and administrative
expenses resulted primarily from our ongoing efforts to reduce the operating
expenses.

    RESEARCH AND DEVELOPMENT EXPENSES

    Research and development spending relating to packaging and die handling
equipment varies from year to year depending on our new product development
cycle. As research and development expenses do not include pre-production and
customization costs, our research and development expenses decrease as products
move from prototype development to production and final customer acceptance.

    Research and development expenses relating to plating equipment include
costs related solely to new product development efforts and exclude new product
pre-production and customization expenses and design and engineering expenses
incurred in sustaining and enhancing existing product lines.

    Our research and development expenses increased from (euro) 12.5 million in
2002 to (euro) 13.6 million in 2003. As a percentage of net sales, research and
development expenses were 15.0% and 15.9% in 2002 and 2003, respectively. The
increase in research and development spending in 2003 reflects our continued
investment in research and development, mainly for the development of new trim
and form systems, our new AMS-i molding system, as well as spending for
singulation systems.

    RESTRUCTURING CHARGES

    On June 15, 2001, we adopted an initial restructuring plan that included a
reduction of our global workforce (including

                                       24
<PAGE>

temporary workers) of approximately 13%. These actions were necessitated by the
semiconductor industry downturn that resulted in a significant reduction in new
orders. We undertook this restructuring: (i) to better align our cost structure
with anticipated revenues and (ii) to improve manufacturing efficiency and
productivity. We recorded pre-tax restructuring charges of (euro) 3.6 million in
connection with the reduction of our workforce in the second quarter of 2001. As
a result of continued adverse market conditions in the semiconductor equipment
industry, we took additional restructuring measures in each of the third and
fourth quarters of 2001, which resulted in a cumulative workforce reduction of
approximately 26%. In connection with those additional restructuring measures,
we incurred additional restructuring charges for employee severance and benefits
of (euro) 1.7 million and (euro) 3.0 million in the third and fourth quarter of
2001, respectively.

    In the third quarter of 2002, we relocated our flip chip die attach
operations from New Jersey to New Hampshire in the United States and
consolidated these activities with our die sorting business to form a single die
handling systems business unit. In the fourth quarter of 2002 we restructured
the combined business by reducing its workforce by approximately 28%. We
recorded a restructuring charge relating to these actions of (euro) 0.8 million
in 2002.

    Changes in the restructuring reserve were as follows:

<TABLE>
<CAPTION>
                                                   2001                2002                 2003
                                                   EURO                EURO                 EURO
                                                 -----------------------------------------------
<S>                                              <C>                 <C>                   <C>
Balance at January 1,.................                -               5,487                1,281
Additions.............................            8,306               1,991                    -
Releases..............................                -              (1,201)                   -
Impairments on assets.................                -                (107)                   -
Cash payments.........................           (2,819)             (4,889)                (760)
                                                 -----------------------------------------------
Balance at December 31,...............            5,487               1,281                  521
                                                 ===============================================
</TABLE>

    The 2001 provision for the reduction in workforce included severance and
other benefits for approximately 180 employees in the Netherlands and Asia. The
additions to the restructuring reserve in 2002 related to higher than expected
severance cost, later than expected final employment terminations and severance
payments for the reduction in workforce in the United States and relocation
cost. The releases in 2002 mainly relate to social security expenses and
disabled personnel included for which we were not obliged to pay. Total
remaining cash outlays for restructuring activities are expected to be (euro)
0.5 million, which relate mainly to pension premiums to be paid for laid off
employees over a period of two to five years.

    OPERATING LOSS

    Operating loss increased from (euro) 18.0 million in 2002 to (euro) 19.7
million in 2003. Operating loss for 2002 included non-cash goodwill impairment
of (euro) 3.3 million and restructuring charges of (euro) 0.8 million. Operating
loss for 2003 included non-cash patent impairment of (euro) 0.3 million and
charges of (euro) 2.9 million related to higher engineering and modification
costs and inventory write-downs associated with the completion of a multi-unit
order with a specific customer. Furthermore, operating loss in 2003 increased as
compared to 2002 due to slightly lower order margins as well as increased
spending on research and development.

    We incurred annual patent and other identifiable assets amortization charges
of (euro) 2.5 million in 2003, which related to the acquisitions of our Fico,
Meco, RDA and Laurier subsidiaries in October 1993, May 1995, September 2000 and
January 2002, respectively.

    As of January 1, 2002, we adopted SFAS No. 142 and SFAS No. 144, "Accounting
for the impairment or disposal of long-lived assets". SFAS No. 142 eliminates
the amortization of goodwill and indefinite-lived intangible assets, addresses
the amortization of intangible assets with finite lives and addresses impairment
testing and recognition for goodwill and intangible assets with indefinite
lives. SFAS No. 144 establishes a single model for the impairment of long-lived
assets and broadens the presentation of discontinued operations to include
disposal of an individual business. As a result of the adoption of SFAS No. 142,
goodwill amortization ceased.

    We reviewed our business and determined that there are four reporting units
to be reviewed for impairment in accordance with the standard - the reporting
units were: packaging equipment, plating and singulation equipment, flip chip
die attach equipment and die sorting equipment. Upon adoption of SFAS No. 142 in
the first quarter of 2002, we completed the required transitional impairment
testing of goodwill, and based upon those analyses, did not identify any
impairment charges as a result of adoption of this standard effective January 1,
2002.

    We have determined that our annual test for impairment of goodwill will take
place at the end of the fourth quarter of each year, which coincides with the
completion of our annual forecasting process. In the third quarter of 2002, we
consolidated our die attach

                                       25
<PAGE>

equipment business unit and die sort equipment business into a single die
handling equipment business unit. Due to the severity and the length of the
current industry downturn and uncertainty of the timing of improvement in
industry conditions, we have revised our earnings forecasts for each of our
business units that were tested for impairment. As a result, in the fourth
quarter of fiscal year 2002, we recognized a goodwill impairment loss of (euro)
3.3 million in the die handling equipment reporting unit. The fair value of each
reporting unit was estimated using the expected present value of future cash
flows.

    In the fourth quarter of 2003 we tested our intangibles for impairment. As a
result of this impairment test, an impairment of patents of die handling
equipment to an amount of (euro) 0.3 million was recorded. No impairment on
other intangibles was required.

    We do not have any identifiable assets with indefinite lives.

    INTEREST INCOME, NET

    Our interest income, net, decreased from (euro) 3.4 million in 2002 to
(euro) 2.8 million in 2003, mainly due to lower market interest rates and
slightly lower cash balances.

    INCOME TAXES

    Our income tax expense was (euro) 2.4 million in 2002 as compared to an
income tax benefit of (euro) 3.3 million in 2003. The income tax rate as shown
in the results of operations was 19.6% in 2003. The tax rate for 2002 was not
meaningful as we recorded a valuation allowance of (euro) 6.0 million in the
fourth quarter of 2002. The tax rate for 2003 is significantly lower than the
domestic tax rate of the Company, due to losses in certain foreign subsidiaries
in which we were not able to recognize a tax benefit, as management believes
that the recent losses of these subsidiaries should be given substantially more
weight than forecasts of future profitability. In 2003, an amount of (euro) 2.8
million of available tax benefit was not recognized.

    In the fourth quarter of fiscal year 2002, as part of the income tax
provision for the period, we recorded a charge of (euro) 6.0 million through the
establishment of a valuation allowance against our deferred tax asset consisting
primarily of US net operating loss carry forwards and temporary differences. We
determined that the valuation allowance was required based on our recent losses,
which were given substantially more weight than forecasts of future
profitability calculating tax valuation allowances. Until we utilize these US
operating loss carry forwards, our income tax provision will reflect mainly
domestic taxation.

    NET LOSS

    Our net loss amounted to (euro) 17.0 million in 2002 and (euro) 13.5 million
in 2003. Net loss for 2002 was negatively impacted by (i) goodwill impairment of
(euro) 3.3 million, (ii) a non-cash valuation allowance of (euro) 6.0 million
against our net deferred tax assets and (iii) after tax restructuring charges of
(euro) 0.6 million related to our die handling operations.

    Net loss for 2003 was negatively impacted by slightly lower margins due to
the devaluation of the US dollar against the euro, as well as by charges of
(euro) 2.9 million related to higher engineering and modification costs and
inventory write-downs associated with the completion of a multi-unit order with
a specific customer and a (euro) 0.3 million charge for the impairment of
intangibles.

    2001 COMPARED TO 2002

    NET SALES

    Our net sales decreased from (euro) 150.0 million in 2001 to (euro) 83.2
million in 2002, a decrease of 44.5%. The decrease in net sales in 2002 as
compared to 2001 was due to a significant deterioration in industry conditions,
extensions of product delivery dates and order cancellations by customers,
resulting in a significantly lower volume of shipments. Net sales in the fourth
quarter of 2002 increased by 21.4% compared to net sales in the third quarter of
2002 due to increased order activity in the first half of 2002, resulting in
increased shipments in the fourth quarter of 2002.

    Our net sales per product line for the periods indicated were as follows:

    <TABLE>
    <CAPTION>

             (Euro in million)                      2001            2002         % change
              ----------------                     --------------------------------------
<S>                                                <C>              <C>             <C>
Molding systems.............................        60.9            35.2            (42.2)
Trim and form integration systems...........        41.5            15.8            (61.9)
Singulation systems.........................         4.6             2.9            (37.0)
Plating systems.............................        36.1            21.7            (39.9)
Die handling systems........................         6.9             7.6             10.1
                                                   --------------------------------------
Total net sales.............................       150.0            83.2            (44.5)
                                                   ======================================
</TABLE>

    BACKLOG

    Our backlog at December 31, 2002 increased by 16.4% to (euro) 42.5 million
from (euro) 36.5 million at December 31, 2001, primarily

                                       26
<PAGE>

due to increased bookings for molding systems, trim and form integration systems
and plating systems. New orders in 2002 were (euro) 89.1 million, including
(euro) 1.8 million of die sorting systems' backlog that was acquired as part of
our purchase of Laurier, an increase of 98.9% compared to (euro) 44.8 million in
2001. The book-to-bill ratio for 2002 was 1.07 compared to 0.30 for 2001.

    GROSS PROFIT

    Gross profit decreased by 49.1% from (euro) 53.8 million in 2001 to (euro)
27.4 million in 2002. As a percentage of net sales, gross profit decreased from
35.8% in 2001 to 32.9% in 2002, due to the significant decrease in net sales in
2002 which was only partially offset by reduced production and overhead costs.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    Our selling, general and administrative expenses in 2001 totaled (euro) 30.6
million and represented 20.4% of net sales compared to (euro) 26.2 million or
31.5% of net sales in 2002. The decrease in selling, general and administrative
expenses was mainly due to a decrease in net sales and our restructuring
efforts. The increase in selling, general and administrative expenses as a
percentage of net sales resulted primarily from the significant decrease in net
sales.

    RESEARCH AND DEVELOPMENT EXPENSES

    Our research and development expenses decreased from (euro) 15.4 million in
2001 to (euro) 12.5 million in 2002. As a percentage of net sales, research and
development expenses were 10.3% and 15.0%, respectively. Research and
development spending in 2002 was mainly related to integrated assembly line
functionality and chip scale ball grid array packaging applications. The
increase in research and development spending as a percentage of net sales in
2002 reflects our continued investment in research and development despite the
current market downturn.

    OPERATING LOSS

    Operating loss increased from (euro) 4.4 million in 2001 to (euro) 18.0
million in 2002. Operating loss for 2002 included non-cash goodwill impairment
of (euro) 3.3 million. Furthermore, operating loss for 2001 and 2002 included
restructuring charges of (euro) 8.3 and (euro) 0.8 million, respectively.
Operating loss also increased due to lower net sales, lower gross margins,
partially offset by a decrease in selling, general and administrative expenses
and research and development spending.

    We incurred annual patent and other identifiable assets amortization charges
of (euro) 2.6 million in 2002, which related to the acquisitions of our Fico,
Meco, RDA and Laurier subsidiaries in October 1993, May 1995, September 2000 and
January 2002, respectively.

    INTEREST INCOME, NET

    Our interest income, net decreased from (euro) 4.2 million in 2001 to (euro)
3.4 million in 2002, due to lower interest rates and lower cash balances.

    INCOME TAXES

    Our income tax expense was (euro) 0.5 million in 2001 as compared to (euro)
2.4 million in 2002. The effective tax rate was not meaningful in 2001 as we
recorded income tax expense in spite of loss before taxes and equity in earnings
(loss) of affiliated companies and minority interest. In the fourth quarter of
fiscal year 2002, as part of the income tax provision for the period, we
recorded a charge of (euro) 6.0 million through the establishment of a valuation
allowance against our deferred tax asset consisting primarily of US net
operating loss carry forwards and temporary differences. We determined that the
valuation allowance was required based on our recent losses, which are given
substantially more weight than forecasts of future profitability. Until we
utilize these US operating loss carry forwards, our income tax provision will
reflect mainly domestic taxation.

    EQUITY IN LOSS OF AFFILIATED COMPANIES

    Equity in loss of affiliated companies and loss on sale of affiliated
companies amounted to a loss of (euro) 16.3 million for 2001. On November 15,
2001, we sold our 30% equity interest in PBE to Possehl.

    NET LOSS

    Our net loss amounted to (euro) 17.0 million for both 2001 and 2002. Net
loss for 2001 was negatively impacted by charges of (euro) 16.3 million incurred
by PBE in 2001 related both to operations and a loss on the sale of our
investment and after tax restructuring charges in 2001 of (euro) 5.5 million
related to our equipment operations. Net loss for 2002 was negatively impacted
by (i) goodwill impairment of (euro) 3.3 million, (ii) a non-cash valuation
allowance of (euro) 6.0 million against our net deferred tax assets and (iii)
after tax restructuring charges in 2002 of (euro) 0.6 million related to our die
handling operations. However, net loss excluding those charges for 2002 as
compared to 2001 was negatively impacted by significantly decreased net sales
and gross margins related to adverse market conditions, partially offset by
reduced costs and expenses as a result of our restructuring efforts.

    LIQUIDITY AND CAPITAL RESOURCES

    We had (euro) 119.9 million and (euro) 108.9 million in cash and cash
equivalents at December 31, 2002 and December 31, 2003, respectively.

                                       27
<PAGE>

    We finance Meco and, to an extent, Fico, on a stand-alone basis. Meco
utilizes funds generated from its results of operations to finance its working
capital and capital expenditure requirements. Meco and Fico maintain lines of
credit with various local commercial banks. The credit lines of Meco and Fico
are unsecured. The principal restrictive covenant in each line is related to
solvency ratios, which generally are based on a ratio of each subsidiary's
equity to its assets. Currently, our Besi Die Handling subsidiary and, to an
extent Fico, are financed through intercompany loans. Our 87% joint venture Fico
Tooling Leshan Company Ltd. in China is partly financed by a long-term loan,
issued by a local bank.

    The working capital requirements of our subsidiaries are affected by the
receipt of periodic payments on orders from their customers. Although Fico and
Besi Die Handling generally receive partial payments for molding systems, trim
and form integration systems and die handling systems prior to final
installation, initial payments generally do not cover a significant portion of
the costs incurred in the manufacturing of such systems. Meco generally receives
a higher initial payment upon receipt of orders than Fico and Besi Die Handling.

    Net cash (used in) provided by operating activities were ((euro) 4.2)
million and (euro) 5.3 million in 2002 and 2003, respectively. The primary
changes of cash from operations in 2003 were a net loss of (euro) 13.5 million
that included non-cash charges of (euro) 6.8 million for depreciation,
amortization and impairment of intangibles and (euro) 1.7 million for other
non-cash losses, combined with decreased working capital requirements of (euro)
10.3 million.

    At December 31, 2003, our cash balance totaled (euro) 108.9 million and our
total debt and capital lease obligations totaled (euro) 8.9 million. At December
31, 2003, shareholders' equity stood at (euro) 183.5 million.

    Our capital expenditures increased from (euro) 4.9 million in 2002 to (euro)
11.9 million in 2003. The expenditures in 2003 were incurred primarily for (i)
the construction of an 80,000 square foot facility in Duiven, the Netherlands
for molding systems and tooling manufacturing and (ii) the establishment of our
first manufacturing facility in mainland China for the production of tools. We
expect capital expenditures in 2004 to decrease to approximately (euro) 5.0
million due to the completion of these projects in 2003. Part of the capital
expenditures of (euro) 5.0 million will be utilized to further expand our
production capacity in China.

    At June 28, 2002, we sold the land and buildings of one of our subsidiaries
in a sale and lease back transaction for (euro) 6.5 million in cash. At the date
of the transaction, the cost of the land and buildings totaled (euro) 6.9
million and the net book value of the real estate sold by us was (euro) 5.4
million. Our gain on this transaction of (euro) 1.1 million will be amortized
and netted against rental expenses over the twelve and a half-year term of the
lease. Gross rental expenses total (euro) 0.6 million per annum. The total
deferred gain on the sale and lease back as of December 31, 2003 was (euro) 0.9
million.

    On June 17, 2002, we announced that we had adopted a plan to repurchase up
to 1,000,000 of our ordinary shares from time to time. As of December 31, 2003,
we had repurchased all 1,000,000 ordinary shares authorized under this
repurchase program at an average price of (euro) 5.22 per share.

    At December 31, 2003, we had available lines of credit amounting to (euro)
13.4 million, under which no borrowings were out standing. At December 31, 2003,
(euro) 0.1 million was reserved for guarantees and (euro) 0.5 million was
reserved for foreign exchange contracts under such lines. Interest is charged at
the bank's base lending rates plus an increment of 1.5%. The credit facility
agreements include covenants requiring us to maintain certain financial ratios.
We were in compliance with, or had received waivers for, all loan covenants at
December 31, 2003. We terminated two of our unused credit lines in the course of
2003, which reduced our available line of credit by (euro) 10.9 million as
compared to December 31, 2002.

    On February 6, 2004, we sold the land and buildings in Duiven, The
Netherlands in a conditional sale and lease back transaction for (euro) 14.9
million in cash. At the date of the transaction, the net book value of the real
estate sold was approximately equal to the selling price of the real estate. Any
gain on this transaction will be deferred and amortized and netted against
rental expenses over the term of the lease. Gross rental expenses will amount to
(euro) 1.3 million per annum. We granted the buyer a (euro) 3.0 million loan
which is payable over a maximum period of 24 months. The loan can be repaid at
any time during the term of the loan. The loan is secured by a second mortgage
on the land and buildings which were the subject of the sale and leaseback
transaction. The loan bears 8.75% interest.

    We believe that our cash position, internally generated funds and available
lines of credit will be adequate to meet our levels of capital spending,
research and development and working capital requirements for at least the next
twelve months.

    PRINCIPAL DIFFERENCES BETWEEN IFRS AND US GAAP

    Beginning in 2005, the European Commission will require companies that are
quoted on a European stock market to publish their financial statements in
accordance with IFRS. While we intend to continue publishing US GAAP financial
statements, we also will publish our Consolidated Financial Statements in
accordance with IFRS from January 1, 2005 onwards.

                                       28
<PAGE>

    We are currently investigating the possible impact of differences identified
between IFRS and US GAAP. The principal differences currently identified that
might affect our net profit or loss, as well as shareholders' equity, relate to
treatment of development costs, stock option plans, financial instruments and
goodwill and intangible assets.

    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

    In June 2001, the FASB issued SFAS No. 143, "Accounting for asset retirement
obligations". SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated retirement costs. It requires that we recognize the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred if a reasonable estimate of fair value can be made. We adopted SFAS No.
143 on January 1, 2003 and the adoption did not have a material impact on our
Consolidated Financial Statements.

    In August 2001, the FASB issued SFAS No. 144, "Accounting for the impairment
or disposal of long-lived assets". SFAS No. 144 establishes a single accounting
model for the impairment of long-lived assets and broadens the presentation of
discontinued operations to include more disposal transactions. We adopted SFAS
No. 144 effective January 1, 2002 and the adoption did not have a material
impact on our Consolidated Financial Statements.

    In April 2002, the FASB issued SFAS No. 145, "Recission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". In rescinding SFAS No. 4 and 64, SFAS No. 145 eliminates the
requirement that gains and losses from the extinguishment of debt be aggregated
and, if material, classified as an extraordinary item, net of the related income
tax effect, however, an entity would not be prohibited from classifying such
gains and losses as extraordinary items so long as they meet the criteria of
paragraph 20 of APB 30, Reporting the results of operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. Further, the Statement amends
SFAS No. 13 to eliminate an inconsistency between the accounting for sale and
leaseback transactions and certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. The standard is
effective for transactions occurring after May 15, 2002. The adoption of SFAS
No. 145 did not have a material impact on our Consolidated Financial Statements.

    In June 2002, the FASB issued SFAS No. 146, "Accounting for Exit or Disposal
Activities", which addresses significant issues regarding the recognition,
measurement, and reporting of costs that are associated with exit and disposal
activities, including restructuring activities that are currently accounted for
pursuant to the guidance that the EITF has set forth in EITF 94-3 "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". The standard is
effective for exit or disposal activities that are initiated after December 31,
2002. We adopted SFAS No. 146 on January 1, 2003 and the adoption did not have a
material impact on our Consolidated Financial Statements.

    In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (hereinafter "the Interpretation"), which
addresses, among other things, the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees.
The Interpretation also requires the recognition of a liability by a guarantor
at the inception of certain guarantees. The Interpretation requires the
guarantor to recognize a liability for the non-contingent component of the
guarantee, this is the obligation to stand ready to perform in the event that
specified triggering events or conditions occur. The initial measurement of this
liability is the fair value of the guarantee at inception. The recognition of
the liability is required even if it is not probable that payments will be
required under the guarantee or if the guarantee was issued with a premium
payment or as part of a transaction with multiple elements. We adopted the
disclosure requirements of the Interpretation as at December 31, 2002 and have
applied the recognition and measurement provisions for all guarantees entered
into or modified after December 31, 2002.

    In November 2002, the EITF issued its consensus on EITF 00-21, "Revenue
Arrangements with Multiple Deliverables" on an approach to determine whether an
entity should divide an arrangement with multiple deliverables into separate
units of accounting. According to the EITF in an arrangement with multiple
deliverables, the delivered item(s) should be considered a separate unit of
accounting if all of the following criteria are met: (i) the delivered item(s)
has value to the customer on a standalone basis, (ii) there is objective and
reliable evidence of the fair value of the undelivered item(s), (iii) if the
arrangement includes a general right of return, delivery or performance of the
undelivered item(s) is considered probable and substantially in the control of
the vendor. If all the conditions above are met and there is objective and
reliable evidence of fair value for all units of accounting in an arrangement,
the arrangement consideration should be allocated to the separate units of
accounting based on their relative fair values. However, there may be cases in
which there is objective and reliable evidence of the fair value(s) of the
undelivered item(s) in an arrangement but no such evidence for one or more of
the delivered items. In those cases, the residual method should be used to
allocate the arrangement consideration. The guidance in this Issue is effective
for revenue arrangements entered into in fiscal years beginning after June 15,
2003. Alternatively, entities may elect to report the change in accounting as a
cumulative effect adjustment in accordance with APB Opinion 20, "Accounting
Changes". If so elected, disclosure should be made in periods subsequent to the
date of initial application of this consensus of the amount of recognized
revenue that was previously included in the cumulative effect adjustment. The
adoption of EITF 00-21 did not have a material impact on our Consolidated
Financial Statements.

                                       29
<PAGE>

    In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure - an amendment of FASB statement No.
123". SFAS No. 148 permits two additional transition methods for entities that
adopt the fair value based method of accounting for stock-based employee
compensation. The statement also requires new disclosures about the ramp-up
effect of stock-based employee compensation on reported results. The statement
also requires that those effects be disclosed more prominently by specifying the
form, content, and location of those disclosures. The transition guidance and
annual disclosure provisions of SFAS No. 148 are effective for fiscal years
ending after December 15, 2002, with earlier application permitted in certain
circumstances. The interim disclosure provisions are effective for financial
reports, containing financial statements for interim periods beginning after
December 15, 2002. We adopted the annual disclosure requirements of SFAS No.148
and such disclosure is reflected in the Consolidated Financial Statements for
the year ended December 31, 2003.

    In January 2003, the FASB released FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities" (FIN 46). This Interpretation
changes the method of determining whether certain entities, including
securitization entities, should be included in a company's consolidated
financial statements. An entity is subject to FIN 46 and is called a Variable
Interest Entity, or VIE, if it has (i) equity that is insufficient to permit the
entity to finance its activities without additional subordinated financial
support from other parties, or (ii) equity investors that cannot make
significant decisions about the entity's operations, or that do not absorb the
expected losses or receive the expected returns of the entity. All other
entities are evaluated for consolidation in accordance with SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries". A VIE is consolidated by its
primary beneficiary, which is the party involved with the VIE that has a
majority of the expected losses or a majority of the expected residual returns
or both. A VIE includes entities that previously were referred to as Special
Purpose Entities. Or SPEs. The provisions of the interpretation are to be
applied immediately to VIEs created after January 31, 2003, and to VIEs in which
an enterprise obtains an interest after that date. For VIEs in which an
enterprise holds a variable interest that it acquired before February 1, 2003,
FIN 46 applies in the first interim or fiscal period beginning after December
15, 2003. For any VIE that must be consolidated under FIN 46 that were created
before February 1, 2003, the assets, liabilities and non-controlling interest of
the VIE would be initially measured at their carrying amounts with any
difference between the net amount added to the balance sheet and any previously
recognized interest being recognized as the cumulative effect of an accounting
change. If determining the carrying amounts is not practicable, fair value at
the date FIN 46 first applies may be used to measure the assets, liabilities and
non-controlling interest of the VIE. FIN 46 also mandates new disclosures about
VIEs, some of which are required to be presented in financial statements issued
after January 31, 2003. We are continuing to evaluate the provisions of FIN 46.
While we do not believe that we have any VIEs that would be required to be
consolidated, management is nonetheless evaluating the provisions of FIN 46.

    On April 30, 2003, the FASB issued FASB Statement No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities", which amends
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", to
address (i) decisions reached by the Derivatives Implementation Group, (ii)
developments in other Board projects that address financial instruments, and
(iii) implementation issues related to the definition of a derivative. SFAS No.
149 is generally effective for contracts entered into or modified after June 30,
2003 and for hedging relationships designated after June 30, 2003. The adoption
of SFAS No. 149 did not have a material impact on our Consolidated Financial
Statements.

    On May 15, 2003, the FASB issued FASB Statement No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity". SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classifies a financial instrument that is
within its scope as a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003, except for mandatorily redeemable financial
instruments of non-public entities. It is to be implemented by reporting the
cumulative effect of a change in an accounting principle for financial
instruments created before the issuance date of the Statement and still existing
at the beginning of the interim period of adoption. Restatement is not
permitted. For non-public entities, mandatorily redeemable financial instruments
are subject to the provisions of SFAS No. 150 for the first fiscal period
beginning after December 15, 2003. The adoption of SFAS No. 150 did not have a
material impact on our Consolidated Financial Statements.

ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

    Responsibility for our management lies with our Board of Management. The
Supervisory Board supervises the policy of the Board of Management and the
general course of corporate affairs. The Board of Management must keep the
Supervisory Board informed, consult with the Supervisory Board on important
matters and submit some important decisions to the Supervisory Board for its
prior approval. The members of the Board of Management are appointed, suspended
and dismissed by the Supervisory Board.

    Due to the structuurregime, the special statutory regime for large
Netherlands companies, the members of the Supervisory Board may appoint
themselves and the members of the Board of Management are appointed, suspended
and dismissed by the

                                       30
<PAGE>

Supervisory Board. Members of the Supervisory Board generally serve for a term
of four years from the date of their appointment and may be reappointed.

    The members of our Supervisory Board as of April 30, 2004 are as follows:

<TABLE>
<CAPTION>

             NAME                   AGE                 TITLE                             TERM ENDS
--------------------------------    ---    ---------------------------------              ---------
<S>                                 <C>    <C>                                            <C>
Willem D. Maris.................    64     Chairman of the Supervisory Board                 2004
Evert B. Polak..................    59     Member of the Supervisory Board                   2005
Dick Sinninghe Damste...........    64     Member of the Supervisory Board                   2005
Tom de Waard....................    57     Member of the Supervisory Board                   2004
</TABLE>

    Mr. Maris became a member of our Supervisory Board in May 2001 and has
served as Chairman since June 2001. From 1990 to January 2001, Mr. Maris served
as President and CEO of ASM Lithography N.V., the Netherlands, a semiconductor
equipment manufacturer. From 1979 onwards Mr. Maris was active in the IC
division of Philips Electronics N.V. Mr. Maris also serves as a member of the
Supervisory Board of Vanderlande Transport Mechanismen B.V. Furthermore, Mr.
Maris serves as a member of the Board of Directors of Photronics Inc. and FSI
International Inc.

    Mr. Polak became a member of our Supervisory Board in November 2001. From
1984 to 2001, Mr. Polak served in various capacities with ASM Lithography N.V.,
the Netherlands. From 1969 to 1984, Mr. Polak served in various capacities with
Philips. Mr Polak serves as Chairman of the Supervisory Board of PSV Stadium
B.V.

    Mr. Sinninghe Damste became a member of our Supervisory Board in November
2001. From 1988 to his retirement in 2001, Mr. Sinninghe Damste served as a
member of the Board of Management of Hollandsche Beton Groep N.V., a
construction and property development firm. From 1968 to 1988, Mr. Sinninghe
Damste served in various capacities with Royal Dutch/Shell Group of Companies.
Mr. Sinninghe Damste also serves as Chairman of the Supervisory Board of Holland
Institute of Traffic Technology N.V. and as a member of the Supervisory Boards
of Vedior N.V. and NKI \ AvL.

    Mr. De Waard became a member of our Supervisory Board in November 2001.
Since 2001, Mr. De Waard has been a partner of Clifford Chance Limited Liability
Partnership, a law firm. Previously, Mr. De Waard was a partner of the Stibbe
law firm. Mr. De Waard also serves as a member of the Supervisory Board of
STMicroelectrics N.V.

    The members of our Board of Management and the other key members of
management as of april 30, 2004 are as follows:

<TABLE>
<CAPTION>
                        NAME                            AGE                            TITLE
-------------------------------------------------       ---     ---------------------------------------------------
<S>                                                     <C>     <C>
Richard W. Blickman..............................        50     President and Chief Executive Officer, Chairman of
                                                                the BE Semiconductor Industries Management Board
Teun A.H. Wartenbergh............................        46     Chief Operating Officer, Executive Member
Hans A. Wunderl..................................        52     Managing Director of Besi Die Handling, appointed
                                                                as Executive Member as of March 25, 2004

Hugo Menschaar...................................        57     Director of Corporate Technology
Cor te Hennepe...................................        45     Director of Finance
Guustaaf P.W. Savenije...........................        46     Chief Technology Officer

Jaap H.M. Beijersbergen..........................        40     Director Sales
Willy Enzing.....................................        44     Managing Director of Fico Trim and Form Integration
                                                                Systems

Robert J. Foppen.................................        56     Worldwide Sales and Marketing Manager of Besi
                                                                Plating

Paul A. Govaert..................................        48     Managing Director of Tooling
Frans J.M. Jonckheere............................        45     Managing Director of Besi Plating
Gerard A. in `t Veld.............................        47     Managing Director of Besi Singulation
</TABLE>

    Mr. Blickman is our President and Chief Executive Officer and Chairman of
our Management Board, positions he has held since November 1995. He also is
Managing Director of our Fico subsidiary, a position he has held since February
1991 and Managing Director of our Meco subsidiary, a position he has held since
January 1997. Mr. Blickman was also a Managing Director and a Management Board
member of our PBE joint venture. Previously, Mr. Blickman held the position of
Worldwide Sales Manager of Fico from September 1989 to February 1991. Prior to
joining Fico, he served as the European Marketing and Sales Manager for Advanced
Semiconductor Materials International N.V.

    Mr. Wartenbergh has served as our Chief Operating Officer since April 2002.
Since January 2002, Mr. Wartenbergh has served as General Manager of Fico. From
1999 to 2002, Mr. Wartenbergh served as General Manager for Philips CCP. From
1997 to 1999, Mr. Wartenbergh served as Plant Manager of KMT B.V. and from 1983
to 1997, Mr. Wartenbergh served in various

                                       31
<PAGE>

capacities for Philips CCP.

Mr. Wunderl has served as our Managing Director of Besi Die Handling Inc. since
January 5, 2004 and has been appointed as Executive Member on March 25, 2004.
From 2002 to 2004 Mr Wunderl worked at Esec Switzerland and from 1990 to 2002
Mr. Wunderl held various positions at ASMI

    Mr. Menschaar is Director Corporate Technology, a position he has held since
January 2000. Mr. Menschaar served as Strategic Business Development for Fico
and Meco. Prior to joining BESI, Mr. Menschaar served as Managing Director for
AFAM BV and as Managing Director for Advanced Production Automation and as Chief
Development for Patent Machinebouw.

    Mr. te Hennepe has served as our Director of Finance since March 1, 2003.
From 2000 until February 2003 Mr. te Hennepe served as Manager Finance of
Possehl Besi Electronics N.V. Prior to joining Possehl Besi Electronics N.V.,
Mr. te Hennepe served as Manager Finance/Controller for Yokogawa, GTI, HCS, ABB
and ASM International in the Netherlands.

    Mr. Savenije has served as our Chief Technology Officer since October 1,
2003. From 1996 to 2003, Mr Savenije served as project leader and product
development manager as ASM Lithography N.V. From 1982 to 1996 Mr. Savenije held
various positions at Philips.

    Mr. Beijersbergen is Director Sales since August 2003. Prior to joining
Besi, Mr. Beijersbergen served as Senior Product Manager at BCcomponents
Electrolytic Capacitors starting in 2000. From 1995 until 2000, he served as
Technical Marketing Director and Product Manager at ASM.

    Mr. Enzing has served as Managing Director of Fico Trim and Form Integration
Systems since September 2002. Prior to joining Fico, Mr. Enzing served as Sector
Director at Atos Orgin starting in 1998 and as Account Manager starting in 1995.
Prior to that time, Mr. Enzing was Associate Consultant in McKinsey & Company
for 3 years and he held various positions at ASM.

    Mr. Foppen is Worldwide Sales and Marketing Manager of Meco Plating Systems
and Chemicals and serves as the Director of Sales and Marketing, a position he
has held since 1985. From 1973 to 1985, Mr. Foppen served as the Sales Manager
for the United Kingdom and Benelux Countries for Cetema B.V.

    Mr. Govaert is Managing Director of our tooling operations, a position he
has held since May 1, 2000. Prior to joining our Fico subsidiary, Mr. Govaert
served at Berkhof Herenven B.V. as General Manager from 1998 to 1999 and at WBM
Stadservis Centrum B.V. from 1987 to 1998 as general manager.

    Mr. Jonckheere is Managing Director of our Besi plating activities since
October 1, 2003. Formerly, Mr. Jonckheere served as Director of Operations of
Meco Plating Systems and Chemicals, a position he has held since January 1997.
From 1986 until joining Besi, Mr. Jonckheere served in various positions at
Holec Machines and Apparaten B.V.

    Mr. in 't Veld has served as our Managing Director of Besi Singulation since
November 1, 2003. Prior to joining Besi, Mr. in 't Veld served as Managing
Director of Multin Technology Group from 2000 to 2003. From 1982 to 2000, Mr. in
't Veld held various positions at Delft Instruments.

B. COMPENSATION OF DIRECTORS AND OFFICERS

Aggregate cash compensation paid or accrued by the Company for its management
including members of the Board of Management of the Company was (euro) 1,977 in
2001, (euro) 1,719 in 2002 and (euro) 1,561 in 2003. Amounts accrued to provide
pension, retirement or similar benefits to these individuals, as a group, were
(euro) 187 in 2001, (euro) 220 in 2002 and (euro) 217 in 2003.

The cash compensation of the individual executive members of the Management
Board for the year ended December 31, 2002 and 2003 was as follows:

<TABLE>
<CAPTION>
                                                  Year ended December 31, 2002            Year ended December 31, 2003
           (in euros)                   Salaries      Bonus (3)        Pension       Salaries      Bonus (3)        Pension
           ----------                   -----------------------------------------------------------------------------------
<S>                                     <C>           <C>              <C>           <C>           <C>              <C>
R.W. Blickman...................        297,684              -         54,326        298,210              -         54,326
J. W. Rischke (1)...............        137,948              -         32,367              -              -              -
M.A.H. Wartenbergh (2)..........              -              -              -        114,480              -         14,329
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Executive member of the Management Board until October 23, 2002;
     remuneration relates to the period until October 23, 2002.

(2)  Executive member of the Management Board as from March 27, 2003;
     remuneration relates to the period as from March 27, 2003 to December 31,
     2003.

                                       32
<PAGE>

(3) Bonus is included in the year to which it relates.

The total remuneration of the individual members of the Supervisory Board
members for the year ended December 31, 2002 and 2003 was as follows:

<TABLE>
<CAPTION>
                                   Year ended December 31,
          (In euros)               2002             2003
          ----------              ------------------------
<S>                               <C>              <C>
W. D. Maris...................    15,882           15,882
E. B. Polak...................    15,882           15,882
D. Sinninghe Damste...........    15,882           15,882
T. de Waard...................    15,882           15,882
                                  -----------------------
</TABLE>

In 2002 and 2003, part of the cash compensation to the Supervisory Board members
has been replaced by the acceptance of granting of options by three Supervisory
Board members. The fair value of the option awards to the Supervisory Board
members was estimated using the Black-Scholes option-pricing model. Total
remuneration did not change compared to the remuneration approved by the General
Meeting of Shareholders.

    A portion of the compensation of our executive officers is performance
related.

C. BOARD PRACTICES

BOARD PRACTICES

We acknowledge the importance of good corporate governance, including elements
such as transparency, independence and accountability. We continuously review
corporate governance developments in the jurisdictions in which we operate.

We pursue a policy of active communication with our shareholders through the
active participation of our Shareholders at the general meeting and the
publication of our annual and quarterly results. Our corporate governance
structure is intended to:

     -    provide shareholders with regular, reliable and relevant transparent
          information regarding our activities, structure, financial condition,
          performance and other information, including information on our
          social, ethical and environmental records and policies;

     -    apply high quality standards for disclosure, accounting and auditing;
          and

     -    apply stringent rules with regard to insider securities trading.

We have a two-tier board structure consisting of an Executive Management Board,
which consists of Mr. R.W. Blickman, Mr. M.A.H. Wartenbergh and J.A. Wunderl and
a separate board supervising management known as the Supervisory Board, which
consists of Mr. W. D. Maris, Mr. T. deWaard, Mr. D. Sinninghe Damste and Mr. E.
B. Polak. The Supervisory Board is composed of four independent, non-executive
members. Under our memorandum and articles of association, one Supervisory Board
member will retire every year. Following this schedule, Mr. W. D. Maris,
Chairman of the Supervisory Board and Mr. T. de Waard will retire by rotation in
2004. Each of Messrs. Maris and de Waard have indicated to the Supervisory Board
that they are available for reappointment: Mr. W.D. Maris has been re-appointed
for two years and Mr. T. de Waard has been reappointed for three years.
Furthermore Mr. D. Sinninghe Damste and Mr. E. B. Polak will retire by rotation
in 2005.

The Supervisory Board has adopted corporate governance guidelines to assist the
Supervisory Board in the exercise of its duties and responsibilities and to
serve our best interests and the best interests of our shareholders. These
guidelines, which provide a framework for the conduct of the Board's business,
include that:

     -    the principal responsibility of the Supervisory Board is to oversee
          the management of the Company;

     -    the members meet regularly in executive session;

     -    members have full and free access to management and, as necessary and
          appropriate, independent advisors; and

     -    at least annually the Board and its committees will conduct a
          self-evaluation to determine whether they are functioning effectively.

The Supervisory Board met nine times during 2003. Special attention was paid to
recent developments related to corporate governance, especially changes stemming
from the passage and enactment of the Sarbanes-Oxley Act of 2002 in the United
States and the developments regarding the Tabaksblat corporate governance code
in The Netherlands.

Topics of the meetings included, among other items:

-    our general strategy;

-    our financial performance;

-    approval of all periodic filings with the United States Securities and
     Exchange Commission and Euronext Amsterdam;

                                       33
<PAGE>

-    the performance and internal division of tasks of the Board of Management;

-    potential strategic alliances and acquisitions;

-    the general risks associated with our operations;

-    the Supervisory Board's own performance; and

-    the approval of the Besi Code of Business Conduct and Ethics.

Frequent contact took place between the Chairman of the Supervisory Board and
our management.

Members of the Board of Management are appointed by the Supervisory Board and
serve until voluntary retirement, or suspension or dismissal by the Supervisory
Board. If a member of the Board of Management is to be dismissed, the General
Meeting of Shareholders must be consulted on the intended dismissal.

The Supervisory Board has established two committees, the Audit Committee and
the Remuneration Committee. The Remuneration Committee and Audit Committee
operate under a charter that has been approved by the Supervisory Board. Members
of these committees are appointed from and among the Supervisory Board members.

Members of the Board of Management and Supervisory Board, as well certain senior
management members, are insured under the Besi's Directors and Officers
Insurance Policy. Although the insurance policy provides for a wide coverage,
our directors and officers may occur additional uninsured liabilities. Besi has
agreed to indemnify its Board of Management and Supervisory Board against any
claims arising in connection with their position as director and officer of the
Company, provided that such claim is not attributable to willful misconduct or
intentional recklessness.

CORPORATE GOVERNANCE DEVELOPMENTS

   The Company acknowledges the importance of good corporate governance.

We have followed and implemented rules promulgated by the United States
Securities and Exchange Commission, implementing the provisions of the
Sarbanes-Oxley Act of 2002, and rules promulgated by the NASDAQ Stock Market
Inc. implementing the listing requirements of the NASDAQ National Market.

In 2003, our Supervisory Board adopted Audit Committee Policies and Practices
regarding the following:

     -    "Hiring employees and former employees of the Company's independent
          Auditor". This policy prohibits certain key members of our auditors
          from assuming a senior finance position;

     -    "Raising and investigating complaints or concerns about accounting or
          auditing matters". This policy establishes procedures for the receipt,
          retention and treatment of complaints we receive regarding accounting,
          internal accounting controls or auditing matters; and

     -    "Approving non-audit fees". This policy requires Audit Committee
          pre-approval of all non-audit services to be performed by our
          auditors.

   In the Netherlands the Tabaksblat Committee finalized its corporate
governance code. The code is based on the "apply or disclose" principle. The
Company prepared a proposal for the Besi corporate governance code (the "Besi
Code") based on the principles and best practice rules of the Tabaksblat code.
The Besi Code follows all principles of the Tabaksblat code.. The Board of
Management and the Supervisory Board consider it important that the shareholders
of the Company approve the contents of the Besi Code. The proposal was approved
at the Annual General Shareholders Meeting on March 25, 2004.

AUDIT COMMITTEE

    In view of the limited number of members of the Supervisory Board, the
Supervisory Board acts as the Audit Committee. The Audit Committee therefore has
four independent members. The Audit Committee's responsibilities include:

     -    appointing, approving the compensation of, and assessing the
          independence of the our independent auditor;

     -    overseeing the work of our independent auditor, including through the
          receipt and consideration of certain reports from the independent
          auditor;

     -    reviewing and discussing with management and the independent auditors
          our annual and quarterly financial statements and related disclosures;

     -    monitoring our internal control over financial reporting, disclosure
          controls and procedures and code of business conduct and ethics;

     -    overseeing our internal audit function;

     -    discussing our risk management policies;

     -    establishing policies regarding hiring employees from the independent
          auditor and procedures for the receipt and retention of accounting
          related complaints and concerns; and

     -    meeting independently with our independent auditors and management.

                                       34
<PAGE>

    In 2003, the Audit Committee met nine times to discuss the scope and results
of audits and reviews of our external auditor, KPMG, to review our internal
accounting control policies and procedures, and to review all periodic filings
with the SEC and Euronext Amsterdam. Our external auditor, KPMG, attended all
meetings. Furthermore, the Audit Committee separately met with the auditor
outside the presence of management. Frequent contact took place between the
chairman of the Audit Committee and our management. During 2003, the Audit
Committee focused on identifying our critical accounting policies, new
accounting pronouncements and the developments of IFRS and the convergence
between IFRS and US GAAP.

    The Audit Committee closely followed the adoption of the Sarbanes-Oxley Act
and the development of the rules promulgated by the United States Securities and
Exchange Commission, implementing the provisions of the Sarbanes-Oxley Act, and
rules promulgated by the NASDAQ Stock Market Inc. amending the listing
requirements of the NASDAQ National Market.

    In anticipation of the passage of the Sarbanes-Oxley Act and the
implementation of the new rules, the Audit Committee reviewed and analyzed the
provision of our audit services. This procedure has been completed, and the
Supervisory Board has proposed that KPMG be appointed as our auditor for the
fiscal year ending December 31, 2003. This proposal was approved by the
shareholders at the Annual General Shareholders Meeting held on March 27, 2003.

    In 2003, the Audit Committee evaluated the performance of KPMG and advised
the Supervisory Board to propose that KPMG be appointed as the Company's auditor
for the fiscal year ending December 31, 2004. This proposal was presented to and
approved, by our shareholders at the Annual General Shareholders Meeting held on
March 25, 2004.

     The Supervisory Board has determined that Mr. D. Sinninghe Damste qualifies
as an Audit Committee Financial Expert. Furthermore, the Supervisory Board
determined that all members of the Supervisory Board are financial literate.

REMUNERATION COMMITTEE

Besi has a Remuneration Committee which has responsibility for :

     -    annually reviewing and approving the corporate goals and objectives
          relevant to the compensation of senior management;

     -    overseeing and administering our equity incentive plans;

     -    overseeing and making recommendations to the Supervisory Board with
          respect to director compensation; and

     -    determining the compensation of the chief executive officer and
          reviewing and approving, or make recommendations to the Supervisory
          Board, with respect to the compensation of our other executive
          officers.

The Remuneration Committee consists of Mr. W.D. Maris, chairman of the
Remuneration Committee, and Mr. T. de Waard. The Remuneration Committee met once
in 2003.

DISCLOSURE COMMITTEE

Besi has a Disclosure Committee to ensure compliance with applicable disclosure
requirements arising under United States and Dutch law. The Disclosure Committee
reports to and assists our chief executive officer in the maintenance and
evaluation of disclosure controls and procedures. The Audit Committee is kept
informed about the outcome of the Disclosure Committee meetings. The Disclosure
Committee gathers all relevant financial and non-financial information and
assesses materiality, timeliness and necessity for disclosure of such
information. The Disclosure Committee comprises various members of senior
management. Furthermore, members of the Disclosure Committee are in close
contact with our external legal counsel and our external auditor.

During the year 2003, the Disclosure Committee met once in 2003.

EXEMPTIONS FROM CERTAIN NASDAQ CORPORATE GOVERNANCE RULES

The Nasdaq corporate governance rules provide that Nasdaq may provide exemptions
from the Nasdaq corporate governance standards to a foreign issuer when (i)
those standards are contrary to a law, rule or regulation of any public
authority exercising jurisdiction over such issuer or (ii) contrary to generally
accepted business practices in the issuer's country of domicile. BESI has
received from Nasdaq exemptions from the following rules:

     -    Besi is exempt from Nasdaq's quorum requirements applicable to
          meetings of ordinary shareholders. In keeping with Netherlands law and
          Netherlands generally accepted business practice, Besi's Articles of
          Association provide that there are no quorum requirements generally
          applicable to General Meetings of Shareholders.

                                       35
<PAGE>

     -    Besi is exempt from Nasdaq's requirements regarding the solicitation
          of proxies and provision of proxy statements for meetings of
          shareholders. We do not solicit proxies or prepare proxy statements
          for General Meetings of Shareholders. Netherlands law does not have a
          regulatory regime for the solicitation of proxies and the solicitation
          of proxies is not a generally accepted business practice in The
          Netherlands.

D. EMPLOYEES

    The following table indicates the end of year composition of our workforce
during the financial years ended:

<TABLE>
<CAPTION>
                                             2001       2002      2003
                                             ----       ----      ----
<S>                                          <C>        <C>       <C>
The Netherlands.....................          545        460       464
Americas............................           45         65        49
Asia/Pacific........................          156        117       233
                                              ------------------------
TOTAL...............................          746        642       746
</TABLE>

<TABLE>
<CAPTION>
                                             2001       2002      2003
                                             ----       ----      ----
<S>                                          <C>        <C>       <C>
Sales & Marketing...................          133        120       114
Manufacturing.......................          475        371       459
Research & Development..............           66         78        90
General & Administrative............           72         73        83
                                              ------------------------
TOTAL...............................          746        642       746
</TABLE>

    As of December 31, 2003, we had approximately 746 employees, of whom 449
were employed at Fico, 131 at Meco, 42 at Besi Die Handling, 115 at Fico Tooling
Leshan, China and 9 at BE Semiconductor Industries. Of such total, 114 employees
were employed in sales and marketing, 459 in manufacturing, 90 in research and
development and engineering and 83 in administration. In addition, we employed
46 temporary contract employees, principally in product development and
engineering activities in the Netherlands. Approximately 98% of our employees in
the Netherlands are covered by nationwide collective bargaining agreements. We
have never experienced a work stoppage and believe that our employee relations
are good. We believe that we have been able to build strong relationships with
our employees, as reflected by our historically low rate of voluntary employee
turnover.

    Pursuant to the requirements of Dutch law, Fico and Meco each have an
employee Works Council with which management is required to have periodic
consultative meetings. The Works Council has the right to be informed by and/or
to advise management on specific matters in accordance with the Netherlands
Works Council Act. In addition, the Works Council Act provides that various
decisions with respect to employment conditions of general application require
the Works Council's consent.

    OPTION PLAN(s)

    In 1995, we established the BE Semiconductor Industries Incentive Plan 1995
(the "Incentive Plan 1995"). We granted 1,101,236 options on ordinary shares
("1995 Plan Shares") under the Incentive Plan 1995. During the years from 1995
to 2001, we made awards under the Incentive Plan 1995 to our executive officers
and senior employees. Options granted between 1999 and 2001 vest after three
years. The Incentive Plan 1995 expired in 2001. Stock options granted under the
Incentive Plan 1995 have exercise prices which were equal to the market price of
our ordinary shares on the date of grant.

    In 2001, we established the BE Semiconductor Industries Incentive plan 2001
- 2005 (the "Incentive Plan 2001"). The total number of ordinary shares ("2001
Plan Shares") that we may issue under the Incentive Plan 2001, may not exceed
1.5% of the total number of ordinary shares outstanding in the applicable fiscal
year, subject to adjustments for share splits, share dividends,
recapitalizations and similar events. 2001 Plan Shares may consist, in whole or
in part, of unauthorized and unissued ordinary shares or treasury shares. We
anticipate that we will, on an annual basis, make awards under the Incentive
Plan 2001 to our executive officers and senior employees. Options granted in
2002 and 2003 vest after three years. Stock options granted under the Incentive
Plan 2001 will have exercise prices equal to the market price of our ordinary
shares on the date of grant.

    In the years 2000 through 2003, we granted stock options to all of our
employees. The options vest after three years and have exercise prices equal to
our market price of our ordinary shares on the date of grant. These options
receive variable accounting treatment. All other options granted by us receive
fixed accounting treatment.

    We account for stock-based compensation using the intrinsic value method.
Accordingly, no compensation has been recorded for the stock options granted
during 2001, 2002 and 2003, which received fixed accounting treatment. For the
stock options granted in 2001, 2002 and 2003 that receive variable accounting
treatment, an amount of (euro) 26, net of tax, was recognized as compensation
cost based on the market value of our ordinary shares as of December 31, 2003.

    FINANCING OF STOCK OPTION PLANS

    Option plans that were issued in 1999 and 2000 were constructed with a
virtual financing arrangement whereby Besi financed

                                       36
<PAGE>

the fiscal value of the options granted to employees subject to the Dutch
tax-regime. The loans issued under this arrangement are repayable to Besi on the
exercised date of the respective option, provided that the option was actually
exercised. If the options expire unexercised, the respective loans are forgiven.
Besi accrues a liability for the respective fiscal implication of this
arrangement.

ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

    The following table shows the current beneficial ownership of our company's
share capital as of March 20, 2004 by: (1) the principal shareholders (each
person or entity who owns beneficially 5% or more of our shares) and (2) the
members of our Management Board and Supervisory Board as a group.

<TABLE>
<CAPTION>
                                                                                    SHARES BENEFICIALLY OWNED
                                                                                    -------------------------
                        NAME OF BENEFICIAL OWNER(1)                                   NUMBER       PERCENT
                        ---------------------------                                   ------       -------
<S>                                                                                 <C>            <C>
Fidelity Low Priced Stock Fund..............................................        3,096,700        10.1%
Schneider Capital Management LP.............................................        2,005,495         6.5%
Ad Capital AG...............................................................        1,654,080         5.4%
All Supervisory Board and Executive Management Board Members as a Group.....          488,985         1.6%
</TABLE>

--------------------
(1) Beneficial ownership is determined in accordance with the rules of the SEC,
    and generally includes voting power or investment power with respect to
    securities. Shares subject to options currently exercisable or exercisable
    within 60 days of the date hereof are deemed outstanding for computing the
    percentage beneficially owned by the person holding such options but are not
    deemed outstanding for computing the percentage beneficially owned by any
    other person. We believe that the persons named in this table, based on
    information provided by such persons, have sole voting and investment power
    with respect to the Shares indicated.

    In addition, in April 2000, we established the Stichting Continuiteit Besi,
whose board consists of five members, four of whom are independent of BE
Semiconductor Industries. We have granted the foundation a call option pursuant
to which it may purchase up to 55,000,000 of our preference shares.

    None of the members of our Supervisory Board or our Management Board owns,
directly or indirectly, more than one percent of our outstanding share capital.

    We are not directly or indirectly owned or controlled by any foreign
government.

ITEM 8: FINANCIAL INFORMATION

See "Item 18: Financial Statements" and pages F-1 through F-62.

DIVIDENDS

    We have never declared or paid any dividends and currently intend to retain
all available earnings generated by our operations for the development and
growth of our business. We do not currently anticipate paying any cash dividends
on our shares.

ITEM 9: THE OFFER AND LISTING

    Our ordinary shares are currently listed on the following exchanges:

<TABLE>
<CAPTION>
        LOCATION                 TRADING EXCHANGE                 SYMBOL
        --------                 ----------------                 ------
<S>                            <C>                                <C>
United States.............     Nasdaq National Market              BESI
The Netherlands...........     Amsterdam Stock Exchange            BESI
</TABLE>

    We have been informed by the Bank of New York, our transfer agent in the
United States, that there were 5,722,323 shares of New York registry held by 11
record holders as of December 31, 2003.

                                       37
<PAGE>

    The following table sets forth the high and low closing sale prices on
Nasdaq National Market, the Amsterdam Stock Exchange and the Frankfurt Stock
Exchange for our ordinary shares for our five most recent fiscal years.

<TABLE>
<CAPTION>
                                                         UNITED STATES       THE NETHERLANDS
                                                        ----------------     -----------------
                                                         HIGH       LOW       HIGH         LOW
                                                        ------     -----     ------        ---
<S>                                                     <C>        <C>     <C>           <C>
YEAR ENDED DECEMBER 31, 2004
   First Quarter..............................          $ 8.99     $ 6.95  (euro) 7.19   (euro) 5.55
YEAR ENDED DECEMBER 31, 2003
   First Quarter..............................          $ 4.65     $ 3.13  (euro) 4.48   (euro) 3.15
   Second Quarter.............................            6.31       3.33         5.30          3.18
   Third Quarter..............................            7.63       5.25         6.92          4.50
   Fourth Quarter.............................             8.5       5.85         6.72          5.10
YEAR ENDED DECEMBER 31, 2002
   First Quarter..............................          $ 9.70     $ 7.06  (euro)10.40   (euro) 8.14
   Second Quarter.............................            8.90       6.01         9.90          6.45
   Third Quarter..............................            6.64       4.02         6.65          4.23
   Fourth Quarter.............................            5.10       3.35         5.10          3.70
YEAR ENDED DECEMBER 31, 2001..................          $11.63     $ 4.40  (euro)12.50   (euro) 5.00
YEAR ENDED DECEMBER 31, 2000..................          $27.75     $ 7.28  (euro)28.45   (euro) 8.70
YEAR ENDED DECEMBER 31, 1999..................          $15.00     $ 5.88  (euro)14.70   (euro) 5.10
</TABLE>

----------

    The following table sets forth the high and low closing sale prices on
Nasdaq National Market and the Amsterdam Stock Exchange for our ordinary shares
for the six most recent months.

<TABLE>
<CAPTION>
                                                         UNITED STATES        THE NETHERLANDS
                                                        ----------------     -----------------
                                                         HIGH       LOW       HIGH         LOW
                                                        ------     -----     ------        ---
<S>                                                     <C>        <C>     <C>           <C>
April 2004.................................             $ 7.54     $ 6.94  (euro) 6.18   (euro) 5.87
March 2004.................................             $ 8.15     $ 6.95  (euro) 6.48   (euro) 5.55
February 2004..............................               8.70       7.90         6.85          6.40
January 2004...............................               8.99       8.22         7.19          6.52
December 2003..............................               8.50       7.10         6.72          5.91
November 2003..............................               7.48       6.18         6.32          5.38
</TABLE>

    On April 30, 2004, the closing sales price per share on the Nasdaq National
Market was $ 6.94 and the closing sales price per share on Amsterdam Stock
Exchange was (euro) 5.87.

ITEM 10: ADDITIONAL INFORMATION

ARTICLES OF ASSOCIATION

    The material provisions of our Articles of Association are summarized below.
Such summaries do not purport to be complete statements of these provisions and
are qualified in their entirety by reference to such exhibit. Our Articles of
Association were last amended on April 10, 2003 and provide for full application
of the large company regime (structuurregime), the special statutory regime for
large Netherlands companies. We have set forth the important characteristics of
this regime below.

    ORDINARY SHARES

    Our authorized share capital is currently divided into 55,000,000 ordinary
shares, nominal value (euro) 0.91 per ordinary share and 55,000,000 preference
shares, nominal value (euro) 0.91 per preference share. The ordinary shares may
be in bearer or registered form. The transfer of preference shares is restricted
by our Articles of Association to transferees which are approved by our Board of
Management.

    DIVIDENDS

    Dividends may be paid out of annual profits shown in our annual accounts,
which must be adopted by our Supervisory

                                       38
<PAGE>

Board and approved by our shareholders at the general meeting. At its
discretion, subject to statutory provisions, our Board of Management may, with
the prior approval of our Supervisory Board, distribute one or more interim
dividends on the ordinary shares before the annual accounts have been approved
by our shareholders. Our Board of Management, with the prior approval of the
Supervisory Board, may decide that all or part of our profits should be retained
and not be made available for distribution to our shareholders. Those profits
that are not retained shall be distributed to holders of ordinary shares
pursuant to a shareholder's resolution, subject to preferred returns payable
with respect to outstanding preference shares, if any, provided that the
distribution does not reduce shareholders' equity below the issued share capital
increased by the amount of reserves required by Netherlands law. Existing
reserves that are available for distribution under Netherlands law may be
distributed upon a shareholders resolution, proposed by the Board of Management,
which proposal is subject to the prior approval by the Supervisory Board. With
respect to cash payments, the rights to dividends and distributions shall lapse
if such dividends or distributions are not claimed within five years following
the day after the date on which they were made available.

    VOTING RIGHTS

    Appointment of members of the Supervisory Board and the Board of Management.
Our Supervisory Board appoints its own members. Non-binding recommendations for
appointment to the Supervisory Board may be made by our shareholders at the
general meeting, the Central Works Council and the Executive Board. In addition,
shareholders at the general meeting of shareholders and the Central Works
Council may object on grounds set forth by Netherlands law to a proposed
appointment by the Supervisory Board. Notwithstanding an objection by the
shareholders at the general meeting or the Central Works Council, an appointment
may be made as intended if the Enterprise Chamber of the Amsterdam Court of
Appeals (Ondernemingskamer), declares the objection to be unfounded.

    Our Articles of Association provide that a Supervisory Director shall resign
no later than the earlier of the first general meeting of shareholders after the
fourth anniversary of his or her appointment. Our Articles of Association also
provide that a Supervisory Director shall resign on the date on which the
general meeting of shareholders is held in the calendar year in which he or she
attains the age of 67. It is proposed that our Articles of Association be
amended to the effect that this age limit be deleted.

    Our Supervisory Board appoints members of our Board of Management. The
Supervisory Board must notify the shareholders of intended appointments to the
Board of Management.

    General Meetings of Shareholders. Our general meetings of shareholders are
held at least once a year, not later than six months after the end of the fiscal
year. Notices convening a general meeting will be mailed to holders of
registered shares at least 15 days before the general meeting and will be
published in national newspapers in the Netherlands and abroad in countries
where our bearer shares are admitted for official quotation. In order to attend,
to address and to vote at the general meeting of shareholders, the holders of
our registered shares must notify us in writing of their intention to attend the
meeting and holders of our bearer shares must deposit their bearer shares with a
depositary, as specified in the published notice. We currently do not solicit
from or nominate proxies for our shareholders and are exempt from the proxy
rules of the United States Exchange Act. However, shareholders and other persons
entitled to attend the general meetings of shareholders may be represented by
proxies with written authority. Our Articles of Association allow the Board of
Management to provide for a record date should we decide to provide for proxy
solicitation.

    Other general meetings of shareholders may be held as often as deemed
necessary by our Supervisory Board or our Board of Management and must be held
if one or more shareholders or other persons entitled to attend the general
meeting of shareholders jointly representing at least 10% of our issued share
capital make a written request to our Supervisory Board or our Board of
Management that a meeting be held and specifying in detail the business to be
dealt with at such meeting.

    Resolutions are adopted at general meetings of shareholders by a majority of
the votes cast, except where a different proportion of votes is required by the
Articles of Association or Netherlands law. Each ordinary share, and if
outstanding preference share, shall carry one vote.

    Amendment of Articles of Association and Winding Up. A resolution presented
to the general meeting of shareholders which amends our Articles of Association
or which winds us up may only be taken after a proposal by our Board of
Management, and approval of this proposal by our Supervisory Board. A resolution
to dissolve the company must be approved by at least a three-fourths majority of
the votes cast.

                                       39
<PAGE>

    APPROVAL OF ANNUAL ACCOUNTS

    Our annual Netherlands statutory accounts, together with a certificate of
our auditors, will be submitted to the general meeting of shareholders for
approval. Our Articles of Association provide that, following approval of our
annual accounts by the shareholders, a resolution shall be submitted to the
shareholders to discharge our Board of Management and our Supervisory Board from
liability for the performance of their respective duties for the past financial
year. Under Netherlands law, this discharge is not absolute and will not be
effective with respect to matters which are not disclosed to the shareholders.

    LIQUIDATION RIGHTS

    In the event of our dissolution and liquidation, the assets remaining after
payment of all debts and liquidation expenses are to be distributed first to the
preference shareholders to the extent of the amount paid on the preference
shares and then proportionately to holders of the ordinary shares.

    ISSUES OF SHARES; PREEMPTIVE RIGHTS

    If designated for this purpose by our general meeting of shareholders,
whether by means of any authorizing resolution or by an amendment to our
Articles of Association, our Board of Management has the power, subject to the
approval of our Supervisory Board, to issue shares. Following an extension of a
prior designation during the meeting held on May 1, 2002, such designation
presently runs through May 14, 2005. A further designation of the Board of
Management may be effective for a specified period of up to five years and may
be renewed. In the absence of such designation, the general meeting of
shareholders has the power to authorize the issuance of ordinary shares.

    Shareholders have a pro rata preemptive right of subscription to any
ordinary share issued for cash, which right may be limited or eliminated.
Shareholders have no pro rata preemptive subscription right with respect to any
ordinary shares issued for a contribution other than cash, with respect to any
issuance of preference shares or in the case of ordinary shares issued to our
employees. If designated for this purpose by our general meeting of shareholders
(whether by means of any authorizing resolution or an amendment to our Articles
of Association), our Board of Management has the power, subject to approval of
our Supervisory Board, to limit or eliminate shareholder preemptive rights
through May 14, 2005. A further designation would be effective for up to five
years and may be renewed. In the absence of such designation, the general
meeting of shareholders has the power to limit or eliminate such rights.

    The foregoing provisions apply equally to the issuance of rights to
subscribe for ordinary shares.

    PREFERENCE SHARES

    The Stichting Continuiteit Besi is a foundation established in April 2000.
The board of the foundation consists of five members, four of whom are
independent of BE Semiconductor Industries N.V. and one of whom is a member of
our Supervisory Board. The purpose of the foundation is to safeguard our
interests, the enterprise connected therewith and all the parties having an
interest therein and to exclude as much as possible influences which could
threaten, among other things, our continuity, independence and identity contrary
to such interests.

    The aim of the preference shares is to provide a protective measure against
unfriendly take-over bids. Under the terms of an agreement entered into in April
2002 between ourselves and the foundation, the foundation has been granted a
call option, pursuant to which it may purchase a number of preference shares up
to a maximum of the total number of outstanding ordinary shares. Until the call
option is exercised by the foundation, it can be revoked by us, with immediate
effect. Under the terms of an agreement entered into in April 2002, we may force
the foundation to exercise its call option right if it has been announced (or
may be expected) that an unfriendly take over bid will be made with respect to
our shares, or if (in the opinion of our Management Board), a single shareholder
(or group of shareholders) holds a substantial number of our ordinary shares.

    ISSUE OF PREFERENCE SHARES

    The provisions for the issuance of preference shares are similar to the
provisions for the issuance of ordinary shares described above. However, if an
issuance of preference shares would result in an outstanding amount of
preference shares exceeding 100% of the outstanding ordinary shares and the
issuance is effected pursuant to a resolution of a corporate body other than our
general meeting of shareholders, such as our Board of Management, the issuance
will require prior approval of our general meeting of shareholders.

                                       40
<PAGE>

    If the issuance of preference shares is effected pursuant to a resolution of
a corporate body other than our general meeting of shareholders, but the amount
of preference shares to be issued would not exceed 100% of the number of
outstanding ordinary shares, then prior approval of our general meeting of
shareholders is not required, but the reasons for the issuance must be explained
at an extraordinary general meeting of shareholders to be held within four weeks
after such issue. Subsequently, within two years after the first issuance of
preference shares, a general meeting of shareholders will be held to resolve to
repurchase or cancel the preference shares. If no such resolution is adopted,
another general meeting of shareholders with the same agenda must be convened
and held within two years after the previous meeting and this meeting will be
repeated until no preference shares are outstanding. This procedure does not
apply to preference shares that have been issued pursuant to a resolution by, or
with the prior approval of, our general meeting of shareholders.

    In connection with the issuance of preference shares it may be stipulated
that an amount not exceeding 75% of the nominal amount ordinarily payable upon
issuance of shares, may be paid only if we request payment. A decision of our
Board of Management for further payment requires prior approval of our
Supervisory Board.

    REPURCHASE AND CANCELLATION OF SHARES

    We may repurchase our ordinary shares, subject to compliance with certain
laws of the Netherlands requirements (and provided the aggregate nominal value
of our ordinary shares acquired by us at any one time amounts to no more than
one-tenth of our issued share capital). Ordinary shares owned by us may not be
voted or counted for quorum purposes. Any such purchases are subject to the
approval of our Supervisory Board and the authorization of our general meeting
of shareholders, which authorization is not effective for more than 18 months.
Our Board of Management is authorized to repurchase up to 10% of our issued
share capital through September 27, 2004. We may resell shares purchased by us.

    Upon a proposal of our Board of Management and approval of our Supervisory
Board, our shareholders at the general meeting shall have the power to decide to
cancel shares acquired by us or to reduce the nominal value of the ordinary
shares. Any such proposal is subject to general requirements of Netherlands law
with respect to reduction of share capital.

    LIMITATIONS ON RIGHT TO HOLD OR VOTE THE ORDINARY SHARES

    There are currently no limitations imposed by Netherlands law or by our
Articles of Association on the right of non-resident owners to hold or vote the
ordinary shares.

    OBLIGATIONS OF SHAREHOLDERS TO DISCLOSE HOLDINGS

    Under the Netherlands Act on disclosure of holdings in listed companies,
holders and certain beneficial owners of an interest in the voting rights and/or
our capital, must promptly notify us and the Securities Board of the Netherlands
(Autoriteit Financiele Markten) if their voting rights or capital interests
reaches, exceeds or falls below the range of 5%-10%, 10%-25%, 25%-50%, 50%-66 2
/3% or over 66 2/3%. Failure to comply constitutes a criminal offense and could
result in criminal as well as civil sanctions, including suspension of voting
rights.

EXCHANGE CONTROLS

    Cash distributions, if any, payable in Euro on bearer shares (and on
ordinary shares of the Amsterdam register) may be officially transferred from
the Netherlands and converted into any other currency without Dutch legal
restrictions, except that for statistical purposes such payments and
transactions in excess of certain amounts must be reported by us to the Dutch
Central Bank. Cash distributions, if any, on New York Shares shall be paid in US
dollars, converted at the rate of exchange on the Amsterdam Stock Exchange at
the close of business on the date fixed for that purpose by the Board of
Management in accordance with the articles of association. We have no current
intention to pay dividends on our ordinary shares.

TAXATION

NETHERLANDS TAXATION

The information set out below is a general summary of certain Dutch tax
consequences in connection with the ownership of ordinary shares. The summary
does not purport to be a comprehensive description of all the Dutch tax
considerations that may be relevant for a particular holder of shares, who is
subject to special tax treatment under any applicable law and it is not intended
to be applicable in respect of all categories of holders of ordinary shares. The
summary is based upon the tax laws of the Netherlands as in effect on the date
of this Annual Report on Form 20-F, as well as regulations, rulings and
decisions of

                                       41
<PAGE>

the Netherlands and its taxing and other authorities available in written form
on or before such date and now in effect. All of the foregoing is subject to
change, which change could apply retroactively and could affect the continuing
validity of this summary. Because it is a general summary, shareholders should
consult their own tax advisors as to the Dutch or other tax consequences of the
ownership shares, including, in particular, the application to their particular
situations of the tax considerations discussed below, as well as the application
of state, local, foreign or other tax laws.

WITHHOLDING TAX

We do not describe the tax consequences for a holder of shares, who may invoke
the participation exemption, as laid down in the Dutch Corporate Income Tax Act
1969 (Wet op de vennootschapsbelasting 1969), regarding the dividends received
on the Shares.

Dividends paid on the ordinary shares to a holder of the ordinary shares are
generally subject to a withholding tax of 25% imposed by the Netherlands. The
term "dividends" for this purpose includes, but is not limited to:

     -    distributions in cash or in kind, deemed and constructive
          distributions and repayments of paid-in capital not recognised for
          Dutch dividend withholding tax purposes,

     -    liquidation proceeds, proceeds of redemption of ordinary shares or,
          generally, consideration for the repurchase of ordinary shares in
          excess of the average paid-in capital recognised for Dutch dividend
          withholding tax purposes,

     -    the par value of ordinary shares issued to a shareholder or an
          increase of the par value of shares, as the case may be, to the extent
          that it does not appear that a contribution to the capital recognised
          for Dutch dividend withholding tax purposes, was made or will be made,
          and

     -    partial repayment of paid-in capital, recognised for Dutch dividend
          withholding tax purposes, if and to the extent that there are net
          profits (zuivere winst), within the meaning of the Dividend
          Withholding Tax Act 1965 (Wet op de dividendbelasting 1965), unless
          the general meeting of our shareholders has resolved in advance to
          make such a repayment and provided that the par value of the ordinary
          shares concerned will be reduced by a corresponding amount by way of
          an amendment of our articles of association.

A holder of the ordinary shares who is, or who is deemed to be, a resident of
the Netherlands or, if he is an individual, who opts to be taxed as a resident
of the Netherlands for purposes of Dutch taxation (a "Resident of the
Netherlands"), can generally credit the withholding tax against his Dutch income
tax or Dutch corporate income tax liability and is generally entitled to a
refund of dividend withholding taxes exceeding his aggregate Dutch income tax or
Dutch corporate income tax liability, provided certain conditions are met,
unless such Resident of the Netherlands is not considered to be the beneficial
owner. A holder of the Shares, who is the recipient of dividends (the
"Recipient") will not be considered the beneficial owner of the Shares, if as a
consequence of a combination of transactions a person other than the Recipient
wholly or partly benefits from the dividends, whereby such person retains,
whether directly or indirectly, an interest in the ordinary shares on which the
dividends were paid and the person who retains, whether directly or indirectly,
an interest in the ordinary shares on which the dividends were paid, is entitled
to a credit, reduction or refund of dividend withholding tax that is less than
that of the Recipient ("Dividend Stripping").

With regard to holder of ordinary shares, who is not treated as a resident of
the Netherlands for purposes of Dutch taxation (a "Non-Resident of the
Netherlands") and who is considered to be a resident of the Netherlands Antilles
or Aruba under the provisions of the Tax Convention for the Kingdom of the
Netherlands ("Belastingregeling voor het Koninkrijk"), or of a country (other
than the Netherlands) with which the Netherlands has concluded a double taxation
convention under the provisions of such convention, the following may apply.
Such shareholder may, depending on the terms of and subject to compliance with
the procedures for claiming benefits under the Tax Convention for the Kingdom of
the Netherlands or such double taxation convention, be eligible for a full or
partial exemption from, reduction or refund of Dutch dividend withholding tax.
In addition, subject to certain conditions and based on Dutch legislation
implementing the Parent Subsidiary Directive, an exemption from Dutch dividend
withholding tax will generally apply to dividends distributed to certain
qualifying entities that are resident of another EU-member state. The concept of
Dividend Stripping, described above, may also be applied to determine whether a
Non-Resident of the Netherlands may be eligible for a full or partial exemption
from, reduction or refund of Dutch dividend withholding tax.

SURTAX

We are subject to surtax at a rate of 20% to the extent that we distribute any
dividends on the ordinary shares during the period from 1 January 2001 up to and
including 31 December 2005 that are classified as "excessive". In certain
situations the surtax may be reduced fully or partially.

If the recipient of the dividends is a resident of the Netherlands, the
Netherlands Antilles or Aruba, a resident of a country

                                       42
<PAGE>

with which the Netherlands have concluded a double taxation convention or a
resident of an EU-member state, we may not be required to withhold dividend
withholding tax from a dividend distributed to the extent that the surtax
applies to the distribution.

TAXES ON INCOME AND CAPITAL GAINS

GENERAL

The description of taxation set out in this section of this Annual Report on
Form 20-F is not intended for any holder of ordinary shares:

     -    who is an individual and for whom the income or capital gains derived
          from the ordinary shares are attributable to employment activities the
          income from which is taxable in the Netherlands,

     -    who is an individual and who is a Resident of the Netherlands and who
          holds, or is deemed to hold a Substantial Interest in us (as defined
          below),

     -    who is an entity that is a Resident of the Netherlands and that is not
          subject to or is exempt from Dutch corporate income tax,

     -    who is an entity for which the income or capital gains derived from
          the ordinary shares are exempt under the participation exemption (as
          laid down in the Dutch Corporate Income Tax Act 1969, or

     -    who is an investment institution (beleggingsinstelling) as defined in
          the Dutch Corporate Income Tax Act 1969.

Generally a holder of ordinary shares will have a substantial interest in us
("Substantial Interest") if he holds, alone or together with his partner,
whether directly or indirectly, the ownership of, or certain other rights over,
ordinary shares representing 5% or more of our total issued and outstanding
capital (or the issued and outstanding capital of any class of shares), or
rights to acquire shares, whether or not already issued, that represent at any
time 5% or more of our total issued and outstanding capital (or the issued and
outstanding capital of any class of shares) or the ownership of certain profit
participating certificates that relate to 5% or more of the annual profit and/or
to 5% or more of the liquidation proceeds. A holder of ordinary shares will also
have a Substantial Interest in us if certain relatives of that holder or of his
partner have a Substantial Interest in us. If a holder of ordinary shares does
not have a Substantial Interest, a deemed Substantial Interest will be present
if (part of) a Substantial Interest has been disposed of, or is deemed to have
been disposed of, on a non-recognition basis.

RESIDENTS OF THE NETHERLANDS

A Resident of the Netherlands who is an individual and who holds ordinary shares
is subject to Dutch income tax on income and/or capital gains derived from the
ordinary shares at the progressive rate (up to 52%):

(i)  if the holder has an enterprise or an interest in an enterprise, to which
     enterprise the ordinary shares are attributable, or

(ii) the holder derives income or capital gains from the ordinary shares that
     are taxable as benefits from "miscellaneous activities" ("resultaat uit
     overige werkzaamheden").

If conditions (i) and (ii) mentioned above do not apply, any holder of ordinary
shares who is an individual, will be subject to Dutch income tax on a deemed
return regardless of the actual income and/or capital gains derived from the
ordinary shares. The deemed return amounts to 4% of the average value of the
holder's net assets in the relevant fiscal year (including the ordinary shares).
The deemed return, as reduced by certain base allowances, is taxed at a flat
rate of 30%.

A Resident of the Netherlands who is an entity will generally be subject to
Dutch corporate income tax with respect to income and capital gains derived from
the ordinary shares. The Dutch corporate income tax rate is 29% over the first
(euro)22,689 of taxable income and 34.5% over the taxable income exceeding
(euro)22,689.

NON-RESIDENTS OF THE NETHERLANDS

A Non-Resident of the Netherlands who holds ordinary shares is generally not
subject to Dutch income or corporate income tax (other than dividend withholding
tax described above) on the income and capital gains derived from the ordinary
shares, provided that:

     -    such Non-Resident of the Netherlands does not derive profits from an
          enterprise or deemed enterprise, whether as an entrepreneur
          (ondernemer) or pursuant to a co-entitlement to the net worth of such
          enterprise (other than as an entrepreneur or a shareholder) which
          enterprise is, in whole or in part, carried on through a permanent
          establishment or a permanent representative in the Netherlands and to
          which enterprise or part of an enterprise, as the case may be, the
          ordinary shares are attributable,

                                       43
<PAGE>

     -    such Non-Resident of the Netherlands, if it is an entity, does not
          have a Substantial Interest or deemed Substantial Interest in us, or
          if such holder does have such Substantial Interest, it forms part of
          the assets of an enterprise,

     -    in the case of a Non-Resident of the Netherlands who is an individual,
          such individual does not derive income or capital gains the ordinary
          shares that are taxable as benefits from "miscellaneous activities" in
          the Netherlands (resultaat uit overige werkzaamheden in Nederland),
          and

     -    such Non-Resident of the Netherlands is not entitled to a share in the
          profits of an enterprise effectively managed in the Netherlands, other
          than by way of the holding of securities or through an employment
          contract, to which enterprise the ordinary shares, or payments in
          respect of ordinary shares are attributable.

GIFT, ESTATE OR INHERITANCE TAXES

Dutch gift, estate or inheritance taxes will not be levied on the occasion of
the transfer of the ordinary shares by way of gift by or on the death of a
holder, unless:

     -    the holder is or is deemed to be a resident of the Netherlands for the
          purpose of the relevant provisions, or

     -    the transfer is construed as an inheritance or bequest or as a gift
          made by or on behalf of a person who, at the time of the gift or
          death, is or is deemed to be a resident of the Netherlands for the
          purpose of the relevant provisions, or

     -    such ordinary shares are attributable to an enterprise or part of an
          enterprise which is carried on by the holder through a permanent
          establishment or a permanent representative in the Netherlands, or

     -    the holder of such ordinary shares is entitled to a share in the
          profits of an enterprise effectively managed in the Netherlands, other
          than by way of the holding of securities or through a employment
          contract, to which enterprise such ordinary shares are attributable.

For purposes of Dutch gift, estate and inheritance tax, an individual who holds
the Dutch nationality will be deemed to be a resident of the Netherlands if he
has been a resident in the Netherlands at any time during the ten years
preceding the date of the gift or his death. For purposes of Dutch gift tax, an
individual not holding the Dutch nationality will be deemed to be resident of
the Netherlands if he has been a resident in the Netherlands at any time during
the 12 months preceding the date of the gift.

RESIDENCE

A holder of ordinary shares will not become or be deemed to become a resident of
the Netherlands solely by reason of holding ordinary shares.

    UNITED STATES TAXATION

    The following discussion summarizes certain material US federal tax
consequences of the acquisition, ownership and disposition of ordinary shares.
This summary applies to a holder of ordinary shares only if such holder is a
beneficial owner of ordinary shares and is, for US federal income tax purposes:

     -    an individual who is a citizen or resident of the US;

     -    a corporation, or other entity taxable as a corporation, that is
          created or organized under the laws of the US or any state thereof or
          the District of Columbia;

     -    an estate, the income of which is subject to taxation in the US
          regardless of its source; or

     -    a trust subject to the primary supervision of a US court and the
          control of one or more US persons.

    This summary is based on the tax laws of the US in force and as interpreted
by the relevant tax authorities as of the date of this Annual Report on Form
20-F, including the US-Netherlands income tax treaty that entered into force on
December 18, 1992 (the "Treaty"). This summary addresses only certain material
consequences arising under US federal tax law, and does not address tax
consequences arising under the laws of any state, locality or foreign taxing
jurisdiction.

    This summary is of a general nature only and does not address all of the tax
consequences that may be relevant to a US holder in light of such holder's
particular situation. In particular, this discussion only deals with US holders
that hold ordinary shares as capital assets, as that term is defined in the US
Internal Revenue Code, and does not address the special tax rules that may apply
to special classes of taxpayers, such as:

     -    securities broker-dealers;

     -    persons who hold ordinary shares as part of a larger integrated
          financial transaction or straddle;

     -    US holders whose functional currency is not the US dollar;

     -    US expatriates;

     -    persons who are owners of an interest in a partnership or other
          pass-through entity that is a holder of ordinary shares;

                                       44
<PAGE>

     -    regulated investment companies;

     -    financial institutions;

     -    insurance companies;

     -    tax-exempt organizations;

     -    holders that own, directly, indirectly or by attribution, 10% or more
          of our outstanding voting share capital; and

     -    persons subject to the alternative minimum tax.

This summary also does not discuss the tax consequences of the exchange or other
disposition of foreign currency in connection with the purchase or disposition
of ordinary shares.

    US holders should consult their own tax advisors as to the particular tax
consequences to them under US federal, state and local, and foreign tax laws of
the acquisition, ownership and disposition of ordinary shares.

    TAXATION OF DIVIDENDS

    We do not currently intend to pay dividends. Subject to the discussion below
under "Passive Foreign Investment Company Considerations", for US federal income
tax purposes, the gross amount of cash distributions (including the amount of
foreign taxes, if any, withheld therefrom) paid out of our current or
accumulated earnings and profits (as determined for US federal income tax
purposes) will be includible in the gross income of a US holder as dividend
income on the date of receipt. Dividends paid by us generally will be treated as
foreign source income and will not be eligible for the dividends received
deduction generally allowed to corporate shareholders under US federal income
tax law. Distributions in excess of our earnings and profits will be treated,
for US federal income tax purposes, first as a nontaxable return of capital to
the extent of the US holder's tax basis in the ordinary shares, and thereafter
as capital gain. The amount of any dividend paid in a non-US currency will be
equal to the US dollar value of the non-US currency on the date of receipt,
regardless of whether the US holder converts the payment into US dollars. A US
holder will have a tax basis in the non-US currency distributed equal to such US
dollar amount. Gain or loss, if any, recognized by a US holder on the sale or
disposition of the non-US currency generally will be US source ordinary income
or loss.

    Dividend income is generally taxed as ordinary income. However, as a result
of recent US tax legislation, a maximum US federal income tax rate of 15% will
apply to "qualified dividend income" received by individuals (as well as certain
trusts and estates) in taxable years beginning after December 31, 2002 and
before January 1, 2009, provided that certain holding period requirements are
met. "Qualified dividend income" includes dividends paid on shares of US
corporations as well as dividends paid on shares of "qualified foreign
corporations" if, among other things: (i) the shares of the foreign corporation
are readily tradable on an established securities market in the US; or (ii) the
foreign corporation is eligible with respect to substantially all of its income
for the benefits of a comprehensive income tax treaty with the US which contains
an exchange of information program (a "qualifying treaty"). Our ordinary shares
are readily tradable on the NASDAQ National Market. In addition, the Treaty is a
qualifying treaty. Accordingly, we believe that dividends paid by us with
respect to our ordinary shares should constitute "qualified dividend income" for
US federal income tax purposes, provided that the holding period requirements
are satisfied and none of the other special exceptions applies.

    Subject to certain complex conditions and limitations, which must be
determined on an individual basis by each US holder, any foreign tax withheld
from a distribution will generally be treated as a foreign income tax that US
holders may elect to deduct in computing their US federal taxable income or
credit against their US federal income tax liability. The limitations include,
among others, rules that may limit foreign tax credits allowable with respect to
specific classes of income to the US federal income taxes otherwise payable with
respect to each such class of income. Dividends paid by us generally will be
foreign source "passive income" or "financial services income" for US foreign
tax credit purposes.

    TAXATION ON SALE, EXCHANGE OR OTHER DISPOSITION OF ORDINARY SHARES

    Unless a nonrecognition provision applies, US holders will generally
recognize gain or loss for US federal income tax purposes on the sale, exchange
or other disposition of ordinary shares in an amount equal to the difference
between the US dollar value of the amount realized and the US holder's adjusted
tax basis in the ordinary shares. In general, a US holder's adjusted tax basis
in the ordinary shares will be equal to the amount paid by the US holder for
such ordinary shares. Subject to the discussion below under "Passive Foreign
Investment Company Considerations", such gain or loss will generally be US
source capital gain or loss, and will be long-term capital gain or loss if the
ordinary shares have been held for more than one year. If a US holder is an
individual, trust or estate, long-term capital gain realized upon a disposition
of an ordinary share after May 5, 2003 and before the end of a taxable year
which begins before January 1, 2009 generally will be subject to a maximum US
federal income tax rate of 15%. Gains on the sale of ordinary shares held for
one year or less will be treated as short-term capital gain and taxed as
ordinary income at the US holder's marginal income tax rate. Capital losses may
only be used to offset capital gains, except that US individuals may deduct up
to $3,000 of net capital losses against ordinary income. US holders should
consult their own tax advisors regarding the availability of this offset.

    PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS

                                       45
<PAGE>

    If, during any taxable year, 75% or more of our gross income consists of
certain types of passive income, or the average value during a taxable year of
our passive assets (generally assets that generate passive income) is 50% or
more of the average value of all of our assets, we will be treated as a "passive
foreign investment company", or PFIC, under US federal income tax law for such
year and succeeding years. Based on an analysis of our financial position, we
believe that we have not been a PFIC for US federal income tax purposes for any
preceding taxable year and expect that we will not become a PFIC during the
current taxable year. However, because the tests for determining PFIC status are
applied as of the end of each taxable year and are dependent upon a number of
factors, some of which are beyond our control, including the value of our
assets, based on the market price of our ordinary shares, and the amount and
type of our gross income, we cannot assure US holders that we will not become a
PFIC in the future or that the IRS will agree with our conclusion regarding our
current PFIC status. We intend to use reasonable efforts to avoid becoming a
PFIC. If we determine that we are a PFIC, we will take reasonable steps to
notify US holders.

    If we were classified as a PFIC, unless a US holder timely made one of the
elections described below, a special tax regime would apply to both:

     -    any "excess distribution", which would be such holder's share of
          distributions in any year that are greater than 125% of the average
          annual distributions received by such holder in the three preceding
          years or such holder's holding period, if shorter; and

     -    any gain realized on the sale or other disposition of the ordinary
          shares.

    Under this regime, any excess distribution and realized gain would be
treated as ordinary income and would be subject to tax as if the excess
distribution or gain had been realized ratably over the US holder's holding
period for the ordinary shares. As a result of this treatment:

     -    the amount allocated to the taxable year in which the holder realizes
          the excess distribution or gain would be taxed as ordinary income;

     -    the amount allocated to each prior year, with certain exceptions,
          would be taxed as ordinary income at the highest applicable tax rate
          in effect for that year; and

     -    the interest charge generally applicable to underpayments of tax would
          be imposed on the taxes deemed to have been payable in those previous
          years.

    If a US holder makes a mark-to-market election with respect to such holder's
ordinary shares, the holder will not be subject to the PFIC rules described
above. Instead, in general, such US holder will include as ordinary income each
year the excess, if any, of the fair market value of such holder's ordinary
shares at the end of the taxable year over the holder's adjusted basis in those
shares. Such US holder will also be allowed to take an ordinary loss in respect
of the excess, if any, of the adjusted basis of the holder's ordinary shares
over their fair market value at the end of the taxable year, but only to the
extent of the net amount of income previously included as a result of the
mark-to-market election. The US holder's tax basis in the ordinary shares will
be adjusted to reflect any such income or loss amounts. Any gain realized upon
disposition of such US holder's ordinary shares will also be taxed as ordinary
income.

    The special PFIC tax rules described above also will not apply to a US
holder if the holder makes a QEF election, that is, the holder elects to have us
treated as a qualified electing fund for US federal income tax purposes. If we
determine that we are a PFIC, we will provide US holders with such information
as they may require from us in order to make an effective QEF election.

    If a US holder makes a QEF election, the holder will be required to include
in gross income for US federal income tax purposes such holder's pro rata share
of our ordinary earnings and net capital gain for each of our taxable years that
we are a PFIC, regardless of whether or not the holder receives any
distributions from us. Such US holder's tax basis in the ordinary shares will be
increased to reflect undistributed amounts that are included in such holder's
gross income. Distributions of previously includible income will result in a
corresponding reduction of basis in the ordinary shares and will not be taxed
again as a distribution to such holder.

    US holders are urged to consult their own tax advisors concerning the
potential application of the PFIC rules to the ownership and disposition of
ordinary shares.

    US GIFT AND ESTATE TAXES

    An individual US holder generally will be subject to US gift and estate
taxes with respect to ordinary shares in the same manner and to the same extent
as with respect to other types of personal property.

                                       46
<PAGE>

    BACKUP WITHHOLDING

    Dividend payments with respect to ordinary shares and proceeds from the
sale, exchange or other disposition of ordinary shares may be subject to
information reporting to the Internal Revenue Service and possible backup
withholding at a 28% rate. Backup withholding will generally not apply to a US
holder, however, if the holder furnishes a correct taxpayer identification
number and makes any other required certification or if the holder is otherwise
exempt from backup withholding. If the US holder is required to establish the
holder's exempt status, the holder generally must provide such certification on
Internal Revenue Service Form W-9.

    Backup withholding is not an additional tax. Amounts withheld as backup
withholding may be credited against a US holder's US federal income tax
liability, and the holder may obtain a refund of any excess amounts withheld
under the backup withholding rules by filing the appropriate claim for refund
with the Internal Revenue Service and furnishing any required information.

DOCUMENTS ON DISPLAY

    Our company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. In accordance with these requirements, we file
reports and other information with the Securities and Exchange Commission. These
materials, including this annual report and the exhibits thereto, may be
inspected and copies at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of the materials may be obtained
from the Public Reference Room of the Commission at prescribed rates. The public
may obtain information on the operation of the Commission's Public Reference
Room by calling the Commission in the United States at 1-800-SEC-0330. The
Commission also maintains a web site at http://www.sec.gov that contains
reports, proxy statements and other information regarding registrants that file
electronically with the Commission.

ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

    See "Item 5: Operating and Financial Review and Prospects"

ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

    Not applicable.

                                     PART II

ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

    Not applicable.

ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS

    Not applicable.

ITEM 15: CONTROLS AND PROCEDURES

    (a) Evaluation of disclosure controls and procedures. Based on their
evaluation of our disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of a date
within 90 days of the filing date of this Annual Report on Form 20-F, our chief
executive officer and director of finance have concluded that our disclosure
controls and procedures are designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and are operating in an effective manner.

    (b) Changes in internal controls. There were no significant changes in
our internal controls or in other factors that could significantly affect these
controls subsequent to the date of their most recent evaluation.

ITEM 16

A.   AUDIT COMMITTEE FINANCIAL EXPERT

The members of the Audit Committee are all independent, non-executive members of
the Supervisory Board. The Supervisory Board has determined that Mr. Sinninghe
Damste qualifies as an Audit Committee Financial Expert.

B.   CODE OF ETHICS

                                       47
<PAGE>

In 2003, our Supervisory Board approved the Besi Code of Business Conduct and
Ethics and Code of Ethics for senior financial staff. A copy of the Code of
Business Conduct and Ethics and Code of Ethics for senior financial staff is
posted on our website.

C.   PRINCIPAL AUDITOR FEES AND SERVICES

KPMG has served as our independent public accountants for each of the years
ended in the three-year period ended December 31, 2003. The following table
presents the aggregate fees for professional audit services and other services
rendered by KPMG in 2003 and 2002:

<TABLE>
<CAPTION>
                                                December 31,
                                         -------------------------
                                         2002                 2003
(Amounts in thousands)                   EURO                 EURO
----------------------                  ----------------------------
<S>                                     <C>                  <C>
Audit fees                              241,009              184,700
Audit related fees                            -               40,650
Tax fees                                 25,748               56,640
All other fees                              618                    -
                                        ----------------------------
Total                                   267,375              281,990
                                        ============================
</TABLE>

AUDIT FEES

Audit fees primarily relate to fees for professional services rendered in
connection with the audit of our annual financial statements set forth in our
Annual Report on Form 20-F, agreed upon procedures work on our quarterly
financial results, services related to statutory and regulatory filings of our
subsidiaries and services in connection with accounting consultations.

AUDIT-RELATED FEES

Audit related fees mainly comprise services in connection with consultations on
various accounting issues, possible acquisitions and rendering opinions for
different corporate-related items.

TAX FEES

Tax fees related to services in connection with tax advice, including fees
associated with tax compliance services for foreign subsidiaries and other audit
related tax services for the years ended December 31, 2002 and 2003.

The Audit Committee has approved the external audit plan and related audit fees
for the year 2003. The Audit Committee has adopted a policy regarding audit and
non-audit services, provided by KPMG. This policy is designed to ensure the
independence of our auditors by expressly setting forth all services that the
auditors may not perform and reinforcing the principle of independence
regardless of the type of work performed. Certain non-audit services such as
tax-related services and acquisition advisory are permitted. The Audit
Committee pre-approves non-audit services not specifically permitted under this
policy and reviews the annual external audit plan and any subsequent
engagements.

                                    PART III

ITEM 18: FINANCIAL STATEMENTS

    See pages F-1 through F-61.

ITEM 19: EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            DESCRIPTION OF EXHIBIT
<S>               <C>
1.1               Articles of Association of be Semiconductor Industries N.V.
                  (English translation) (incorporated by reference to Exhibit
                  1.1 to Registrant's Annual Report on Form 20-F for the fiscal
                  year ended December 31, 2000)

8.1               List of Subsidiaries of BE Semiconductor Industries N.V.

12.1              Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive
                  Officer

12.2              Rule 13a-14(a)/15(d)-14(a) Certification of Director of
                  Finance

13.1              Section 1350 Certification of Chief Executive Officer

13.2              Section 1350 Certification of Director of Finance
</TABLE>

                                       48
<PAGE>

                                   SIGNATURES

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

                              BE SEMICONDUCTOR INDUSTRIES NV

                              By: /s/ Richard W. Blickman
                                  --------------------------------------------
                                  Name: Richard W. Blickman
                                  Title: President and Chief Executive Officer

    Date:  May 11, 2004

<PAGE>

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 2003

<TABLE>
<S>                                                                     <C>
BE SEMICONDUCTOR INDUSTRIES N.V.:

Independent Auditors' Report.................................           F-2

Consolidated Balance Sheets..................................           F-3

Consolidated Statements of Operations........................           F-4

Consolidated Statements of Cash Flows........................           F-5

Consolidated Statements of Shareholders' Equity..............           F-7

Consolidated Statements of Comprehensive Income (loss).......           F-8

Notes to the Consolidated Financial Statements...............           F-9

POSSEHL BESI ELECTRONICS N.V.:

Independent Auditors' Report.................................           F-41

Consolidated Balance Sheets..................................           F-42

Consolidated Statements of Operations........................           F-44

Consolidated Statements of Cash Flows........................           F-45

Consolidated Statements of Shareholders' Equity..............           F-47

Consolidated Statements of Comprehensive Income (loss).......           F-47

Notes to the Consolidated Financial Statements...............           F-48
</TABLE>

                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Supervisory Board and the Board of Management of BE Semiconductor
Industries N.V.

We have audited the accompanying consolidated balance sheets of BE Semiconductor
Industries N.V. and subsidiaries as of December 31, 2002 and 2003 and the
related consolidated statements of operations, cash flows, shareholders' equity
and accumulated other comprehensive income (loss), for each of the years in the
three-year period ended December 31, 2003. These Consolidated Financial
Statements are the responsibility of the management of BE Semiconductor
Industries N.V. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
Possehl BESI Electronics N.V., a 30% owned investee company which was sold on
November 15, 2001. BE Semiconductor Industries N.V.'s equity in earnings was a
loss of (euro) 10,372,000 for the period from January 1, 2001 to November 15,
2001. The financial statements of Possehl BESI Electronics N.V. were audited by
other auditors whose report has been furnished to us, and our opinion, insofar
as it relates to the amounts included for Possehl BESI Electronics N.V. for the
year ended December 31, 2001, is based solely on the report of the other
auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
Consolidated Financial Statements referred to above present fairly, in all
material respects, the financial position of BE Semiconductor Industries N.V.
and subsidiaries at December 31, 2002 and 2003 and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.

We refer to Note 2 to the Consolidated Financial Statements that BE
Semiconductor Industries N.V. issued also statutory financial statements in
accordance with accounting principles in the Netherlands which are available at
the Company and will be filed at the Chamber of Commerce of Oost-Brabant
(`s-Hertogenbosch). Based upon section 2:395 subsection 2 of the Netherlands
Civil Code we state that we expressed an unqualified opinion on these statutory
financial statements.

As discussed in Note 1 to the Consolidated Financial Statements, on January 1,
2002, the Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets". As required by SFAS No. 142,
goodwill and intangible assets with indefinite lives are no longer amortized,
but instead are tested for impairment at least annually.

KPMG Accountants N.V.
`s-Hertogenbosch, the Netherlands
February 10, 2004

                                      F-2
<PAGE>

                           CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                               December 31,
                                                   -----------------------------------
                                                    2002          2003          2003
                                                    EURO          EURO        USD (1))
                                                   -----------------------------------
<S>                                                <C>           <C>           <C>
Assets

Cash and cash equivalents                          119,866       108,897       137,178
Accounts receivable                                 28,238        17,957        22,621
Inventories                                         33,424        27,880        35,120
Other current assets                                 7,687         9,439        11,890

                                                   -----------------------------------
Total current assets                               189,215       164,173       206,809

Property, plant and equipment                       23,103        30,100        37,917
Goodwill                                            14,690        12,846        16,182
Patents and trademarks                              17,036        13,575        17,100
Other non-current assets                               954           723           911

                                                   -----------------------------------
Total assets                                       244,998       221,417       278,919
                                                   ===================================

Liabilities and shareholders' equity

Current portion of long-term debt and
  capital leases                                     1,228           934         1,177
Accounts payable                                    13,103        10,338        13,023

Accrued liabilities                                 17,272        14,464        18,220

                                                   -----------------------------------
Total current liabilities                           31,603        25,736        32,420

Long-term debt and capital leases                    7,812         7,945        10,008
Deferred gain on sale and lease back                 1,012           927         1,168
Deferred tax liabilities                             4,039         3,112         3,920

                                                   -----------------------------------
Total non-current liabilities                       12,863        11,984        15,096

Minority interest                                       44           191           241

Ordinary shares                                     28,117        28,023        35,300
Preference shares                                        -             -             -
Capital in excess of par value                     177,730       177,478       223,569
Retained deficit                                    (1,744)      (15,241)      (19,199)
Accumulated other comprehensive loss                (3,615)       (6,754)       (8,508)

                                                   -----------------------------------
Total shareholders' equity                         200,488       183,506       231,162

                                                   -----------------------------------
Total liabilities and shareholders' equity         244,998       221,417       278,919
                                                   ===================================
</TABLE>

1) See Note 2 of "Notes to the Consolidated Financial Statements".

                                      F-3
<PAGE>

 The accompanying notes are an integral part of these Consolidated Financial
                                   Statements

                                      F-4
<PAGE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                                           Year ended December 31,
                                                        -------------------------------------------------------------
                                                            2001             2002             2003             2003
                                                            EURO             EURO             EURO           USD (1))
                                                        -------------------------------------------------------------
<S>                                                     <C>              <C>              <C>              <C>
Net sales                                                  150,030           83,228           85,500          107,704
Cost of sales                                               96,253           55,849           63,345           79,795

                                                        -------------------------------------------------------------
Gross profit                                                53,777           27,379           22,155           27,909

Selling, general and administrative
  expenses                                                  30,563           26,235           25,436           32,042
Research and development expenses                           15,446           12,470           13,564           17,087
Restructuring charges                                        8,306              786                -                -
Impairment of intangibles                                        -            3,302              287              361
Amortization of intangible assets                            3,848            2,591            2,522            3,177

                                                        -------------------------------------------------------------
Total operating expenses                                    58,163           45,384           41,809           52,667

Operating loss                                              (4,386)         (18,005)         (19,654)         (24,758)
Interest income, net                                         4,240            3,395            2,815            3,546

                                                        -------------------------------------------------------------
Loss before taxes and equity
  in loss of affiliated
  companies and minority interest                             (146)         (14,610)         (16,839)         (21,212)
Income taxes (benefit)                                         518            2,404           (3,292)          (4,147)

                                                        -------------------------------------------------------------
Loss before equity in loss of affiliated companies
and minority interest                                         (664)         (17,014)         (13,547)         (17,065)

Equity in loss of affiliated companies and loss on
  sale of affiliated companies                             (16,314)               -                -                -
Minority interest                                                -                3               50               63

                                                        -------------------------------------------------------------
Net loss                                                   (16,978)         (17,011)         (13,497)         (17,002)
                                                        =============================================================

Loss per share

Basic                                                        (0.53)           (0.54)           (0.44)           (0.55)
Diluted                                                      (0.53)           (0.54)           (0.44)           (0.55)

Weighted average number of shares used to compute
loss per share
Basic                                                   31,794,675       31,462,482       30,813,681       30,813,681
Diluted                                                 31,794,675       31,462,482       30,813,681       30,813,681
                                                        =============================================================
</TABLE>

1) See Note 2 of "Notes to the Consolidated Financial Statements".

   The accompanying notes are an integral part of these Consolidated Financial
                                   Statements

                                      F-5
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                     Year ended December 31,
                                                        -------------------------------------------------
                                                          2001         2002          2003          2003
                                                          EURO         EURO          EURO        USD (1))
                                                        -------------------------------------------------
<S>                                                     <C>          <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                (16,978)     (17,011)     (13,497)     (17,002)

Adjustments to reconcile net loss
  to net cash provided by (used in) operating
  activities:
Depreciation of property, plant and
  equipment                                               4,495        4,135        3,947        4,972
Amortization of intangible assets                         3,848        2,591        2,522        3,177
Impairment of intangibles                                     -        3,302          287          361
Deferred income taxes (benefits)                         (1,541)       2,403         (610)        (768)
Loss (gain) on disposal of equipment                         (5)          13          (32)         (40)
Loss on disposal of subsidiaries and affiliated
  companies                                               4,805            -            -            -
Translation of debt in foreign currency                     176        2,109        2,409        3,035
Minority interest                                             -           (3)         (50)         (63)
Equity in loss of affiliated companies                   11,509            -            -

Effects of changes in assets and liabilities:
Decrease in accounts receivable                          17,484        3,575        9,961       12,548
Decrease (increase) in inventories                       10,847       (2,405)       4,764        6,001
Decrease (increase) in other current assets               3,224       (2,857)      (1,908)      (2,403)
Increase (decrease) in accrued liabilities               (1,335)      (7,393)         124          156
Increase (decrease) in accounts payable                 (21,587)       7,317       (2,621)      (3,302)

                                                        ----------------------------------------------
Net cash provided by (used in) operating activities
                                                         14,942       (4,224)       5,296        6,672

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                     (3,393)      (4,903)     (11,889)     (14,976)
Proceeds from sale of property, plant and equipment          28        6,789           93          117
Proceeds from sale of subsidiaries and
  affiliated companies                                   18,091            -            -            -
Acquisition of subsidiaries, net of cash
  acquired                                                 (170)     (10,605)           -            -
Decrease in advances to affiliated
  companies                                                 173            -            -            -

                                                        ----------------------------------------------
Net cash provided by (used in) investing activities      14,729       (8,719)     (11,796)     (14,859)
                                                        ==============================================
</TABLE>

1) See Note 2 of "Notes to the Consolidated Financial Statements".

                                      F-6
<PAGE>

Consolidated Statements of Cash Flows
(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                     Year ended December 31,
                                                       --------------------------------------------------
                                                         2001          2002          2003         2003
                                                         EURO          EURO          EURO        USD (1))
                                                       --------      --------      --------      --------
<S>                                                    <C>           <C>           <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt and capital leases
                                                         (1,704)       (1,646)       (1,233)       (1,553)
Proceeds from long-term debt                                  -             -         1,185         1,493
Net proceeds from (payments of) advances
  from customers                                         (9,688)        1,015        (2,644)       (3,331)
Payments of bank lines of credit                              -        (1,324)            -             -
Purchase of own shares                                        -        (4,885)         (346)         (436)
Proceeds from minority shareholder                            -            48           221           278

                                                        -------------------------------------------------
Net cash used in financing activities
                                                        (11,392)       (6,792)       (2,817)       (3,549)

Net increase (decrease) in cash and cash equivalents
                                                         18,279       (19,735)       (9,317)      (11,736)

Effect of changes in exchange rates on cash
  and cash equivalents                                      378        (1,905)       (1,652)       (2,081)
Cash and cash equivalents at beginning of
  the year                                              122,849       141,506       119,866       150,995

                                                        -------------------------------------------------
Cash and cash equivalents at end of the year            141,506       119,866       108,897       137,178
                                                        =================================================

Supplemental disclosure:

Cash paid for interest                                      833           710           655           825
Cash paid for income taxes                                2,822           653           117           147
                                                        =================================================
</TABLE>

1) See Note 2 of "Notes to the Consolidated Financial Statements".

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

                                      F-7
<PAGE>

Consolidated Statements of Shareholders' Equity
(Amounts in thousands except share data)

<TABLE>
<CAPTION>
                                                                                                  Accumulated
                                                             Share      Capital                      other       Total
                                             Number of      capital    in excess      Retained   comprehensive   share-
                                             ordinary        at par      of par       earnings       income     holders'
                                              shares         value       value        (deficit)      (loss)      equity
                                            outstanding      EURO         EURO          EURO          EURO        EURO
                                            ----------------------------------------------------------------------------
<S>                                         <C>             <C>        <C>            <C>        <C>            <C>
Balance at December 31, 2000                31,794,675       28,933       181,799       32,245       4,766       247,743

Net loss                                             -            -             -      (16,978)          -       (16,978)
Exchange rate changes for the year                   -            -             -            -       1,139         1,139
Reclassification - adjustment for
  exchange rate changes on sale of
  affiliated companies realized in net
  loss                                               -            -             -            -      (3,602)       (3,602)

                                            ----------------------------------------------------------------------------
Balance at December 31, 2001                31,794,675       28,933       181,799       15,267       2,303       228,302

Net loss                                             -            -             -      (17,011)          -       (17,011)
Exchange rate changes for the year                   -            -             -            -      (5,918)       (5,918)
Repurchases of own shares                     (896,447)        (816)       (4,069)           -           -        (4,885)

                                            ----------------------------------------------------------------------------
Balance at December 31, 2002                30,898,228       28,117       177,730       (1,744)     (3,615)      200,488

Net loss                                             -            -             -      (13,497)          -       (13,497)
Exchange rate changes for the year                   -            -             -            -      (3,139)       (3,139)
Repurchases of own shares                     (103,568)         (94)         (252)           -           -          (346)

                                            ----------------------------------------------------------------------------
Balance at December 31, 2003                30,794,660       28,023       177,478      (15,241)     (6,754)      183,506
                                            ============================================================================
</TABLE>

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

                                      F-8
<PAGE>

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                Year ended December 31,
                                                                   ---------------------------------------------------
                                                                     2001          2002          2003          2003
                                                                     EURO          EURO          EURO         USD (1))
                                                                   ---------------------------------------------------
<S>                                                                <C>           <C>           <C>            <C>
Net loss                                                           (16,978)      (17,011)      (13,497)       (17,002)

Other comprehensive income (loss):

Foreign currency translation adjustment                              1,139        (5,918)       (3,139)        (3,954)
Adjustment for exchange rate changes on sale of
  affiliated companies realized in net loss                         (3,602)            -             -              -
                                                                   --------------------------------------------------
Comprehensive loss                                                 (19,441)      (22,929)      (16,636)       (20,956)
                                                                   ==================================================
</TABLE>

Accumulated other comprehensive income (loss) consists of:

<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                     --------------------------------------------------
                                                                      2001         2002          2003          2003
                                                                      EURO         EURO          EURO         USD (1))
                                                                     --------------------------------------------------
<S>                                                                   <C>         <C>           <C>           <C>
Foreign currency translation adjustment                               2,303       (3,615)       (6,754)        (8,508)

                                                                      -----------------------------------------------
Accumulated other comprehensive income (loss)                         2,303       (3,615)       (6,754)        (8,508)
                                                                      ===============================================
</TABLE>

1) See Note 2 of "Notes to the Consolidated Financial Statements".

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

                                      F-9
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1      BASIS OF PRESENTATION

BE Semiconductor Industries N.V. ("Besi") was incorporated in the Netherlands in
May 1995 as a wholly owned subsidiary of AdCapital AG, former Berliner Elektro
Holding AG (together with its consolidated subsidiaries, "Berliner Elektro") to
serve as the holding company for a worldwide business engaged in the
development, production, marketing and sales of back-end equipment for the
semiconductor industry. Besi's principal operations are in the Netherlands, Asia
and the United States. Besi operates its business through its subsidiaries Fico
B.V. ("Fico"), Meco International B.V. ("Meco") and their respective
subsidiaries and Besi Die Handling Inc. ("Besi Die Handling").

On October 1, 1993, Berliner Elektro acquired all the outstanding shares of Fico
from a third party for consideration of (euro) 27.2 million (NLG 60 million).
This acquisition was accounted for using the purchase method of accounting. At
that time, certain tangible and intangible assets were revalued to reflect their
fair value. The resulting negative goodwill was allocated proportionally to the
acquired non-current assets.

Effective May 1, 1995, Besi acquired all the outstanding shares of Meco from a
third party for consideration of (euro) 52.2 million (NLG 115 million). This
acquisition was financed through the issuance of (euro) 25 million (NLG 55
million) of share capital (excluding issue expenses) and (euro) 27.2 million
(NLG 60 million) short-term intercompany debt (denominated in German marks).
This acquisition was accounted for using the purchase method of accounting. At
that time, certain tangible and intangible assets were revalued to reflect their
fair value.

In April 2000, 18.4 million ordinary shares of Besi were sold to investors
through the Euronext (former Amsterdam Stock Exchange), Frankfurt Stock Exchange
and Nasdaq Stock Market at a price of (euro)?18.00 (US$ 17.30). Besi sold a
total of 5.4 million shares, including the exercise of the underwriters'
over-allotment option of 2.4 million shares. Berliner Elektro sold 13 million
shares, thereby reducing its ownership of Besi's ordinary shares from
approximately 55% to less than 5%. The gross and net proceeds of the offering to
Besi were (euro)?97.2 million and (euro)?94.0 million, respectively.

On November 15, 2001, Besi sold its 30% equity interest in Possehl BESI
Electronics N.V. ("PBE") to L. Possehl & Co., mbH (`'Possehl") for (euro) 18.1
million in cash. In connection with this transaction, Besi recorded a loss on
disposal of (euro) 4.8 million. This loss is included in equity in loss of
affiliated companies and loss on sale of affiliated companies in the
Consolidated Statements of Operations.

    On January 4, 2002, Besi acquired Laurier for a cash consideration of US$
8.9 million. Acquisition cost amounted to US$ 0.5 million. This acquisition was
accounted for using the purchase method of accounting. In connection with this
transaction, an allocation of the purchase price was made resulting in certain
purchase accounting adjustments. The purchase price, including acquisition
costs, was allocated as follows:

<TABLE>
<CAPTION>
(In thousands)                                    USD
--------------                                   ------
<S>                                              <C>
Net tangible assets                              1,161
Patents                                          1,508
Goodwill                                         6,695

                                                 -----
                                                 9,364
                                                 =====
</TABLE>

The patents are amortized over their estimated useful life of 13 years. The
goodwill resulting from the transaction will not be amortized, but will instead
be evaluated for impairment in accordance with SFAS No. 142. The pro forma
impact of this acquisition on prior year financial information is not
significant.

2      SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

PRESENTATION

The accompanying Consolidated Financial Statements include the accounts of BE
Semiconductor Industries N.V. and its consolidated subsidiaries (collectively,
"the Company"). The Company follows accounting principles generally accepted in
the United States of America ("US GAAP").

The Consolidated Financial Statements presented in this Annual Report are
prepared in conformity with US GAAP. In accordance with these principles, the
Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets" as of
January 1, 2002 and of that date, goodwill amortization ceased. In accordance
with accounting principles generally accepted in the Netherlands, goodwill

                                      F-10
<PAGE>

continued to be amortized. Results in accordance with accounting principles in
the Netherlands therefore differ from the results presented in this Annual
Report.

The accompanying Consolidated Financial Statements are, solely for the
convenience of the reader, also translated into US dollars ("USD" or "US$")
using the noon buying rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of New
York in effect on December 31, 2003 ((euro) 1.00 = US$ 1.2597). Such
translations should not be construed as representations that the euro amounts
could be converted into US dollar amounts at that or any other date. All euro
and US dollar amounts are expressed in thousands, unless otherwise stated.

PRINCIPLES OF CONSOLIDATION

As of December 31, 2003, the following subsidiaries are included in the
accompanying Consolidated Financial Statements:

<TABLE>
<CAPTION>
                                                                                    PERCENTAGE OF
                NAME                                      LOCATION                    OWNERSHIP
                ----                                      --------                  ------------
<S>                                            <C>                                  <C>
BE Semiconductor Industries USA, Inc.          Londonderry, New Hampshire, USA           100%
Fico B.V.                                      Duiven, the Netherlands                   100%
Fico Molding Systems B.V.                      Duiven, the Netherlands                   100%
Fico Trim & Form Integration Systems B.V.      Duiven, the Netherlands                   100%
Fico Tooling B.V.                              Duiven, the Netherlands                   100%
Fico Tooling Leshan Company Ltd.               Leshan, China                              87%
Fico Asia SDN. BHD.                            Shah Alam, Malaysia                       100%
Fico America Inc.                              Chandler, Arizona, USA                    100%
ASM Fico (F.E.) SDN. BHD.                      Shah Alam, Malaysia                      99.9% (1))
Besi Korea Ltd.                                Seoul, Korea                              100%
Fico Hong Kong Ltd.                            Hong Kong, China                          100%
Nihon Fico Ltd.                                Tokyo, Japan                              100%
Fico Sales & Service Pte. Ltd.                 Singapore                                 100%
Meco International B.V.                        Drunen, the Netherlands                   100%
Meco Equipment Engineers B.V.                  Drunen, the Netherlands                   100%
Besi Japan Co. Ltd.                            Tokyo, Japan                              100%
Meco Equipment Engineers Inc.                  Rock Hill, South Carolina, USA            100%
Meco Equipment Engineers (Far East) Pte Ltd.   Singapore                                 100%
Besi Die Handling Inc.                         Londonderry, New Hampshire, USA           100% (2))
</TABLE>

1) The Company has a 100% beneficial ownership.

2) On April 13, 2003 The Company's 100% subsidiary Lilogix Inc. (d/b/a RD
Automation) was merged into Laurier Inc. The name of the Company has been
changed into Besi Die Handling Inc.

The balance sheets of the Company's foreign subsidiaries are translated at the
year-end exchange rate and the income statements of the foreign subsidiaries are
translated at the average rate of exchange prevailing during the period.
Translation differences arising from the consolidation of the financial
statements of foreign subsidiaries are recorded directly to accumulated other
comprehensive income (loss).

All significant intercompany profit, transactions and balances have been
eliminated in consolidation.

DERIVATIVE FINANCIAL INSTRUMENTS

In accordance with SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" and SFAS No. 138, "Accounting for Derivative Instruments and
Hedging Activities, an Amendment of SFAS 133", which the Company adopted on
January 1, 2001, all derivative financial instruments are carried in the
Consolidated Balance Sheets at fair value.

Using qualifying criteria defined in SFAS No. 133 and 138, derivative
instruments are designated and accounted for as either a hedge of exposure to
the change in fair value of a recognized asset or liability or unrecognized firm
commitment (fair value hedge), or a hedge of the exposure to variability in the
cash flows of a recognized asset or liability, or forecasted transaction (cash
flow hedge). For a fair value hedge, the gain or loss (both the effective and
ineffective portions) relating to the change in fair value of the derivative
instrument is recognized in earnings in the period of change, together with the
gain or loss on the hedged item attributable to the hedged risk. For a cash flow
hedge, gains and losses relating to changes in the fair value of the derivative
instrument that are highly effective are initially recorded in accumulated other
comprehensive income or loss and subsequently

                                      F-11
<PAGE>

reclassified into earnings when the underlying hedged item affects earnings. The
ineffective portion of cash flow hedges is recognized in earnings immediately.
During 2003, the derivative instruments used by the Company all qualify as fair
value hedges. The Company does not use derivative financial instruments for
trading or speculative purposes.

The Company uses forward foreign currency exchange contracts to hedge certain
firm commitments denominated in foreign currencies. The terms of the currency
instruments used are consistent with the timing of the firmly committed
transactions being hedged. The purpose of the Company's foreign currency
management activity is to protect the Company from changes in fair value of
foreign currency denominated transactions that may be adversely affected by
changes in exchange rates.

FOREIGN CURRENCY

Foreign currency transactions are recorded at the exchange rate of the date of
origin or at a forward contract rate if hedged through a related forward foreign
currency exchange contract. Assets and liabilities denominated in foreign
currencies are translated at year-end exchange rates. Realized exchange rate
differences are recorded in the Consolidated Statements of Operations in
selling, general and administrative expenses.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid investments with an original
maturity date at the date of acquisition of three months or less.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amount and do not bear
interest. The allowance for doubtful accounts is the Company's best estimate of
the amount of probable credit losses in the Company's existing accounts
receivable. The Company determines the allowance based on historical write-off
experience by industry and national economic data. The Company reviews its
allowance for doubtful accounts monthly. Balances which are over 90 days past
due and exceed a specific amount are reviewed individually for collectibility.
Account balances are charged off against the allowance after all means of
collection have been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit exposure related
to its customers.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market value. Cost includes net prices paid for materials purchased, charges for
freight and custom duties, production labor costs and factory overhead. Precious
metals are valued at the market price at the balance sheet date. Variances in
market price from balance sheet date to balance sheet date are recorded in cost
of sales as gains or losses.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method, based on the
following estimated useful lives:

<TABLE>
<CAPTION>
CATEGORY                                               ESTIMATED USEFUL LIFE
--------                                               ---------------------
<S>                                                    <C>
Buildings                                                   15 - 30 years
Leasehold improvements (1))                                  5 - 10 years
Machinery and equipment                                      2 - 10 years
Office furniture and equipment                               3 - 10 years
</TABLE>

(1)) Leasehold improvements are amortized over the shorter of the lease term or
     economic life of the asset.

LEASES

Assets acquired under capital leases are included in the balance sheet at the
present value of the minimum future lease payments and are depreciated over the
shorter of the lease term or their estimated economic lives. A corresponding
liability is recorded at the inception of the capital lease and the interest
element of capital leases is charged to interest expense.

LONG-LIVED ASSETS

Long-lived assets, such as property, plant and equipment, and purchased
intangibles subject to amortization, are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to estimated undiscounted future
cash flows, an impairment charge is recognized by the amount by which the
carrying value of the asset exceeds the fair value of the asset. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell, and depreciation ceases.

GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the excess of the costs of purchased businesses over the
fair value of their net assets at date of acquisition and, through December 31,
2001, was being amortized by the straight-line method. The amortization of the
goodwill from the Meco

                                      F-12
<PAGE>

acquisition (13 years) and the RDA acquisition (13 years) was based on the
weighted average remaining lives of Meco's and RDA's patents as determined by an
independent valuation. Goodwill was assessed for recoverability by determining
whether the amortization of the goodwill balance over its remaining life could
be recovered through undiscounted future operating cash flows of the acquired
operation. As of January 1, 2002, goodwill is no longer amortized, but is
required to be evaluated for impairment at least annually in accordance with
SFAS No. 142. The amortization of patents and other identifiable intangible
assets is based on the weighted average remaining lives of 13 years for Meco,
RDA and Laurier and 16 years for Fico as determined by an independent valuation
at the date of acquisition.

The Company adopted the provisions of SFAS No. 141, "Business combinations" as
of July 1, 2001 and SFAS No. 142 as of January 1, 2002. Goodwill and any
intangible asset determined to have an indefinite useful life acquired in a
purchase business combination completed after June 30, 2001 and determined to
have an indefinite useful life are not amortized, but will continue to be
evaluated for impairment annually in accordance with SFAS No. 142.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142
required the Company to perform an assessment of whether there was an indication
that goodwill, and equity-method goodwill, is impaired as of the date of
adoption. To accomplish this, the Company was required to identify its reporting
units and determine the carrying value of each reporting unit by assigning the
assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units as of January 1, 2002. The Company was required to
determine the fair value of each reporting unit and compare it to the reporting
unit's carrying amount within six months of January 1, 2002. To the extent a
reporting unit's carrying amount exceeded its fair value, an indication existed
that the reporting unit's goodwill may be impaired and the second step of the
transitional impairment test had to be performed. In the second step, the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of its assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS No. 141, had to be compared to its carrying amount, both
of which would be measured as of the date of adoption. This second step was
required to be completed as soon as possible, but no later than the end of the
year of adoption. See further discussion of the goodwill transitional impairment
tests and the annual impairment tests in Note 7.

Goodwill and intangible assets not subject to amortization are tested annually
for impairment. An impairment loss is recognized to the extent that the carrying
amount exceeds the asset's fair value.

The Company does not have any identifiable assets with indefinite lives.

INVESTMENT IN AFFILIATED COMPANIES

Investment in unconsolidated affiliated companies, where the Company exercises
significant influence (generally a voting share of 20%-50%), are accounted for
under the equity method. Investment in affiliated companies also includes
goodwill relating to the investment.

INCOME TAXES

The Company applies SFAS No. 109 "Accounting for Income Taxes", which requires
the asset and liability method of accounting for taxes. Under the asset and
liability method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years which these temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. Deferred tax assets are reduced by a valuation
allowance to the amount that is more likely than not to be realized.

REVENUE RECOGNITION

Shipment of products occurs after a customer accepts the product at the
Company's premises.

Advance payments received from customers are recorded as a liability until the
products have been shipped. The Company recognizes revenues from sales of
products upon shipment. The risk of loss and rewards of ownership with respect
to products transfer to customers at that time. The sale of the product to the
customer is thereby considered complete and no significant obligations remain
after the sale is completed. A customer's sole recourse against the Company is
to enforce the Company's obligations relating to installation and warranty.
Operating expenses and other income and expense items are recognized in the
Consolidated Statements of Operations as incurred or earned.

WARRANTY EXPENSE

The Company records a liability for estimated warranty expense when
corresponding sales revenue is recognized, that is, at the time of shipment. The
amount recorded is based on a history of actual costs incurred and on estimated
probable costs related to such current sales.

RESEARCH AND DEVELOPMENT

Research and development costs are charged to expenses when incurred. Subsidies
and other governmental credits to cover research and development costs relating
to approved projects are recorded as research and development credits in the
period when the

                                      F-13
<PAGE>

research and development cost to which such subsidy or credit relates, occurs.
Technical development credits ("Technische Ontwikkelingskredieten" or "TOKs")
received from the Netherlands government to offset the costs of certain research
and development projects are contingently repayable to the extent sales of
equipment developed in such projects occur. Such repayments are calculated as a
percentage of sales revenue and are charged to research and development
expenses. No repayment is required if such sales do not occur (see Note 19).

PENSION COSTS

A majority of the employees in the Netherlands participate in a multi-employer
union plan which consists of defined benefit determined in accordance with the
respective collective bargaining agreements. All other pension plans are funded
with insurance companies based on a defined contribution plan. The Company has
no other liability regarding pensions other than payment of annual premiums,
which are charged against earnings.

STOCK OPTIONS

The Company accounts for stock based employee compensation plans under the
recognition and measurement principles of Accounting Principles Board Opinion
("APB") No. 25 "Accounting for Stock Issued to Employees", and related
interpretations in accounting for its plans. SFAS No. 123 "Accounting for
Stock-Based Compensation" allows companies to elect to either account for stock
options using fair value based method, or continue to account for stock option
plans under APB No. 25, and disclose pro forma disclosure of net loss and loss
per share as if SFAS No. 123 were applied. Under APB No. 25, no stock-based
employee compensation cost is reflected in net loss for the fixed stock options,
as all options granted under the Company's stock option plans had an exercise
price equal to the market value of the underlying ordinary shares on the date of
grant. The Company has elected to continue to account for its stock options
under the provisions of APB No. 25 and disclose the pro forma effect of SFAS No.
123.

                                      F-14
<PAGE>

The following table illustrates the effect on net loss and loss per share if the
Company had applied the fair value recognition provisions of SFAS No. 123 to
stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                       2001                  2002                  2003
(Amounts in thousands)                                                 EURO                  EURO                  EURO
----------------------                                                 ----                  ----                  ----
<S>                                                                  <C>                   <C>                   <C>
Net loss as reported                                                 (16,978)              (17,011)              (13,497)
Deduct: Stock-based employee compensation expense
   determined under fair value based method for all
   awards, net of related tax effects
                                                                      (1,040)               (1,407)               (1,036)
Add: Stock-based compensation expense included in net
   loss, net of related tax effect                                         -                     -                    26
                                                                     ---------------------------------------------------
Pro forma net loss                                                   (18,018)              (18,418)              (14,507)

BASIC LOSS PER SHARE:
As reported                                                            (0.53)                (0.54)                (0.44)
Pro forma                                                              (0.57)                (0.59)                (0.47)

DILUTED LOSS PER SHARE:
As reported                                                            (0.53)                (0.54)                (0.44)
Pro forma                                                              (0.57)                (0.59)                (0.47)
</TABLE>

CONCENTRATION OF CREDIT RISK

A relatively small number of customers account for a significant percentage of
the Company's net sales. The loss of a major customer or any reduction in orders
by such customers, including reductions due to market or competitive conditions,
would have a material adverse effect on the Company's business, financial
condition and results of operations. The Company's future success will depend in
part upon its ability to obtain orders from new customers, as well as the
financial condition and success of its customers and the worldwide economy in
general.

The Company's customers consist of semiconductor manufacturers located
throughout the world. The Company performs ongoing credit evaluations of its
customers' financial condition and generally requires no collateral to secure
accounts receivable. The Company maintains an allowance for doubtful accounts
based on an assessment of the collectibility of such accounts.

EARNINGS PER SHARE

Basic earnings per share have been computed using the weighted average number of
ordinary shares outstanding during the period. Diluted earnings per share have
been computed using the weighted average number of ordinary shares and
equivalents (representing the dilutive effect of stock options) outstanding
during the period.

USE OF ESTIMATES

The preparation of the Company's Consolidated Financial Statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the balance
sheet dates and the reported amounts of revenue and expense during the reported
periods. Actual results could differ from those estimates.

PRINCIPAL DIFFERENCES BETWEEN IFRS AND US GAAP

Beginning in 2005, the European Commission will require companies that are
quoted on a European stock market to publish their financial statements in
accordance with International Financial Reporting Standards ("IFRS"). While the
Company intends to continue publishing US GAAP financial statements, the Company
also will publish its Consolidated Financial Statements in accordance with IFRS
from January 1, 2005 onwards.

The Company is currently investigating the possible impact of differences
identified between IFRS and US GAAP. The principal differences currently
identified that might affect our net profit or loss, as well as shareholders'
equity, relate to treatment of development costs, stock option plans, financial
instruments and goodwill and intangible assets.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
143, "Accounting for asset retirement obligations". SFAS No. 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated retirement costs. It
requires that the Company recognizes the fair value of a liability for an asset
retirement obligation in the period in which it is incurred if a reasonable
estimate of fair value can be made. The Company adopted

                                      F-15
<PAGE>

SFAS No. 143 on January 1, 2003 and the adoption did not have a material impact
on the Company's Consolidated Financial Statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the impairment or
disposal of long-lived assets". SFAS No. 144 establishes a single accounting
model for the impairment of long-lived assets and broadens the presentation of
discontinued operations to include more disposal transactions. The Company
adopted SFAS No. 144 effective January 1, 2002 and the adoption did not have a
material impact on the Company's Consolidated Financial Statements.

In April 2002, the FASB issued SFAS No. 145, "Recission of SFAS No. 4, 44, and
64, Amendment of SFAS No. 13, and Technical Corrections". In rescinding SFAS No.
4 and 64, SFAS No. 145 eliminates the requirement that gains and losses from the
extinguishment of debt be aggregated and, if material, classified as an
extraordinary item, net of the related income tax effect, however, an entity
would not be prohibited from classifying such gains and losses as extraordinary
items so long as they meet the criteria of paragraph 20 of APB 30, Reporting the
results of operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. Further, the Statement amends SFAS No. 13 to eliminate an
inconsistency between the accounting for sale and leaseback transactions and
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. The standard is effective for transactions
occurring after May 15, 2002. The adoption of SFAS No. 145 did not have a
material impact on the Company's Consolidated Financial Statements.

In June 2002, the FASB issued SFAS 146, "Accounting for Exit or Disposal
Activities", which addresses significant issues regarding the recognition,
measurement, and reporting of costs that are associated with exit and disposal
activities, including restructuring activities that are currently accounted for
pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set
forth in EITF 94-3 "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring)". The standard is effective for exit or disposal activities
that are initiated after December 31, 2002. The Company adopted SFAS No. 146 on
January 1, 2003 and the adoption did not have a material impact on the Company's
Consolidated Financial Statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (hereinafter "the Interpretation"), which addresses,
among other things, the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under guarantees. The
Interpretation also requires the recognition of a liability by a guarantor at
the inception of certain guarantees. The Interpretation requires the guarantor
to recognize a liability for the non-contingent component of the guarantee, this
is the obligation to stand ready to perform in the event that specified
triggering events or conditions occur. The initial measurement of this liability
is the fair value of the guarantee at inception. The recognition of the
liability is required even if it is not probable that payments will be required
under the guarantee or if the guarantee was issued with a premium payment or as
part of a transaction with multiple elements. The Company has adopted the
disclosure requirements of the Interpretation as at December 31, 2002 and has
applied the recognition and measurement provisions for all guarantees entered
into or modified after December 31, 2002.

In November 2002, the EITF issued its consensus on EITF 00-21, "Revenue
Arrangements with Multiple Deliverables" on an approach to determine whether an
entity should divide an arrangement with multiple deliverables into separate
units of accounting. According to the EITF in an arrangement with multiple
deliverables, the delivered item(s) should be considered a separate unit of
accounting if all of the following criteria are met: (i) the delivered item(s)
has value to the customer on a standalone basis, (ii) there is objective and
reliable evidence of the fair value of the undelivered item(s), (iii) if the
arrangement includes a general right of return, delivery or performance of the
undelivered item(s) is considered probable and substantially in the control of
the vendor. If all the conditions above are met and there is objective and
reliable evidence of fair value for all units of accounting in an arrangement,
the arrangement consideration should be allocated to the separate units of
accounting based on their relative fair values. However, there may be cases in
which there is objective and reliable evidence of the fair value(s) of the
undelivered item(s) in an arrangement but no such evidence for one or more of
the delivered items. In those cases, the residual method should be used to
allocate the arrangement consideration. The guidance in this Issue is effective
for revenue arrangements entered into in fiscal years beginning after June 15,
2003. Alternatively, entities may elect to report the change in accounting as a
cumulative effect adjustment in accordance with APB Opinion 20, "Accounting
Changes". If so elected, disclosure should be made in periods subsequent to the
date of initial application of this consensus of the amount of recognized
revenue that was previously included in the cumulative effect adjustment. The
adoption of EITF 00-21 did not have a material impact on the Company's
Consolidated Financial Statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure - an amendment of FASB statement No.
123". SFAS No. 148 permits two additional transition methods for entities that
adopt the fair value based method of accounting for stock-based employee
compensation. The statement also requires new disclosures about the ramp-up
effect of stock-based employee compensation on reported results. The statement
also requires that those effects be disclosed more prominently by specifying the
form, content, and location of those disclosures. The transition guidance and
annual disclosure provisions of SFAS No. 148 are effective for fiscal years
ending after December 15, 2002, with earlier application permitted in certain
circumstances. The interim disclosure provisions are effective for financial
reports, containing financial statements for interim periods beginning after
December 15, 2002. The Company has adopted the annual disclosure requirements of
SFAS No.148 and such disclosure is reflected in the Consolidated Financial
Statements for the year ended December 31, 2003.

                                      F-16
<PAGE>

In January 2003, the FASB released FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). This Interpretation changes the method
of determining whether certain entities, including securitization entities,
should be included in a company's consolidated financial statements. An entity
is subject to FIN 46 and is called a Variable Interest Entity ("VIE") if it has
(i) equity that is insufficient to permit the entity to finance its activities
without additional subordinated financial support from other parties, or (ii)
equity investors that cannot make significant decisions about the entity's
operations, or that do not absorb the expected losses or receive the expected
returns of the entity. All other entities are evaluated for consolidation in
accordance with SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries".
A VIE is consolidated by its primary beneficiary, which is the party involved
with the VIE that has a majority of the expected losses or a majority of the
expected residual returns or both. A VIE includes entities that previously were
referred to as Special Purpose Entities ("SPEs"). The provisions of the
interpretation are to be applied immediately to VIEs created after January 31,
2003, and to VIEs in which an enterprise obtains an interest after that date.
For VIEs in which an enterprise holds a variable interest that it acquired
before February 1, 2003, FIN 46 applies in the first interim or fiscal period
beginning after December 15, 2003. For any VIE that must be consolidated under
FIN 46 that were created before February 1, 2003, the assets, liabilities and
non-controlling interest of the VIE would be initially measured at their
carrying amounts with any difference between the net amount added to the balance
sheet and any previously recognized interest being recognized as the cumulative
effect of an accounting change. If determining the carrying amounts is not
practicable, fair value at the date FIN 46 first applies may be used to measure
the assets, liabilities and non-controlling interest of the VIE. FIN 46 also
mandates new disclosures about VIEs, some of which are required to be presented
in financial statements issued after January 31, 2003. The Company is continuing
to evaluate the provisions of FIN 46. While the Company does not believe that
the Company has any VIEs that would be required to be consolidated, management
is nonetheless evaluating the provisions of FIN 46.

On April 30, 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities", which amends SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", to address (i)
decisions reached by the Derivatives Implementation Group, (ii) developments in
other Board projects that address financial instruments, and (iii)
implementation issues related to the definition of a derivative. SFAS No. 149 is
generally effective for contracts entered into or modified after June 30, 2003
and for hedging relationships designated after June 30, 2003. The adoption of
SFAS No. 149 did not have a material impact on the Company's Consolidated
Financial Statements.

On May 15, 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classifies a financial instrument that is within its
scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003, except for mandatorily redeemable financial instruments of non-public
entities. It is to be implemented by reporting the cumulative effect of a change
in an accounting principle for financial instruments created before the issuance
date of the Statement and still existing at the beginning of the interim period
of adoption. Restatement is not permitted. For non-public entities, mandatorily
redeemable financial instruments are subject to the provisions of SFAS No. 150
for the first fiscal period beginning after December 15, 2003. The adoption of
SFAS No. 150 did not have a material impact on the Company's Consolidated
Financial Statements.

                                      F-17
<PAGE>

3      ACCOUNTS RECEIVABLE

Accounts receivable, net consist of the following:

<TABLE>
<CAPTION>
                                                                December 31,
                                                        ---------------------------
                                                         2002                 2003
                                                         EURO                 EURO
                                                        ---------------------------
<S>                                                     <C>                  <C>
Accounts receivable                                     31,150               19,742
Allowance for doubtful accounts                         (2,912)              (1,785)

                                                        ---------------------------
Total accounts receivable, net                          28,238               17,957
                                                        ===========================
</TABLE>

A summary of activity in the allowance for doubtful accounts is as follows:

<TABLE>
<CAPTION>
                                                                        2001                2002                 2003
                                                                        EURO                EURO                 EURO
                                                                       ----------------------------------------------
<S>                                                                    <C>                <C>                   <C>
Balance at January 1,                                                  2,524               4,502                2,912
Provision (release) for allowance for doubtful accounts
                                                                       2,014              (1,364)                (894)
Addition due to acquisition of subsidiary                                  -                  52                    -
Accounts receivable written off                                          (36)               (173)                (127)
Foreign currency translation                                               -                (105)                (106)

                                                                       ----------------------------------------------
Balance at December 31,                                                4,502               2,912                1,785
                                                                       ==============================================
</TABLE>

4      INVENTORIES

Inventories, net consist of the following:

<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                         ----------------------------
                                                                                           2002                  2003
                                                                                           EURO                  EURO
                                                                                         ----------------------------
<S>                                                                                      <C>                   <C>
Precious metals                                                                              20                    27
Raw materials                                                                            12,106                11,448
Work in progress                                                                         18,142                13,401
Finished goods                                                                            3,156                 3,004

                                                                                         ----------------------------
Total inventories, net                                                                   33,424                27,880
                                                                                         ============================
</TABLE>

                                      F-18
<PAGE>

A summary of activity in the allowance for obsolescence is as follows:

<TABLE>
<CAPTION>
                                                                        2001                2002                 2003
                                                                        EURO                EURO                 EURO
                                                                       ----------------------------------------------
<S>                                                                    <C>                <C>                   <C>
Balance at January 1,                                                  3,713               5,950                5,198
Provision for loss on obsolete inventory                               2,541                 707                3,362
Addition due to acquisition of subsidiary                                  -                 215                    -
Inventory written off                                                   (315)             (1,437)                (857)
Foreign currency translation                                              11                (237)                (271)

                                                                       ----------------------------------------------
Balance at December 31,                                                5,950               5,198                7,432
                                                                       ==============================================
</TABLE>

5      OTHER CURRENT ASSETS

Other current assets consist of the following:

<TABLE>
<CAPTION>
                                                                                                   December 31,
                                                                                           --------------------------
                                                                                            2002                 2003
                                                                                            EURO                 EURO
                                                                                           --------------------------
<S>                                                                                        <C>                  <C>
VAT receivables                                                                            2,233                1,618
Income taxes                                                                               2,242                4,732
Subsidies and development credits receivable                                                 158                  108
Interest receivable                                                                          875                1,103
Deposits                                                                                     197                  105
Prepaid expenses                                                                           1,028                1,053
Deferred tax assets                                                                          389                  110
Other                                                                                        565                  610

                                                                                           --------------------------
Total other current assets                                                                 7,687                9,439
                                                                                           ==========================
</TABLE>

                                      F-19
<PAGE>

6      PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consist of the following:

<TABLE>
<CAPTION>
                                                Land, buildings                        Office
                                                 and leasehold       Machinery      furniture and     Assets under
                                                 improvements      and equipment     equipment        construction        Total
                                                -------------------------------------------------------------------------------
                                                    EURO               EURO             EURO             EURO              EURO
                                                -------------------------------------------------------------------------------
<S>                                             <C>                   <C>              <C>               <C>             <C>
Balance at January 1, 2003:
Cost                                               14,759              24,687           16,748            2,566           58,760
Accumulated depreciation                           (5,073)            (17,000)         (13,584)               -          (35,657)

                                                   -----------------------------------------------------------------------------
Property, plant and equipment, net                  9,686               7,687            3,164            2,566           23,103

Changes in book value in 2003:
Investments                                         5,994               5,977            1,320           (1,402)          11,889
Disposals                                              (2)               (101)             (40)               -             (143)
Depreciation                                         (537)             (1,883)          (1,527)               -           (3,947)
Foreign currency translation                         (314)               (361)             (83)             (44)            (802)

                                                   -----------------------------------------------------------------------------
Total changes                                       5,141               3,632             (330)          (1,446)           6,997

Balance at December 31, 2003:
Cost                                               20,363              29,435           17,255            1,120           68,173
Accumulated depreciation                           (5,536)            (18,116)         (14,421)               -          (38,073)

                                                   -----------------------------------------------------------------------------
Property, plant and equipment, net                 14,827              11,319            2,834            1,120           30,100
                                                   =============================================================================
</TABLE>

The Company has obligations under various capital and operating leases,
primarily for land and buildings, manufacturing and office facilities and
equipment. Assets under capital leases included in property, plant and equipment
consist of the following:

<TABLE>
<CAPTION>
                                                                      December 31,
                                                             ---------------------------
                                                               2002                 2003
                                                               EURO                 EURO
                                                             ---------------------------
<S>                                                          <C>                  <C>
Land and buildings                                            9,453                9,453
Machinery, equipment and office furniture                       215                   54
Accumulated depreciation                                     (1,588)              (1,806)

                                                             ---------------------------
Total                                                         8,080                7,701
                                                             ===========================
</TABLE>

The legal ownership of the assets under capital leases lies at a third party,
however, the Company maintains economic ownership.

7      GOODWILL, PATENTS AND TRADEMARKS

As of January 1, 2002, the Company adopted SFAS No. 142 and SFAS No. 144. SFAS
No. 142 eliminates the amortization of goodwill and indefinite-lived intangible
assets, addresses the amortization of intangible assets with finite lives and
addresses impairment testing and recognition for goodwill and intangible assets
with indefinite lives. SFAS No. 144 establishes a single model for the
impairment of long-lived assets and broadens the presentation of discontinued
operations to include disposal of an individual business. As a result of the
adoption of SFAS No. 142, goodwill amortization ceased as of January 1, 2002.

The Company reviewed its business and determined that there were four reporting
units to be reviewed for impairment in accordance with the standard. The
reporting units were: packaging equipment, plating and singulation equipment,
flip chip die attach equipment and die sorting equipment. Upon adoption of SFAS
No. 142 in the first quarter of 2002, the Company completed the required
transitional impairment testing of goodwill, and based upon those analyses, did
not identify any impairment charges as a result of adoption of this standard
effective January 1, 2002.

The Company has determined that its annual test for impairment of goodwill will
take place at the end of the fourth quarter of each year, which coincides with
the completion of its annual forecasting process. In the third quarter of 2002,
the Company consolidated

                                      F-20
<PAGE>

its flip chip die attach equipment business and die sorting equipment business
into a single reporting unit, die handling equipment. Due to the severity and
the length of the current industry downturn and uncertainty of the timing of
improvement in industry conditions, the Company revised its earnings forecasts
for each of its business units that were tested for impairment in the fourth
quarter of fiscal year 2002. As a result, the Company recognized a goodwill
impairment loss of (euro) 3,302 in the die handling equipment reporting unit.
The fair value of each reporting unit was estimated using the expected present
value of future cash flows.

In the fourth quarter of 2003, the Company tested its intangibles for
impairment. As a result of this impairment test, an impairment of patents of die
handling equipment to an amount of (euro) 287 was recorded. No impairment on
other intangibles was required.

The Company does not have any identifiable assets with indefinite lives.

                                      F-21
<PAGE>

Goodwill, patents and trademarks, net consist of the following:

<TABLE>
<CAPTION>
                                                            Goodwill         Patents      Trademarks            Total
                                                            ---------------------------------------------------------
                                                              EURO             EURO          EURO               EURO
                                                            ---------------------------------------------------------
<S>                                                         <C>              <C>          <C>                 <C>
Balance at January 1, 2003:
Cost                                                          22,690          35,172             708           58,570
Accumulated amortization                                      (8,000)        (18,717)           (127)         (26,844)

                                                              -------------------------------------------------------
Goodwill, patents and trademarks                              14,690          16,455             581           31,726

Changes in book value in 2003:
Amortization                                                       -          (2,472)            (50)          (2,522)
Impairment of intangibles                                          -            (287)              -             (287)
Foreign currency translation                                  (1,844)           (560)            (92)          (2,496)

                                                              -------------------------------------------------------
                                                              (1,844)         (3,319)           (142)          (5,305)

Balance at December 31, 2003:
Cost                                                          20,144          34,478             591           55,213
Accumulated amortization                                      (7,298)        (21,342)           (152)         (28,792)

                                                              -------------------------------------------------------
Goodwill, patents and trademarks                              12,846          13,136             439           26,421
                                                              =======================================================
</TABLE>

Aggregate amortization expense for the year ended December 31, 2003 was (euro)
2.5 million. Estimated amortization expense for each of the next five years is
(euro) 2.5 million per year.

The following table reflects the impact that SFAS No. 142 would have had on net
loss and loss per ordinary share if it had been adopted at the beginning of
2001:

<TABLE>
<CAPTION>
                                                              2001
                                                              EURO
                                                            -------
<S>                                                         <C>
Reported net loss                                           (16,978)
Ceased goodwill amortization                                  1,062

                                                            -------
Adjusted net loss                                           (15,916)

Reported loss per share - basic and diluted                   (0.53)
Ceased goodwill amortization                                   0.03

                                                            -------
Adjusted loss per share - basic and diluted                   (0.50)
                                                            =======
</TABLE>

                                      F-22
<PAGE>

8        INVESTMENT IN AFFILIATED COMPANIES

The Company sold its 30% equity interest in PBE on November 15, 2001, for (euro)
18.1 million cash. As a result, the investment in affiliated companies as of
December 31, 2002 and 2003 is nil.

The Company's equity in loss of affiliated companies and loss on sale of
affiliated companies consists of the 30% interest of the company in the results
of PBE:

<TABLE>
<CAPTION>
                                                                  January 1 to
                                                                  November 15,
                                                                  ------------
                                                                      2001
                                                                      EURO
                                                                  --------------
<S>                                                               <C>
Equity in loss of affiliated companies                              (10,372)
Amortization of goodwill                                             (1,137)
Loss on sale of affiliated companies                                 (4,805)

                                                                    -------
Equity in loss of affiliated companies and loss on sale of
affiliated companies, net                                           (16,314)
                                                                    =======
</TABLE>

The loss on sale of affiliated companies of PBE included the reversal of the
portion of the cumulative translation adjustment component of shareholders'
equity relating to the investment in PBE, which reduced the loss by (euro) 5.3
million.

The following table presents condensed financial information of results of
operations of PBE:

<TABLE>
<CAPTION>
                                                      January 1, to
                                                       November 15,
                                                      -------------
                                                          2001
                                                          EURO
                                                          ----
<S>                                                    <C>
Net sales                                              155,916
Gross profit                                            16,944
Operating loss                                         (31,013)
Net loss before minority interest                      (34,216)
Net loss                                               (34,572)
                                                       =======
</TABLE>

In December 2001, subsequent to the sale of the Company's 30% interest in PBE on
November 15, 2001, the Board of Directors of PBE announced a change in
accounting principle. This change, relating to the depreciation method of
certain fixed assets, resulted in a one-time charge of (euro) 5.8 million in the
results of PBE in 2001. PBE has, in compliance with US GAAP, disclosed the
impact of this accounting change as a cumulative effect of a change in
accounting principle computed as of January 1, 2001. Also, as required by US
GAAP, the results of operations of PBE for its fiscal year ended December 31,
2001, were prepared on the basis of the newly adopted accounting principle.

Subsequent to the sale of its 30% interest in PBE, the Company no longer had any
representation on the board of directors of PBE nor any other rights or
responsibilities regarding PBE. As a result, PBE's December 2001 change in
accounting principle is treated as a post-disposal subsequent event and the
Company's proportionate share of this change has not been included in the
Consolidated Statements of Operations. The Company's proportionate share in the
results of PBE in the accompanying financial statements is presented on the
basis of PBE's former accounting principle. The inclusion of the impact of this
change in accounting principle in the Consolidated Financial Statements of the
Company would not affect the net loss of the Company for the year 2001, as the
Company sold its 30% interest in PBE on November 15, 2001, and accordingly, the
impact of the change in accounting principle would have resulted in an equal and
offsetting adjustment in the loss on the sale of PBE recorded by the Company.

The sum of the Company's 30% share of PBE's cumulative effect of change in
accounting principle and the 2001 impact of the newly adopted accounting
principle of (euro) 1.7 million would have resulted in an equal and offsetting
adjustment in the loss on the sale of PBE at November 15, 2001.

The following table summarizes related party transactions with PBE:

                                      F-23
<PAGE>

<TABLE>
<CAPTION>
                                                    January 1, to
                                                     November 15,
                                                    -------------
                                                         2001
                                                         EURO
                                                         ----
<S>                                                     <C>
Sales                                                   3,486
Purchases                                                 270
                                                        =====
</TABLE>

9      DEFERRED INCOME TAXES

The items giving rise to the deferred tax liabilities, net were as follows:

<TABLE>
<CAPTION>
                                                               December 31,
                                                       ---------------------------
                                                         2002                 2003
                                                         EURO                 EURO
                                                       ---------------------------
<S>                                                    <C>                  <C>
Deferred tax assets
- Operating loss carry forwards                         3,398                5,001
- Intercompany interest                                 1,672                1,905
- Intangible assets                                     3,206                2,158
- Inventories                                             724                  898
- Provisions                                              672                  272
- Other items                                             133                  264
                                                       ---------------------------
Total deferred tax assets, gross                        9,805               10,498
- Valuation allowance                                  (8,859)              (9,834)
                                                       ---------------------------
Total deferred tax assets, net                            946                  664

Deferred tax liabilities
- Intangible assets                                    (4,811)              (3,882)
- Other items                                              (3)                  (2)
                                                       ---------------------------
Total deferred tax liabilities                         (4,814)              (3,884)

Total deferred tax assets (liabilities)                (3,868)              (3,220)
                                                       ===========================

Deferred tax assets
- Current                                                 389                  110
- Non-current                                             557                  554
                                                       ---------------------------
                                                          946                  664

Deferred tax liabilities
- Current                                                (775)                (772)
- Non-current                                          (4,039)              (3,112)
                                                       ---------------------------
                                                       (4,814)              (3,884)

                                                       ---------------------------
Total deferred tax assets (liabilities)                (3,868)              (3,220)
                                                       ===========================
</TABLE>

The deferred tax assets for operating loss carry forwards are related to the US
and Japanese operations of the Company. Under applicable US tax law, the carry
forwards related to the Company's US operating losses of (euro) 12.0 million
expire during the periods of 2010 through 2023. The carry forwards related to
the Company's Japanese operating losses amounting to (euro) 1.4 million expire
during the periods of 2004 through 2008, of which (euro) 0.2 million will expire
in 2004.

A summary of activity in the valuation allowance on the deferred tax assets is
as follows:

<TABLE>
<CAPTION>
                                                                        2001                2002                2003
                                                                        EURO                EURO                EURO
                                                                       ----------------------------------------------
<S>                                                                    <C>                 <C>                  <C>
Balance at January 1,                                                  1,161               1,677                8,859
Provision for allowance on deferred tax assets
                                                                         492               7,214                2,777
Release due to expiration of net operating losses
carried forward                                                            -                   -                  (98)
Foreign currency translation                                              24                 (32)              (1,704)

                                                                       ----------------------------------------------
Balance at December 31,                                                1,677               8,859                9,834
                                                                       ==============================================
</TABLE>

                                      F-24
<PAGE>

The increase in the total valuation allowance for the year ended December 31,
2001, 2002 and 2003 was (euro) 516, (euro) 7,182 and (euro) 975, respectively,
principally due to uncertainty regarding the realization of the deferred tax
assets of the Company's US and Japanese subsidiaries through future taxable
income.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. In the fourth quarter of
fiscal year 2002, as part of the income tax provision for the period, the
Company recorded a charge of (euro) 6.0 million to establish a valuation
allowance against its deferred tax asset consisting primarily of US net
operating loss carry forwards and temporary differences. The Company determined
that the valuation allowance was required based on recent US tax losses, which
were given substantially more weight than forecasts of future profitability in
the Company's evaluation of whether it is more likely than not that the US net
operating loss carry forwards will be realized. Until the Company utilizes these
US operating loss carry forwards, its income tax provision will reflect mainly
domestic taxation. The US tax assets arising in 2003 have been written down to
nil.

The deferred tax liabilities for intangible assets relate to temporary
differences of intangible assets of Fico, Meco and Besi Die Handling.

                                      F-25
<PAGE>

10    SHORT-TERM DEBT

At December 31, 2003, Fico had credit facilities of (euro) 7,487 with ING Bank
N.V. to meet working capital needs. At December 31, 2002 and 2003, no borrowings
were outstanding under the revolving credit facilities. However, the amount that
was available to be drawn under the line was reduced by (euro) 161 and (euro) 74
at December 31, 2002 and 2003, respectively, in outstanding bank guarantees. The
credit facility agreement includes covenants requiring Fico to maintain certain
financial ratios.

At December 31, 2003, Meco had credit facilities of (euro) 5,899 with SNS Bank
Nederland N.V. to meet working capital needs. At December 31, 2002 and 2003, no
borrowings were outstanding under the revolving credit facilities. However, the
amount that was available to be drawn under the line was reduced by (euro) 162
and (euro) 0 as of December 31, 2002 and 2003, respectively, in outstanding bank
guarantees, and (euro) 1,001 and (euro) 483 as of December 31, 2002 and 2003,
respectively, for foreign exchange contracts and check payments facilities. The
credit facility agreement includes covenants requiring Meco to maintain certain
financial ratios.

The Company was in compliance with, or had received waivers for, all loan
covenants at December 31, 2002 and 2003.

11    ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                          December 31,
                                                      -------------------
                                                        2002        2003
                                                        EURO        EURO
                                                      -------      ------
<S>                                                   <C>          <C>
Advances from customers                                4,234        1,563
Warranty provision                                     2,446        1,753
Income taxes                                              32           61
Other taxes and social security                          516          631
Salaries and payroll related items                     3,272        2,894
Accrued commissions                                    1,024          777
Development credits payable                              528          577
Restructuring                                          1,281          521
Provision for purchase obligations                         -          645
Deferred tax liabilities                                 775          772
Other                                                  3,164        4,270
                                                      ------       ------
Total accrued liabilities                             17,272       14,464
                                                      ======       ======
</TABLE>

A summary of activity in the warranty provision is as follows:

<TABLE>
<CAPTION>
                                            2001       2002         2003
                                            EURO       EURO         EURO
                                           -------    ------       ------
<S>                                        <C>        <C>          <C>
Balance at January 1,                        4,529     3,102        2,446
Provision (release) for loss on warranty       929       853         (368)
Addition due to acquisition of subsidiary        -       127            -
Cost for warranty                           (2,360)   (1,613)        (292)
Foreign currency translation                     4       (23)         (33)
                                           -------    ------       ------

Balance at December 31,                      3,102     2,446        1,753
                                           =======    ======       ======
</TABLE>

12    RESTRUCTURING CHARGES

In the second, third and fourth quarters of 2001, the Company adopted
restructuring plans that included a total reduction of its global workforce
(including temporary workers) by approximately 26%. These actions were
necessitated by the semiconductor industry downturn that has resulted in a
significant reduction in new orders received by the Company. These actions were
taken (i) to better align the Company's cost structure with anticipated revenues
and (ii) to improve manufacturing efficiency and productivity. In 2001, the
Company recorded pre-tax restructuring charges of (euro) 8.3 million ((euro) 5.5
million after tax) in connection with this reduction in workforce.

In the third quarter of 2002, the Company relocated its flip chip die attach
operations from New Jersey to New Hampshire in the United States and
consolidated these activities with its die sorting activities to form a single
die handling systems business unit.

                                      F-26
<PAGE>

Furthermore, in the fourth quarter of 2002, the Company adopted a restructuring
plan that reduced the workforce of its die handling systems business unit by
approximately 28%. The Company recorded a pre-tax restructuring charge of E 0.8
million (E 0.6 million after tax) in connection with this relocation and
reduction in workforce at its die handling systems' business.

Changes in the restructuring reserve were as follows:

<TABLE>
<CAPTION>
                                          2001     2002    2003
                                          EURO     EURO    EURO
                                          ----     ----    ----
<S>                                      <C>      <C>      <C>
Balance at January 1,                         -    5,487   1,281
Additions                                 8,306    1,991       -
Releases                                      -   (1,201)      -
Impairment on assets                          -     (107)      -
Cash payments                            (2,819)  (4,889)   (760)
                                         ------   ------   -----
Balance at December 31,                   5,487    1,281     521
                                         ======   ======   =====
</TABLE>

The 2001 provision for the reduction in workforce included severance and other
benefits for approximately 180 employees in the Netherlands and Asia. The
additions to the restructuring reserve in 2002 related to higher than expected
severance cost, later than expected final employment terminations and severance
payments for the reduction in workforce in the United States and relocation
cost. The releases in 2002 mainly relate to social security expenses and
disabled personnel included for which we were not obliged to pay. Total
remaining cash outlays for restructuring activities are expected to be E 0.5
million, which relate mainly to pension premiums to be paid for laid off
employees over a period of two to five years.

13    DEFERRED GAIN ON SALE AND LEASE BACK

On June 28, 2002, the Company sold the land and buildings of one of its
subsidiaries in a sale and lease back transaction for (euro) 6.5 million in
cash. At the date of this transaction, the cost of the land and buildings
totaled (euro) 6.9 million and the net book value of this real estate amounted
to (euro) 5.4 million. The Company's gain on this transaction of (euro) 1.1
million will be amortized and netted against rental expenses over the twelve and
a half-year term of the operating lease. Gross rental expenses total (euro) 0.6
million per annum. The total deferred gain on the sale and lease back as of
December 31, 2002 and 2003 amounts to (euro) 1,012 and (euro) 927, respectively.

14    LONG-TERM DEBT AND CAPITAL LEASES

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                                ------------------
                                                                                 2002        2003
                                                                                 EURO        EURO
                                                                                -------    -------
<S>                                                                             <C>        <C>
A. Long-term loan from De Nationale Investerings Bank
       N.V. ("NIB"), fixed interest rate at 8.85%                                 1,270        635

B. Subordinated debt, fixed interest rate at 9.125%                                 320          -

C. Capital lease of property Duiven, the Netherlands, Interest rate
     Interbancair rate + 0.9% (Interest rate
     at 4.1% at December 31, 2003)                                                7,450      7,173

D. Long-term loan from Industrial & Commercial Bank of China, Leshan,
     China (Average interest rate at
     3.04% at December 31, 2003)                                                      -      1,061

   Capital leases at various interest rates                                           -         10
                                                                                -------    -------
                                                                                  9,040      8,879

   Less: current portion                                                         (1,228)      (934)
                                                                                -------    -------
   Total long-term debt and capital leases                                        7,812      7,945
                                                                                =======    =======
</TABLE>

                                      F-27
<PAGE>



A.    Principal payments of (euro) 159 are due quarterly and commenced on March
      20, 2000. This term loan includes covenants requiring Fico to maintain
      certain financial ratios and to meet other non-financial requirements. The
      Company was in compliance with all applicable covenants at December 31,
      2002 and 2003.

B.    Final installments have been made in 2003.

C.    The Company leases a building in Duiven, the Netherlands. The lease
      commenced in July 1997 and has a term of 15 years. The lease payment
      includes a variable interest rate component and was (euro) 145 per quarter
      as of December 31, 2003. After 15 years the Company has the right to buy
      the building for (euro) 5.1 million.

D.    The long-term loan consist of a loan of (euro) 290 denominated in Renminbi
      and two loans totaling (euro) 771 denominated in US Dollar for the
      financing of the Company's activities in China. The interest rate is fixed
      for one year and amounts to 5.31% and 2.19%, respectively. Total repayment
      is due in September 2006. The loan is secured by a mortgage on the
      Company's premises in Leshan, China.

                                      F-28
<PAGE>

Aggregate required principal payments due on long-term debt and capital leases
are as follows:

<TABLE>
<CAPTION>
                                                          Long-term debt   Capital leases
                                                               EURO             EURO
                                                          --------------   --------------
<S>                                                       <C>              <C>
2004                                                            645              579
2005                                                              -              579
2006                                                          1,061              579
2007                                                              -              579
2008                                                              -              579
2009 and thereafter                                               -            6,320
                                                              -----          -------
Total                                                         1,706            9,215
Less: imputed interest                                                        (2,042)
Less: current portion of capitalized lease obligation                           (289)
                                                                             -------
Non-current portion of capitalized lease obligation                            6,884
                                                                             =======
</TABLE>

15    EMPLOYEE BENEFITS

PENSION PLANS

The employees of the Dutch subsidiaries of BE Semiconductor Industries N.V.
participate in a multi-employer union plan which consists of defined benefit
determined in accordance with the respective bargaining agreements.
Contributions under this multi-employer union plan were (euro) 3,441 in 2001,
(euro) 2,935 in 2002 and (euro) 3,354 in 2003. Contribution for defined
contribution plans, which provide retirement benefits that cover substantially
all other employees were (euro) 414 in 2001, (euro) 490 in 2002 and (euro) 200
in 2003. The Company has no continuing obligations other than the annual
payments.

The Company's US, Malaysian, Korean, Japanese and Chinese subsidiaries have
retirement plans that are integrated with and supplement the governmental
benefits provided in the laws of the United States of America, Malaysia, Korea,
Japan and China, respectively.

EMPLOYEE STOCK OPTION PLANS

In 1995, the Company established the BE Semiconductor Industries Incentive Plan
1995 (the "Incentive Plan 1995"). The Company granted 1,101,236 options on
ordinary shares ("1995 Plan Shares") under the Incentive Plan 1995. During the
years from 1995 to 2001, the Company made awards under the Incentive Plan 1995
to executive officers and senior employees of the Company. Options granted
between 1999 and 2001 vest after three years. The Incentive Plan 1995 expired in
2001. Stock options granted under the Incentive Plan 1995 have exercise prices
which were equal to the market price of the Company's ordinary shares on the
date of grant.

In 2001, the Company established the BE Semiconductor Industries Incentive plan
2001 - 2005 (the "Incentive Plan 2001"). The total number of ordinary shares
("2001 Plan Shares") that the Company may issue under the Incentive Plan 2001,
may not exceed 1.5% of the total number of ordinary shares outstanding in the
applicable fiscal year, subject to adjustments for share splits, share
dividends, recapitalizations and similar events. 2001 Plan Shares may consist,
in whole or in part, of unauthorized and unissued ordinary shares or treasury
shares. The Company anticipates that it will, on an annual basis, make awards
under the Incentive Plan 2001 to executive officers and senior employees of the
Company. Options granted in 2002 and 2003 vest after three years. Stock options
granted under the Incentive Plan 2001 will have exercise prices equal to the
market price of the Company's ordinary shares on the date of grant.

In the years 2000 through 2003, the Company granted stock options to all of its
employees. The options vest after three years and have exercise prices equal to
the market price of the Company's ordinary shares on the date of grant. These
options receive variable accounting treatment. All other options granted by the
Company receive fixed accounting treatment.

The Company accounts for stock-based compensation using the intrinsic value
method. Accordingly, no compensation has been recorded for the stock options
granted during 2001, 2002 and 2003, which received fixed accounting treatment.
For the stock options granted in 2001, 2002 and 2003 that receive variable
accounting treatment, an amount of (euro) 26, net of tax, was recognized as
compensation cost based on the market value of the Company's ordinary shares as
of December 31, 2003.

FINANCING OF STOCK OPTION PLANS

Option plans that were issued in 1999 and 2000 were constructed with a virtual
financing arrangement whereby Besi financed the fiscal value of the options
granted to employees subject to the Dutch tax-regime. The loans issued under
this arrangement are repayable to Besi on the exercised date of the respective
option, provided that the option was actually exercised. If the options

                                      F-29
<PAGE>

expire unexercised, the respective loans are forgiven. Besi accrues a liability
for the respective fiscal implication of this arrangement.

Following is a summary of changes in Besi options:

<TABLE>
<CAPTION>
                                         2001                  2002                  2003
                                            Weighted               Weighted             Weighted
                                            average                average              average
                                            exercise               exercise             exercise
                                 Number of   price     Number of    price    Number of   price
                                  options     EURO      options      EURO     options     EURO
                                 ---------  --------   ---------   -------   ---------  -------
<S>                              <C>        <C>        <C>         <C>       <C>        <C>
Fixed option plans
Outstanding, beginning of year
                                   597,186     13.18     821,896     12.10    929,095     11.56
Options granted                    253,066      9.51     223,337      9.32    162,905      3.46
Options expired                          -         -     (51,692)    11.28    (53,598)    10.05
Options forfeited                  (28,356)    11.90     (64,446)    10.90    (62,634)    12.14
                                 ---------  --------   ---------     -----    -------     -----
Outstanding, end of year           821,896     12.10     929,095     11.56    975,768     10.25
                                 =========  ========   =========     =====    =======     =====

Exercisable, end of year           181,284     12.12     190,798     11.74    431,366     13.48
                                 =========  ========   =========     =====    =======     =====

Variable option plans

Outstanding, beginning of year
                                         -         -      67,983      9.55    122,710      9.23
Options granted                     73,786      9.55      67,627      8.94     48,466      3.22
Options forfeited                   (5,803)     9.55     (12,900)     9.44     (7,071)     7.26
                                 ---------  --------   ---------     -----    -------     -----
Outstanding, end of year            67,983      9.55     122,710      9.23    164,105      7.54
                                 =========  ========   =========     =====    =======     =====

Exercisable, end of year                 -         -           -         -          -         -
                                 =========  ========   =========     =====    =======     =====
</TABLE>

Stock options outstanding and exercisable at December 31, 2003:

<TABLE>
<CAPTION>
                                   Options outstanding                       Options exercisable
                                   -------------------                       -------------------
                                         Weighted
                                          average          Weighted                     Weighted
                                         remaining     average exercise             average exercise
                         Number of   contractual life      price in      Number of     price in
Range of exercise price   options         (years)            EURO         options          EURO
-----------------------  ---------   ----------------  ----------------  ---------  ----------------
<S>                      <C>         <C>               <C>               <C>        <C>
Fixed option plans

(euro) 3.22               144,339        5.25              3.22                -            -
(euro) 5.20 -E7.70         50,200        2.28              6.30           37,200         6.35
(euro) 8.94 -E10.31       529,063        3.54              9.69          142,000         9.80
(euro) 14.65 -E17.90      252,166        2.44             16.61          252,166        16.61
                          =======        ====             =====          =======        =====

Variable option plans

(euro) 3.22                46,266        5.25              3.22                -            -
                          -------        ----             -----          -------        -----
(euro) 8.94 -E10.31       117,839        3.86              9.55                -            -
                          =======        ====             =====          =======        =====
</TABLE>

The fair value of the Company's option awards to employees was estimated using
the Black-Scholes option-pricing model assuming no dividends, vesting after
three years and the following weighted average assumptions:

                                      F-30
<PAGE>

<TABLE>
<CAPTION>
                                       2001    2002      2003
                                      -----    -----     -----
<S>                                   <C>      <C>       <C>
Expected life (years)                   5.8     5.7       5.7
Expected stock price volatility        54.1%   55.2%     55.0%
Risk-free rate                          5.0%    4.9%      3.7%
</TABLE>

The per share weighted average fair value of options granted during 2001, 2002
and 2003 was (euro) 5.40, (euro) 5.30 and (euro) 1.85, respectively.

16    SHARE CAPITAL

As of December 31, 2002 and December 31, 2003, the Company's authorized capital
consisted of 55,000,000 ordinary shares, nominal value of (euro) 0.91 per share,
and 55,000,000 preference shares, nominal value (euro) 0.91 per share. At
December 31, 2002 and December 31, 2003, 30,898,228 and 30,794,660 ordinary
shares, respectively, were outstanding. No preference shares were outstanding at
December 31, 2002 and December 31, 2003.

On June 17, 2002, the Company announced that it had adopted a plan to repurchase
up to 1,000,000 of the Company's ordinary shares from time to time. As of March
10, 2003, the Company had repurchased all 1,000,000 ordinary shares authorized
under the repurchase program at an average price of (euro) 5.22 per share.
During 2003, the Company repurchased 103,568 ordinary shares at an average price
of (euro) 3.35 per share.

                                      F-31
<PAGE>

17    FINANCIAL INSTRUMENTS

FOREIGN EXCHANGE

Due to the international scope of the Company's operations, the Company is
exposed to the risk of adverse movements in foreign currency exchange rates. The
Company is primarily exposed to fluctuations in the value of the euro against
the US dollar and dollar-linked currencies, since approximately 28% of the
Company's sales are denominated in US dollar and dollar-linked currencies.

The Company seeks to protect itself from adverse movements in foreign currency
exchange rates by hedging firmly committed sales contracts, which are
denominated in US dollars or Japanese yen through the use of forward foreign
currency exchange contracts. In addition, the Company also uses forward foreign
currency exchange contracts to hedge accounts receivable that are denominated in
a foreign currency. During 2002 and 2003, the Company did not have any
derivative financial instruments that were held for trading or speculative
purposes or that qualify as cash flow hedges. Forward exchange contracts used to
hedge the foreign currency exposure resulting from assets and liabilities
denominated in currencies other than the functional currency are accounted for
as fair value hedges.

The Company has exposure to credit risk to the extent that the counterparty to
the transaction fails to perform according to the term of the contract. The
amount of such credit risk, measured as the fair value of all forward foreign
currency exchange contracts that have a positive fair value position, was E 658
and E 551 at December 31, 2002 and 2003, respectively. The Company believes that
the risk of significant loss from credit risk is remote, because it deals with
credit-worthy financial institutions. The Company does not, in the normal course
of business, demand collateral from the counterparties.

The following is a summary of the Company's forward foreign currency exchange
contracts:

<TABLE>
<CAPTION>
                                    December 31,
                                  ---------------
                                   2002     2003
                                   EURO     EURO
                                  -----     -----
<S>                               <C>       <C>
To sell US dollars for euro       8,898     8,984
To buy euro for Japanese yen          -     1,052
                                  =====     =====
</TABLE>

At December 31, 2002 and 2003, unrealized gains on forward foreign currency
exchange contracts that were designated as a hedge of firmly committed
transactions amounted to (euro) 685 and (euro) 557, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The book value of the Company's financial instruments, which consist of cash and
cash equivalents, accounts receivable, accounts payable and long-term debt,
approximate their fair value due to the short maturity of those instruments and
to the fact that interest rates are floating or approximate the rates currently
available to the Company.

The fair value of the Company's forward foreign currency exchange contracts,
which are estimated using pricing models based on the discounted cash flow
method, had a positive value of (euro) 658 at December 31, 2002 and a positive
value of (euro) 526 at December 31, 2003, respectively.

Foreign currency losses amounted to (euro) 69, (euro) 294 and (euro) 348 for the
years ended December 31, 2001, 2002 and 2003, respectively, and are reported as
part of selling, general and administrative expenses.

18    COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under operating leases. As
of December 31, 2003, the required minimum lease commitments were as follows:

<TABLE>
<CAPTION>
                                                  EURO
                                                  -----
<C>                                               <C>
2004                                              1,171
2005                                                901
2006                                                827
2007                                                766
2008                                                717
2009 and thereafter                               4,234
                                                  -----
Total                                             8,616
                                                  =====
</TABLE>

                                      F-32
<PAGE>

Committed rental expense was (euro) 1.6 million, (euro) 9.1 million and (euro)
7.7 million as of December 31, 2001, 2002 and 2003, respectively. In addition,
the Company has an unconditional obligation related to the purchase of
equipment, materials and hiring of specific external technical staff totaling
(euro) 5.4 million as of December 31, 2003. Furthermore, the Company had
contractual purchase obligations relating to the construction of manufacturing
facilities of (euro) 0.4 million at December 31, 2003.

Lease and rental expenses amounted to (euro) 1.7 million, (euro) 1.8 million and
(euro) 1.6 million for the years ended December 31, 2001, 2002 and 2003,
respectively

19    RESEARCH AND DEVELOPMENT CREDITS

The Company receives subsidies and credits for research and development from
various governmental sources.

In 1994, the Company entered into research and development credit agreements
with the Government of the Netherlands, Ministry of Economic Affairs, to fund
research and development projects for a new generation of molding systems. If
the Company generates sales of the products that were created using the amounts
received under the grant, the Company is required to repay such amounts. The
amount of repayment as a percentage of the realized sales of the related
products was 6% in 1999 and 8.5% in 2000 and thereafter. Actual and contingent
amounts repayable accrue interest. The interest rate was 6.15% between 1994 and
2003. The remaining amount (including interest) contingently repayable was
(euro) 4,547 and (euro) 4,704 at December 31, 2002 and 2003, respectively. The
amounts reflected in accrued liabilities at December 31, 2002 and 2003, with
respect to sales of molding systems, were (euro) 425 and (euro) 105
respectively.

In 1996, the Company entered into research and development credit agreements
with the Government of the Netherlands, Ministry of Economic Affairs, to fund
research and development projects for a new generation of trim and form systems.
If the Company generates sales of the products that were created using the
amounts received under the grant, the Company is required to repay such amounts.
The amount of repayment as a percentage of the realized sales of the related
products was 6% in 1999 and 8.5% in 2000 and thereafter. Furthermore, 40% of
sales of the prototype and related assets, to which the aid was related, are
contingently repayable. Actual and contingent amounts repayable accrue interest.
The interest rate was 6.3% between 1997 and 2003. The remaining amount
(including interest) contingently repayable was (euro) 1,295 and (euro) 908 at
December 31, 2002 and 2003, respectively. The amounts reflected in accrued
liabilities at December 31, 2002 and 2003, with respect to sales of trim and
form systems were (euro) 103 and (euro) 472, respectively.

The amounts of research and development subsidies and credits offset against
research and development expenses amounted to (euro) 290 in 2001, (euro) 409 in
2002 and (euro) 315 in 2003.

20    SEGMENT, GEOGRAPHIC AND CUSTOMERS' INFORMATION

The Company designs, develops, manufactures, markets and services products for
the semiconductor industry's "back-end" assembly operations, including (i)
molding systems, trim and form integration systems ("packaging equipment")
through its Fico subsidiary, (ii) selective plating and tin-lead plating systems
and singulation systems ("plating and singulation equipment") through its Meco
subsidiary, (iii) flip chip die attach and die sorting systems through its Besi
Die Handling subsidiary ("die handling equipment"). In the third quarter of
2002, the Company consolidated its die attach equipment business and die sorting
equipment business into a single die handling equipment business and has
reclassified financial data for the die attach equipment business and die
sorting equipment business for prior periods. The accounting principles that are
used for reporting the results of operations of the segments are the same
accounting principles as used for the Company's Consolidated Financial
Statements. The measure of profit or loss used by the Company's chief operating
decision maker to evaluate the performance for each operating segment is income
(loss) before taxes and minority interest.

The following table summarizes selected financial data of the Company's
packaging equipment, plating and singulation equipment, die handling equipment
and the leadframes businesses:

<TABLE>
<CAPTION>
                                                  Plating and      Die
                                     Packaging    singulation    handling         Lead-     Corporate/
                                     equipment     equipment     equipment       frames     elimination      Total
                                       EURO          EURO          EURO           EURO         EURO          EURO
                                     ---------    -----------    ---------      -------     -----------     -------
<S>                                  <C>          <C>            <C>            <C>         <C>             <C>
Year ended December 31, 2001:
Net sales                             102,435        40,653         6,942             -             -       150,030
Depreciation and amortization           4,390         2,800         1,141             -            12         8,343
Restructuring charges                   8,252            54             -             -             -         8,306
Interest income (expense), net         (1,798)          468            13             -         5,557         4,240
</TABLE>

                                      F-33
<PAGE>

<TABLE>
<S>                                   <C>            <C>           <C>          <C>            <C>          <C>
Income (loss) before taxes             (4,817)        1,143        (1,176)            -         4,704          (146)
Loss of affiliated companies                -             -             -       (16,314)            -       (16,314)
Capital expenditures                    2,655           682            56             -             -         3,393
Long-lived assets                      28,129        18,912        13,139             -            16        60,196
Long-term liabilities, non-group        8,720           320             -             -             -         9,040
Total assets                          110,777        55,170        20,153             -        85,786       271,886

Year ended December 31, 2002:
Net sales                              50,981        24,665         7,582             -             -        83,228
Depreciation and amortization           4,066         2,110           539             -            11         6,726
Restructuring charges                       -             -           786             -             -           786
Impairment of intangibles                   -             -         3,302             -             -         3,302
Interest income (expense), net         (1,977)          495          (725)            -         5,602         3,395
Income (loss) before taxes             (5,511)       (2,228)       (9,715)            -         2,844       (14,610)
Minority interest                           3             -             -             -             -             3
Capital expenditures                    4,224           539           115             -            25         4,903
Long-lived assets                      27,402        11,891        15,505             -            31        54,829
Long term liabilities, non-group        7,812             -             -             -             -         7,812
Total assets                          104,317        59,791        18,910             -        61,980       244,998

Year ended December 31, 2003:
Net sales                              58,740        24,671         2,211             -          (122)       85,500
Depreciation and amortization           3,933         1,942           579             -            15         6,469
Impairment of intangibles                   -             -           287             -             -           287
Interest income (expense), net           (929)          443        (1,798)            -         5,099         2,815
Income (loss) before taxes             (8,710)       (3,740)       (7,642)            -         3,253       (16,839)
Minority interest                          50             -             -             -             -            50
Capital expenditures                   10,128         1,284           458             -            19        11,889
Long-lived assets                      32,833        11,104        12,552             -            32        56,521
Long term liabilities, non-group        7,945             -             -             -             -         7,945
Total assets                           77,789        33,842        16,249             -        93,537       221,417
</TABLE>

The following table summarizes net sales, net income (loss), long-lived assets
and total assets of the Company's operations in the Netherlands, the United
States of America and Asia Pacific, the significant geographic areas in which
the Company operates. Intra-area sales are based on the sales price to
unaffiliated customers:

<TABLE>
<CAPTION>
                         The          United         Asia       Intangible
                     Netherlands      States        Pacific       assets     Elimination      Total
                         EURO          EURO          EURO          EURO         EURO           EURO
                     -----------     -------        -------     ----------   -----------     -------
<S>                  <C>             <C>            <C>         <C>          <C>             <C>
Year ended
December 31, 2001
Net sales              133,211         9,334        14,246             -        (6,761)      150,030
Net loss               (12,144)         (691)         (243)       (3,803)          (97)      (16,978)
Long-lived assets       24,787           139         3,540        31,730             -        60,196
Total assets           420,726        42,011        30,615        31,730      (253,196)      271,886

Year ended
December 31, 2002
Net sales               79,620         9,203         8,435             -       (14,030)       83,228
Net income (loss)          332       (11,698)         (136)       (4,922)         (587)      (17,011)
Long-lived assets       19,846           302         2,955        31,726             -        54,829
Total assets           422,139        41,404        14,048        31,726      (264,319)      244,998

Year ended
December 31, 2003
Net sales               78,854         3,617         8,941             -        (5,912)       85,500
Net income (loss)       (4,544)       (7,017)           27        (1,947)          (16)      (13,497)
Long-lived assets       24,582           446         5,072        26,421             -        56,521
Total assets           350,230        14,308        15,742        26,061      (184,924)      221,417
                       =======       =======        ======        ======      ========       =======
</TABLE>

                                      F-34
<PAGE>

The following table represents the geographical distribution of the Company's
net sales to unaffiliated companies:

<TABLE>
<CAPTION>
                                       Year ended December 31,
                              ----------------------------------------
                                2001            2002             2003
                                EURO            EURO             EURO
                              -------          ------           ------
<S>                           <C>              <C>              <C>
Europe and Rest of World       47,766          28,307           26,731
United States                  33,323          10,107            3,452
Malaysia                       27,319          16,638           21,306
Other Asia Pacific             41,622          28,176           34,011
                              -------          ------           ------
Total net sales               150,030          83,228           85,500
                              =======          ======           ======
</TABLE>

The following table represents export sales by the Company's Netherlands
operations to unaffiliated customers that exceeded 10% of total net sales in
each year:

<TABLE>
<CAPTION>
                              Other         United                          Rest
                             Europe         States        Malaysia        of World        Total
                              EURO           EURO           EURO            EURO          EURO
                             ------         ------        --------        --------       -------
<S>                          <C>            <C>           <C>             <C>            <C>
Year ended

December 31, 2001            45,344         20,431         23,100          34,910        123,785
December 31, 2002            25,863              -         14,390          27,477         67,730
December 31, 2003            26,191              -         18,576          30,017         74,784
</TABLE>

The Company's net sales are generated primarily by shipments to Asian
manufacturing operations of leading US and European semiconductor manufacturers
and, to a lesser extent, Taiwanese and other Asian manufacturers and
subcontractors. The following table presents sales to specific customers that
exceeded 10% of total net sales in each year.

<TABLE>
<CAPTION>
                                    Year ended December 31,
                              ----------------------------------
                               2001          2002          2003
                               EURO          EURO          EURO
                              ------        ------        ------
<S>                           <C>           <C>           <C>
Customer:
A                             25,890        19,627        26,664
B                             16,102        12,161             -
</TABLE>

                                      F-35
<PAGE>

21    REMUNERATION MANAGEMENT BOARD AND SUPERVISORY BOARD

Aggregate cash compensation paid or accrued by the Company for its management
including members of the Board of Management of the Company was (euro) 1,977 in
2001, (euro) 1,719 in 2002 and (euro) 1,561 in 2003. Amounts accrued to provide
pension, retirement or similar benefits to these individuals, as a group, were
(euro) 187 in 2001, (euro) 220 in 2002 and (euro) 217 in 2003.

The cash compensation of the individual executive members of the Management
Board for the year ended December 31, 2002 and 2003 was as follows:

<TABLE>
<CAPTION>
                                   Year ended December 31, 2002                 Year ended December 31, 2003
                              -------------------------------------        --------------------------------------
(in euros)                    Salaries      Bonus (3)       Pension        Salaries      Bonus (3)        Pension
<S>                           <C>           <C>             <C>            <C>           <C>              <C>
R.W. Blickman                 297,684           -            54,326        298,210           -            54,326
J. W. Rischke (1)             137,948           -            32,367              -           -                 -
M.A.H. Wartenbergh (2)              -           -                 -        114,480           -            14,329
</TABLE>

(1)   Executive member of the Management Board until October 23, 2002;
      remuneration relates to the period until October 23, 2002.

(2)   Executive member of the Management Board as from March 27, 2003;
      remuneration relates to the period as from March 27, 2003 to December 31,
      2003.

(3)   Bonus is included in the year to which it relates.

Details of options held by the Board of Management in the ordinary shares of BE
Semiconductor Industries N.V. were as follows:

<TABLE>
<CAPTION>
                       Jan.1,   Granted   Exercised   Expired in    Dec. 31,   Exercise price
                        2003    in 2003    in 2003       2003        2003          EURO         Expiration date
                      -------   -------   ---------   ----------    -------    --------------   ---------------
<S>                   <C>       <C>       <C>         <C>           <C>        <C>              <C>
R.W. Blickman          20,042        -        -         20,042            -
                        8,500        -        -              -        8,500         6.35           29-4-2005
                       20,000        -        -              -       20,000        17.90           17-4-2006
                      142,000        -        -              -      142,000         9.80           5-12-2006
                       40,000        -        -              -       40,000         9.55            2-5-2007
                       36,000        -        -              -       36,000         8.94           30-4-2008
                            -   35,042        -              -       35,042         3.22           26-3-2009
M.A.H. Wartenbergh      8,000        -        -              -        8,000         9.55            2-5-2007
                        9,600        -        -              -        9,600         8.94           30-4-2008
                            -    9,600        -              -        9,600         3.22           26-3-2009
</TABLE>

Loans outstanding relating to the stock options to the executive members of the
Management Board amounted to (euro) 286,795 (in euros) as of December 31, 2003
(details financing see Note 15 Employee Benefits). The principal amount and
other loan conditions did not change since the inception of the loan agreement
in 1999.

                                      F-36
<PAGE>

The total remuneration of the individual members of the Supervisory Board
members for the year ended December 31, 2002 and 2003 was as follows:

<TABLE>
<CAPTION>
                               Year ended December 31,
(In euros)                     2002              2003
                              ------            ------
<S>                           <C>               <C>
W. D. Maris                   15,882            15,882
E. B. Polak                   15,882            15,882
D. Sinninghe Damste           15,882            15,882
T. de Waard                   15,882            15,882
</TABLE>

In 2002 and 2003, part of the cash compensation to the Supervisory Board members
has been replaced by the acceptance of granting of options by three Supervisory
Board members. The fair value of the option awards to the Supervisory Board
members was estimated using the Black-Scholes option-pricing model. Total
remuneration did not change compared to the remuneration approved by the General
Meeting of Shareholders.

Details of options held by the Supervisory Board in the ordinary shares of BE
Semiconductor Industries N.V. were as follows:

<TABLE>
                                                                                         Exercise
                            Jan.1,    Granted in    Exercised   Expired in    Dec. 31,    price
                             2003        2003        in 2003       2003        2003        EURO     Expiration date
                            -----     ----------    ---------   ----------    --------   --------   ---------------
<S>                         <C>       <C>           <C>         <C>           <C>        <C>        <C>
E. B. Polak                 1,322           -           -            -         1,322       8.94        30-4-2008
                                -       3,667           -            -         3,667       3.22        26-3-2009
D. Sinninghe Damste
                            1,322           -           -            -         1,322       8.94        30-4-2008
                                -       3,667           -            -         3,667       3.22        26-3-2009
T. de Waard                 1,322           -           -            -         1,322       8.94        30-4-2008
                                -       3,667           -            -         3,667       3.22        26-3-2009
</TABLE>

22    SELECTED OPERATING EXPENSES AND ADDITIONAL INFORMATION

Personnel expenses for all employees were as follows:

<TABLE>
<CAPTION>
                                                                         Year ended December 31,
                                                                     -------------------------------
                                                                      2001         2002        2003
                                                                      EURO         EURO        EURO
                                                                     ------       ------      ------
<S>                                                                  <C>          <C>         <C>
Wages and salaries                                                   31,456       27,824      26,730
Social security expenses                                              3,226        3,407       2,692
Pension and retirement expenses                                       2,739        2,352       2,385
                                                                     ------       ------      ------
Total personnel expenses                                             37,421       33,583      31,807
                                                                     ======       ======      ======
</TABLE>

The average number of employees during 2001, 2002 and 2003 was 819, 673 and 694,
respectively.

The total number of personnel employed per sector was:

<TABLE>
<CAPTION>
                                                      December 31,
                                            --------------------------------
                                            2001          2002          2003
                                            ----          ----          ----
<S>                                         <C>           <C>           <C>
Sales and Marketing                          133           120           114
Manufacturing and Assembly                   475           371           459
Research and Development                      66            78            90
General and Administrative                    72            73            83
                                            ----          ----          ----
Total number of personnel                    746           642           746
                                            ====          ====          ====
</TABLE>

As of December 31, 2001, 2002 and 2003 a total of 545, 460 and 464 persons,
respectively, were employed in the Netherlands.

                                      F-37
<PAGE>

23     INTEREST INCOME

The components of interest income, net were as follows:

<TABLE>
<CAPTION>
                                                  Year ended December 31,
                                     -----------------------------------------------
                                     2001                  2002                 2003
                                     EURO                  EURO                 EURO
                                     ----                  ----                 ----
<S>                                 <C>                   <C>                  <C>
Interest income                     5,053                 4,166                3,423
Interest expense                     (813)                 (771)                (608)

                                    -----                 -----                -----
Interest income, net                4,240                 3,395                2,815
                                    =====                 =====                =====
</TABLE>

24     INCOME TAXES

The components of income (loss) before income taxes and equity in loss of
affiliated companies and minority interest were as follows:

<TABLE>
<CAPTION>
                                            Year ended December 31,
                               ------------------------------------------------
                                2001                 2002                 2003
                                EURO                 EURO                 EURO
                                ----                 ----                 ----
<S>                            <C>                 <C>                  <C>
Domestic                        1,796               (2,867)              (9,088)
Foreign                        (1,942)             (11,743)              (7,751)

                               ------              -------              -------
Total                            (146)             (14,610)             (16,839)
                               ======              =======              =======
</TABLE>

                                      F-18

<PAGE>

The Netherlands domestic statutory tax rate is 35% for the year ended December
31, 2001 and 34.5% for the years ended December 31, 2002 and 2003. The
reconciliation between the actual income taxes (benefit) shown in the
Consolidated Statements of Operations and the benefit that would be expected
based on the application of the domestic tax rate to loss before taxes and
equity in loss of affiliated companies and minority interest, is as follows:

<TABLE>
<CAPTION>
                                                          Year ended December 31,
                                                    ----------------------------------
                                                     2001          2002          2003
                                                     EURO          EURO          EURO
                                                     ----          ----          ----
<S>                                                 <C>           <C>           <C>
"Expected" income tax benefit based on
   domestic rate                                       (51)       (5,040)       (5,810)
Non deductible expenses                                214           126           142
Goodwill impairment                                      -         1,255             -
Foreign tax rate differential                         (127)         (249)         (214)
Tax exempt income                                      (17)         (904)          (32)
Increase in valuation allowance                        492         7,214         2,777
Other                                                    7             2          (155)
                                                    ------        ------        ------
Income taxes (benefit) shown in Statements of
  Operations                                           518         2,404        (3,292)
                                                    ======        ======        ======
</TABLE>

The sale of the Company's 30% interest in PBE on November 15, 2001, was a
non-taxable event and as a result no tax benefit relating to the loss incurred
on the sale has been recorded. In the fourth quarter of fiscal year 2002, as
part of the income tax provision for the period, the Company recorded a charge
of (euro) 6.0 million through the establishment of a valuation allowance against
its deferred tax asset consisting primarily of US net operating loss carry
forwards and temporary differences. The Company determined that the valuation
allowance was required based on its recent losses, which are given substantially
more weight than forecasts of future profitability in the evaluation. Until the
Company utilizes these US operating loss carry forwards, its income tax
provision will reflect mainly domestic taxation. The increase in valuation
allowance at December 31, 2002 as compared to December 31, 2001 represents an
adjustment of the beginning of the year valuation allowance to an amount of
(euro) 4.2 million due to a change in circumstances that caused a change in the
judgment about the realizability of the related deferred tax asset in future
years.

The Company's provision for income taxes (benefit) consisted of the following:

<TABLE>
<CAPTION>
                         Year ended December 31,
                  ------------------------------------
                   2001           2002           2003
                   EURO           EURO           EURO
                   ----           ----           ----
<S>               <C>            <C>            <C>
Current:
- domestic         1,599           (151)        (2,416)
- foreign            460            152           (266)
Deferred:
- domestic          (756)        (1,181)          (719)
- foreign           (785)         3,584            109

                  ------         ------         ------
                     518          2,404         (3,292)
                  ======         ======         ======
</TABLE>

                                      F-39

<PAGE>

25     EARNINGS PER SHARE

The following table reconciles shares outstanding at the beginning of the year
to average shares outstanding used to compute a loss per share:

<TABLE>
<CAPTION>
                                                             2001               2002                 2003
                                                             ----               ----                 ----
<S>                                                        <C>                <C>                 <C>
Shares outstanding at beginning of the year                31,794,675         31,794,675          30,898,228
Weighted average shares issued during the year                      -                  -                   -
Weighted average shares converted from priority
  shares to ordinary shares                                         -                  -                   -
Weighted average repurchased shares                                 -           (332,193)            (84,547)
                                                           ----------         ----------          ----------
Average shares outstanding - basic                         31,794,675         31,462,482          30,813,681

Dilutive shares contingently issuable upon the
  exercise of stock options                                         -                  -                   -
Shares assumed to have been repurchased for
  treasury with assumed proceeds from the exercise
  of stock options                                                  -                  -                   -
                                                           ----------         ----------          ----------
Average shares outstanding - assuming dilution             31,794,675         31,462,482          30,813,681
                                                           ==========         ==========          ==========
</TABLE>

For purposes of computing diluted earnings per share, weighted average ordinary
share equivalents do not include stock options with an exercise price that
exceeds the average fair market value of the Company's ordinary shares for the
period, because the impact on earnings (loss) would be anti-dilutive. For the
years ended December 31, 2001, 2002 and 2003, all options to purchase ordinary
shares were excluded from the calculation of diluted loss per share as the
effect would be anti-dilutive due to the Company's loss for those years.

26     SUPPLEMENTAL CASH FLOW INFORMATION

On January 4, 2002, the Company acquired Laurier. The following is a summary of
the net cash paid for acquisition:

<TABLE>
<CAPTION>
                                        USD
                                        ---
<S>                                   <C>
Fair value of assets                  12,632
Liabilities                           (3,268)
Acquisition cost                        (452)
                                      ------
Cash paid                              8,912
Less: cash acquired                       (1)

                                      ------
Net cash paid for acquisition          8,911
                                      ======
</TABLE>

27     SUBSEQUENT EVENT

On February 6, 2004, the Company sold land and buildings of the Duiven
subsidiaries in a conditional sale and lease back transaction for (euro) 14.9
million in cash. At the date of the transaction, the net book value of the real
estate sold will be approximately equal to the selling price of the real estate.
Any gain on this transaction will be deferred and amortized and netted against
rental expenses over the term of the lease. Gross rental expenses will amount to
(euro) 1.3 million per annum.

The Company will grant the buyer a (euro) 3.0 million loan for a maximum period
of 24 months. The loan can be repaid at any moment in time during the term of
the loan. The loan is secured by a second mortgage on the land and buildings in
the sale and lease back transaction. The loan bears 8.75% interest.

                                      F-40

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholders and the Board of Management of Possehl Electronics N.V.

We have audited the accompanying consolidated balance sheet of Possehl
Electronics N.V. and subsidiaries as of December 31, 2001 and the related
consolidated statement of operations, cash flows, shareholders' equity and
accumulated other comprehensive income, for the year ended December 31, 2001.
These consolidated financial statements are the responsibility of the management
of Possehl Electronics N.V. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and The Netherlands. 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. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, based on our audit, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Possehl Electronics N.V. and subsidiaries at December 31, 2001 and
the results of their operations and their cash flows for each of the year ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States of America.

As discussed in Note 1, the Company changed its method of accounting for
depreciation on stamping tools in 2001.

BDO Accountants
`s-Hertogenbosch, The Netherlands
February 6, 2002

                                      F-41

<PAGE>

                           CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                    Year ended December 31,
                                                    -----------------------
                                                       2001           2001
                                                       EURO           USD
                                                       ----           ---
<S>                                                  <C>            <C>
ASSETS

Cash and cash equivalents                              3,276          2,916
Accounts receivable, net                              29,216         26,005
Inventories                                           29,897         26,611
Other current assets                                  31,450         27,994
Deferred tax assets                                    4,906          4,367

                                                     -------        -------
Total current assets                                  98,745         87,893

Property, plant and equipment                         92,527         82,358
Other non-current assets                                 215            191
Deferred tax assets, net                               2,355          2,096
                                                     -------        -------
Total assets                                         193,842        172,538
                                                     =======        =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable to banks                                57,353         51,050
Current portion of long-term debt                      5,063          4,507

Advances from shareholders                                37             33
Accounts payable                                      13,190         11,740

Accrued liabilities                                   16,932         15,071
Deferred tax liabilities                               1,260          1,121

                                                     -------        -------
Total current liabilities                             93,835         83,522

Long-term debt                                         1,034            920
Subordinated loan from shareholders                   37,738         33,591
Other long-term liabilities                            1,361          1,211
Deferred tax liabilities                               1,154          1,027

                                                     -------        -------
Total non-current liabilities                         41,287         36,749

Minority interest                                      4,404          3,920

Ordinary shares                                       29,728         26,461
Capital in excess of par value                         9,325          8,300
Retained earnings                                      8,084          7,196
Accumulated other comprehensive income (loss)          7,179          6,390
                                                     -------        -------
Total shareholders' equity                            54,316         48,347

                                                     -------        -------
Total liabilities and shareholders' equity           193,842        172,538
                                                     =======        =======
</TABLE>

                                      F-42

<PAGE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-43

<PAGE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                               Year ended December 31,
                                                               -----------------------
                                                                2001             2001
                                                                EURO              USD
                                                                ----              ---
<S>                                                            <C>              <C>
Net sales                                                      178,997          159,325
Cost of sales (1)                                              167,539          149,126

                                                              --------         --------
Gross profit                                                    11,458           10,199

Selling, general and administrative expenses                    30,609           27,245
Research and development expenses                                1,597            1,421
Restructuring charges                                           15,493           13,791
Foreign currency gains                                            (478)            (425)

                                                              --------         --------
Total operating expenses                                        47,221           42,032

Operating loss                                                 (35,763)         (31,833)
Interest expense, net                                            4,777            4,252

                                                              --------         --------
Loss before taxes, minority interest and
  cumulative effect of change of accounting                    (40,540)         (36,085)
  principle
Income taxes                                                    (3,593)          (3,198)

                                                              --------         --------
Income before investment income from
  affiliated companies, minority interest and                  (36,947)         (32,887)
  cumulative effect of change of accounting
  principle

Minority interest                                                 (473)            (421)
Cumulative effect of change of accounting principle(1)
                                                                (4,082)          (3,633)
                                                              --------         --------
Net loss                                                       (41,502)         (36,941)
                                                              ========         ========
</TABLE>

(1)   In December 2001 the Company changed its depreciation method for stamping
      tools, as described in the notes to property, plant and equipment. The
      cumulative effect on previous years depreciation included in 2001 is
      (euro) 4,082. The 2001 effect in depreciation is (euro) 1,697.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-44

<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                      Year ended December 31,
                                                                                      -----------------------
                                                                                        2001           2001
                                                                                        EURO           USD
                                                                                        ----           ---
<S>                                                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                              (41,502)        (36,941)

Adjustments to reconcile net loss to net cash flows from operating activities:
Minority interest                                                                         473             421
Gain on sale of affiliated companies                                                        -
Revaluation of warrant                                                                   (313)           (279)
Interest expense on original issue discount                                               425             378
Depreciation of property, plant and equipment                                          36,481          32,472
Restructuring impairment                                                                9,364           8,335
Deferred income taxes (benefit)                                                        (4,545)         (4,046)
(Gain) loss on disposal of equipment                                                     (234)           (208)
Translation of debt in foreign currency                                                (1,351)         (1,203)

Effects of changes in assets and liabilities:
Decrease in accounts receivable                                                        16,669          14,837
Decrease in inventories                                                                10,020           8,919
Decrease in other current assets                                                          494             440
Increase in accrued liabilities                                                        (1,525)         (1,357)
Increase in accounts payable                                                           (5,855)         (5,212)

                                                                                      -------         -------
Net cash provided by operating activities                                              18,601          16,556

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                                  (27,299)        (24,299)
Proceeds from sale of equipment                                                         1,442           1,284
Proceeds from sale of affiliated companies                                                  -               -
Purchase of subsidiaries                                                                    -               -
Cash transferred as part of sale of affiliated
  Companies                                                                                 -               -
                                                                                      -------         -------
Net cash used in investing activities                                                 (25,857)        (23,015)
                                                                                      =======         =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-45

<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Continued

<TABLE>
<CAPTION>
                                                             Year ended December 31,
                                                             -----------------------
                                                             2001               2001
                                                             EURO               USD
                                                             ----               ---
<S>                                                         <C>               <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of advances from shareholders                       (659)             (587)
Proceeds from subordinated loan from shareholders            25,000            22,253
Proceeds from long-term debt                                  5,927             5,276
Payments on deposit with shareholders                       (24,500)          (21,807)
Payments on long-term debt                                   (6,003)           (5,343)
Payments on bank lines of credit                            (13,307)          (11,845)
Proceeds from bank lines of credit                           20,066            17,861
Dividend payments to minority shareholders                        -                 -

                                                            -------           -------

Net cash provided by financing activities                     6.524             5,808

Net decrease in cash and cash equivalents                      (732)             (651)

Effect of changes in exchange rates on cash and
  cash equivalents                                              272               242
Cash and cash equivalents at beginning of the year            3,736             3,325
                                                            -------           -------
Cash and cash equivalents at end of the year                  3,276             2,916
                                                            =======           =======
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest                                        5,528             4,920
Cash paid for income taxes                                    2,902             2,583
                                                            =======           =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-46

<PAGE>

Consolidated Statements of Shareholders' Equity
(Amounts in thousands except per share data)

<TABLE>
<CAPTION>
                                                                     Capital                          Accumulated       Total
                                       Number of      Share         in excess                            other          share-
                                       Ordinary      capital         of par              Retained     comprehensive    holders'
                                        Shares     at par value       value              earnings        income         equity
                                     Outstanding      EURO            EURO                 EURO           EURO           EURO
                                     -----------   ------------    ----------            ---------    -------------    --------
<S>                                  <C>           <C>             <C>                   <C>          <C>              <C>
Balance December 31, 2000             64,627,111        29,327          9,785               49,586          3,920        92,618

Net loss                                       -             -              -              (41,502)                     (41,502)
Exchange rate changes for
  the year                                     -             -              -                    -          3,259         3,259
Translation of share capital
  into(euro)                                   -           401           (401)                   -              -             -
Other                                          -             -            (59)                   -              -           (59)
                                      ----------    ----------     ----------            ---------      ---------      --------
Balance December 31, 2001             64,627,111        29,728          9,325                8,084          7,179        54,316
                                      ==========    ==========     ==========            =========      =========      ========
</TABLE>

Per December 31, 2001 the authorized capital is translated from NLG into (euro).
The 200,000,000 ordinary shares of NLG 1.00 each are translated into (euro) at a
rate of (euro) 0.46 per share. A number of 64,627,111 shares are issued and
outstanding.

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

<TABLE>
<CAPTION>
                                                  Year ended December 31,
                                                  -----------------------
                                                  2001              2001
                                                  EURO              USD
                                                 -------           -------
<S>                                              <C>               <C>
Net loss                                         (41,502)          (36,941)
Other comprehensive income (loss):
Foreign currency translation adjustment            3,259             2,901
                                                 -------           -------
Comprehensive loss                               (38,243)          (34,040)
                                                 =======           =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-47
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1     SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

GENERAL

On May 30, 1997, L. Possehl & Co. mbH ("Possehl"), BE Semiconductor Industries
N.V. ("BESI") and Mr Ho Hung Tak ("Mr Ho") contributed all of their ownership
interests relating to the production and plating of leadframes and connectors to
Possehl BESI Electronics N.V. ("PBE N.V.") and its consolidated subsidiaries,
(collectively, the "Company"). The ownership of the Company by Possehl, BESI and
Mr Ho was 50.1%, 30.0% and 19.9%, respectively. The Board of Directors of the
Company consisted of executive officers of each of the founding members of the
Company, of which each one was entitled to cast one vote.

On November 15, 2001, BESI sold its 30% equity interest in PBE N.V. to Possehl.
As a consequence, Possehl increased its interest in PBE N.V. from 50.1% to
80.1%. Mr. R.W. Blickman resigned from the Board of Directors as per November
15, 2001. Consequently, the Board of Directors of the Company consists of
executive officers of each of the two shareholders of the Company, of which each
one is entitled to cast one vote.

Subsequent to the sale of the 30% interest in PBE, BESI no longer had any
representation on the Board of Directors of PBE nor any other rights or
responsibilities regarding PBE.

At December 19, 2001 the name of the Company was changed to Possehl Electronics
N.V.

("PE N.V. or the Company"). Furthermore it was agreed as per November 15, 2001
to adjust the names of the individual subsidiaries within six months after the
transaction date. As per December 31, 2001 no formal name changes for
subsidiaries occurred.

The management of the Company shall adopt resolutions by an absolute majority of
the total number of votes to be cast, except for certain significant resolutions
which must be adopted by unanimity. Furthermore, these significant resolutions
require prior approval of the General Meeting of Shareholders.

As set forth in the Articles of Association and Shareholders Agreement of the
Company, every share of the Company entitles the holder thereof to cast one vote
in the General Meeting of Shareholders. Resolutions voted on at the General
Meeting of Shareholders require a 75% majority of the votes cast for approval.

Significant resolutions which require prior approval of the shareholders at the
General Meeting of Shareholders include:

-     Appointment of Management Board Members of the Company;

-     Appointment of persons with power to represent the Company;

-     Entering into credit agreements in excess of (euro)0.5 million;

-     Approval of annual operating and capital expenditure budgets;

-     Proposing a legal merger;

-     Entering into or terminating a direct or indirect continuing cooperation
      with another company or legal person.

On June 30, 1999, Possehl, BESI and Mr. Ho contributed their ownership interest
in Possehl Electronic Hong Kong Ltd. ("PEH") to the Company in return for a
total of 3,536,872 newly issued shares in the Company. The ownership interest of
PEH were substantially the same as the ownership interests of the Company.

PRESENTATION

The accompanying consolidated financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the
United States of America. The accompanying consolidated financial statements are
stated in (euro)o ("(euro)"). The accompanying consolidated financial statements
are, solely for the convenience of the reader, translated into US dollars
("USD") using the Noon Buying Rate in effect on December 31, 2001 ((euro) 1 =
USD 0.8901). Such translations should not be construed as representations that
the Eamounts could be converted into US dollars at that or any other date.
All (euro) and US dollar amounts are expressed in thousands.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include the accounts of its
subsidiaries, including those of PEH. Prior to the contribution of PEH on June
30, 1999, PEH was fully controlled by the Company. From May 30, 1997 through
June 30, 1999 the management of PEH was identical to that of the Company and the
management of the Company exerted control over PEH. From the date of
incorporation of the Company on May 30, 1997, the financial statements of PEH
have been

                                      F-48

<PAGE>

consolidated with PBE as if it were a wholly owned subsidiary; therefore, the
contribution of PEH had no effect on the principles of consolidation.

As of December 31, 2001 the following subsidiaries and affiliated companies are
included in the accompanying consolidated financial statements:

<TABLE>
<CAPTION>
                                                                                 PERCENTAGE OF
NAME                                                COUNTRY                        OWNERSHIP
-----------------------------------------------     ------------------------     -------------
<S>                                                 <C>                          <C>
Possehl Electronic Nederland BV                     The Netherlands                        100%
Possehl BESI Electronics Hong Kong Ltd.             Hong Kong                              100%
Possehl Hong Kong Precision Machinery Ltd.          Hong Kong                              100%
Possehl BESI Laminates Ltd.                         Hong Kong                              100%
Meco Metal Finishing Engineers (Mal) Sdn. Bhd.      Malaysia                               100%
Possehl BESI Electronics (Malaysia) Sdn. Bhd.       Malaysia                               100%
Meco USA, Inc.                                      United States of America               100%
Meco Metal Finishing USA, Inc.                      United States of America               100%
Meco Metal Finishing Illinois, LLC                  United States of America               100%
Possehl Electronic GmbH                             Germany                                100%
Nastrojarna Possehl Electronic s.r.o.               Czech Republic                          86%
Possehl Electronic Maroc S.A.R.L.                   Morocco                                100%
Possehl Electronic France S.A.                      France                                 100%
Possehl BESI Electronics Singapore Pte. Ltd.        Singapore                              100%
Possehl Precision Toolings (Shenzhen) Co., Ltd.     China P.R.C.                            80%
Shenzhen PBE SEG Electronics Co. Ltd.               China P.R.C.                            80%
</TABLE>

The balance sheets of the Company's foreign subsidiaries are translated at the
year-end exchange rate and the income statements of the foreign subsidiaries are
translated at the average rate of exchange prevailing during the period.
Translation differences arising from the consolidation of the financial
statements of foreign subsidiaries are recorded directly to shareholders'
equity.

All significant intercompany profits, transactions and balances have been
eliminated in consolidation.

DERIVATIVE FINANCIAL INSTRUMENTS

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging Activity,"
which establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. All derivatives, whether or not designated in hedging
relationships, are required to be recorded on the balance sheets at fair value.
If the derivative is designated as a fair value hedge, the changes in the fair
value of the derivative and of the hedged item attributable to the hedged risk
are recognized in earnings. If the derivative is designated as a cash flow
hedge, the effective portions of changes in the fair value of the derivative are
recorded in other comprehensive income and are recognized in the statements of
income when the hedged item affects earnings. Ineffective portions of changes in
the fair value of cash flow hedges are recognized in earnings. The impact of
adopting SFAS 133 was not material.

The Company uses forward exchange contracts to hedge certain firm commitments
denominated in foreign currencies. The terms of the currency instruments used
are generally consistent with the timing of the committed transactions being
hedged. The purpose of the Company's foreign currency management activity is to
protect the Company from the risk that eventual cash flows from foreign currency
denominated transactions may be adversely affected by changes in exchange rates.
The Company does not use derivative financial instruments for trading or
speculative purposes.

FOREIGN CURRENCY

Foreign currency transactions are recorded at the exchange rate of the date of
origin, or at a forward contract rate if hedged through a related forward
exchange contract. Realized and unrealized exchange rate gains and losses are
recorded in the statement of operations. Assets and liabilities denominated in
foreign currencies are translated at year-end exchange rates unless a related or
matching forward exchange contract or currency swap has been entered into, in
which event the rate specified in the contract is used. Exchange rate
differences on assets and liabilities denominated in a foreign currency that are
not covered by hedging arrangements are recorded in the statement of operations.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid investments with a maturity
date at acquisition of three months or less.

                                      F-49

<PAGE>

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market. Cost includes net prices paid for materials purchased, charges for
freight and custom duties, production labor costs and factory overhead. Precious
metals are valued at the market price at the balance sheet date. Variances in
market price from balance sheet date to balance sheet date are recorded in gross
profit as gains or losses.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method, based on the
following estimated useful lives.

<TABLE>
<CAPTION>
CATEGORY                                            ASSIGNED USEFUL LIFE
------------------------------                      --------------------
<S>                                                 <C>
Land and buildings                                         20 - 60 years
Leasehold improvements (1)                                  5 - 10 years
Machinery and equipment                                      2 - 5 years
Office furniture and equipment                               3 - 5 years
</TABLE>

(1) Leasehold improvements are amortized over the shorter of the lease term or
economic life of the asset.

In 2001, the Company revised its depreciation method for stamping tools to focus
appropriate risk management. The new method implies depreciation on units sold
with the condition that it should not be less than the straight-line method of
depreciation of 4 years.

LEASES

Assets acquired under capital leases are included in the balance sheet at the
present value of the minimum future lease payments and are depreciated over the
shorter of the lease term and their useful lives. A corresponding liability is
recorded at the inception of the capital lease and the interest element of
capital leases is charged to interest expense.

INVESTMENT IN AFFILIATED COMPANIES

Investments in unconsolidated affiliated companies, in which the Company does
not have significant influence, are valued at cost or market value, if less. An
estimated realizable value is used in case there is no readily identifiable
market value.

INCOME TAXES

The Company applies Statement of Financial Accounting Standard ("SFAS") No. 109
"Accounting for Income Taxes", which requires the asset and liability method of
accounting for taxes. Under the asset and liability method of SFAS 109, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years which these temporary differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance to the amount that is
more likely than not to be realized.

RECOGNITION OF REVENUES

The Company's practice is to recognize revenues from sales based on invoiced
value of goods supplied to customers, less discounts and sales returns.

RESEARCH AND DEVELOPMENT

Costs relating to research and development are charged to operating income as
incurred.

PENSION COMMITMENTS

Pension plans are funded with insurance companies based on defined contribution
plans, except for the pension plan of the Company's German subsidiary. The
payments of annual premiums are charged against earnings. This subsidiary has a
defined pension benefit plan for a limited number of employees. The pension
commitments have been calculated according to the actuarial method.

CONCENTRATION OF CREDIT RISK

A relatively small number of customers account for a significant percentage of
the Company's net sales. The loss of a major customer or any reduction in orders
by such customers, including reductions due to market or competitive conditions,
would have an adverse effect on the Company's business, financial condition and
results of operations. The Company's future success will depend in part upon its
ability to obtain orders from new customers, as well as the financial condition
and success of its customers and the general economy.

                                      F-50

<PAGE>

The Company's customers consist of semiconductor manufacturers located
throughout the world. The Company performs ongoing credit evaluations of its
customers' financial condition and generally requires no collateral to secure
accounts receivable. The Company maintains an allowance for doubtful accounts
based on an assessment of the collectibility of such accounts.

USE OF ESTIMATES

The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the balance
sheet dates and the reported amounts of revenue and expense during the reported
periods. Actual results could differ from those estimates.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the FASB issued Statement No. 141, "Business combinations", and
Statement No. 142, "Goodwill and other intangible assets". SFAS No. 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001 as well as all purchase method business
combinations completed after June 30, 2001. Statement No. 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocable to an assembled workforce may not be accounted for
separately. Statement No. 142 will require that goodwill and intangible assets
with indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement No.
142. SFAS No. 142 will also require that intangible assets with definite useful
lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with SFAS
No. 121, "Accounting for the impairment of long-lived assets and for long-lived
assets to be disposed of".

The Company adopted the provisions of Statement No. 141 as at July 1, 2001 and
Statement No. 142 as at January 1, 2002. Any goodwill and any intangible asset
determined to have an indefinite useful life that are acquired in a purchase
business combination completed after June 30, 2001 will not be amortized, but
will continue to be evaluated for impairment in accordance with SFAS No. 142
requirements. Goodwill and intangible assets acquired in business combinations
completed before July 1, 2001 continued to be amortized prior to January 1,
2002.

Statement No. 141 requires, that a company evaluates its existing intangible
assets and goodwill that were acquired in a prior purchase business combination,
and makes any necessary reclassifications in order to conform with the new
criteria in Statement No. 141 for recognition apart from goodwill. The Company
will reassess the useful lives and residual values of all intangible assets
acquired in purchase business combinations, and make any necessary amortization
period adjustments by the end of the first interim period after adoption. In
addition, to the extent an intangible asset is identified as having an
indefinite useful life, it is required to test the intangible asset for
impairment in accordance with the provisions of Statement No. 142 within the
first interim period. Any impairment loss will be measured as of the date of
adoption and recognized as the cumulative effect of a change in accounting
principle in the first interim period.

In connection with the transitional goodwill impairment evaluation, Statement
No. 142 will require to perform an assessment of whether there is an indication
that goodwill, and equity-method goodwill, is impaired as of the date of
adoption. To accomplish this a company must identify its reporting units and
determine the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The company then has up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount. To the extent a
reporting unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the second step of the
transitional impairment test must be performed. In the second step, the implied
fair value of the reporting unit's goodwill, determined by allocating the
reporting unit's fair value to all of its assets (recognized and unrecognized)
and liabilities in a manner similar to a purchase price allocation in accordance
with Statement No. 141, must be compared to its carrying amount, both of which
would be measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the financial statements.

Finally, any unamortized negative goodwill and negative equity-method goodwill
existing at the date Statement No. 142 is adopted, must be written off as the
cumulative effect of a change in accounting principle.

As of December 31, 2001, the Company has unamortized goodwill in the amount of
nil, unamortized indentifiable intangible assets in the amount of nil, and no
unamortized negative goodwill, all of which will be subject to the transition
provisions of Statements No. 141 and No. 142. Amortization expense related to
goodwill was nil for the year ended December 31, 1999, 2000 and 2001,
respectively.

In June 2001, the FASB issued SFAS No. 143, "Accounting for asset retirement
obligations". SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the

                                      F-51

<PAGE>

associated retirement costs. It requires that the fair value of a liability for
an asset retirement obligation is realized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The Company is currently
assessing SFAS No. 143 and the impact that adoption, in 2003, will have on the
consolidated financial statements.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for Impairment or Disposal of Long-Lived Assets to be Disposed
of", and APB Opinion No. 30 "Reporting the Results of Operations - Reporting the
Effects of a Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS No. 144 establishes a
single accounting model for the impairment of long-lived assets and broadens the
presentation of discontinued operations to include more disposal transactions.
SFAS No. 144 is effective for 2002 and adoption will not have a material impact
on our consolidated financial statements.

2     ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Accounts receivable                                                             32,214
Allowance for doubtful accounts                                                 (2,998)

                                                                          ------------
Total accounts receivable, net                                                  29,216
                                                                          ============
</TABLE>

3     INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Precious metals                                                                  2,547
Raw materials                                                                   17,520
Work in progress                                                                 6,377
Finished goods and goods for resale                                             11,031
Allowance for obsolescence                                                      (7,578)

                                                                          ------------
Total inventories                                                               29,897
                                                                          ============
</TABLE>

4     OTHER CURRENT ASSETS

Other current assets consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
VAT receivables                                                                    722
Income taxes                                                                     1,092
Tool loan receivables                                                            1,949
Shipments to be billed                                                             255
Shareholder deposit                                                             24,500
Other deposits                                                                     420
Prepaid expenses                                                                 1,378
Other                                                                            1,134

                                                                          ------------
Total other receivables                                                         31,450
                                                                          ============
</TABLE>

                                      F-52

<PAGE>

(euro) 24.5 million of the income from the second subordinated Possehl loan of
E 25 million has been put on short-term deposit with the shareholder, as it has
been agreed with the banks not to reduce the notes payables. The deposit can be
re-claimed at any time and bears the same interest rate as the subordinated
loan.

5     DEFERRED INCOME TAXES

The items giving rise to deferred tax assets were as follows:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Deferred tax assets
- Operating loss carry forwards                                                 13,032
- Tangible fixed assets                                                          1,233
- Inventories                                                                      500
- Provisions                                                                        46
- Restructuring                                                                    250
- Other items                                                                      799
- Valuation allowance                                                          (8,599)

                                                                          ------------
Total deferred tax assets, net                                                   7,261
                                                                          ============
Deferred tax assets
- current                                                                        4,906
- non-current                                                                    2,355

                                                                          ------------
Total                                                                            7,261
                                                                          ============
</TABLE>

The deferred tax asset for operating loss carry forwards is related to the
French, Dutch, German, Hong Kong and Malaysian operations.

PBE N.V. consolidated its Dutch subsidiary for tax purposes effective January 1,
1998. Under applicable Dutch tax law, the Company's Dutch related net operating
losses can be carried back for three years and carried forward without
limitation in duration. The Company has determined that it is more likely than
not that tax losses will not be realized through future fiscal earnings. A 100%
valuation allowance has therefore been recorded.

Under applicable German tax law, the Company's German related net operating
losses can be carried-forward without limitation in duration. The Company has
determined that it is more likely than not that tax losses will not be realized
through future fiscal earnings. A 100% valuation allowance has therefore been
recorded.

Effective 1998, the Hong Kong Inland Revenue Ordinance has effected a new tax
legislation. This legislation allows an immediate 100% tax deduction for capital
expenditures made to acquire manufacturing plant, machinery or computers. As a
result, the Hong Kong operation recorded a fiscal loss in 1998, which can be
carried forward without limitation in duration. On the deferred tax portion,
however, the tax benefit from the tax losses is partly offset by the deferred
tax liabilities arising from the 100% write-off for tax purpose compared to
company depreciation rates. As far as a deferred tax asset remains after
netting, the Company has determined that it is more likely than not that tax
losses will not be realized through future fiscal earnings. A 100% valuation
allowance has therefore been recorded for net deferred tax assets.

The net change in valuation allowance was an increase ofE4,507 for the
year ended December 31, 2001, respectively.

The items giving rise to deferred tax liabilities were as follows:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Deferred tax liabilities relating to temporary differences on:
Tangible fixed assets                                                            2,414

                                                                          ------------
Total deferred tax liabilities                                                   2,414
                                                                          ============

Deferred tax liabilities
</TABLE>

                                      F-53

<PAGE>

<TABLE>
<S>                                                                       <C>
- current                                                                        1,260
- non-current                                                                    1,154

                                                                          ------------
Total                                                                            2,414
                                                                          ============
</TABLE>

6     PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Land, buildings and leasehold improvements                                      36,119
Machinery and equipment                                                        209,947
Office furniture and equipment                                                  19,870
Fixed assets under construction                                                  1,090

                                                                          ------------
Property, plant and equipment                                                  267,026
Accumulated depreciation                                                      (174,499)

                                                                          ------------
Total property, plant and equipment, net                                        92,527
                                                                          ============
</TABLE>

Leasehold land in Hong Kong, China and Singapore, included in property, plant
and equipment, is being depreciated over a period of 50 years in Hong Kong and
China and 60 years in Singapore due to the fact that land use right will expire
in these countries in 2047 and 2051, respectively.

The Company has obligations under various capital and operating leases,
primarily for equipment. Assets under capital leases included in property, plant
and equipment are as follows:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Machinery, equipment and office furniture                                          980
Accumulated depreciation                                                          (341)

                                                                          ------------
Total                                                                              639
                                                                          ============
</TABLE>

7     ADVANCES FROM SHAREHOLDERS

Advances from shareholders consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Loan Meco Equipment Engineers, Inc., interest rate fixed at 6.0%
                                                                                     -
Other, non interest bearing                                                         37

                                                                          ------------
Total current account shareholders                                                  37
                                                                          ============
</TABLE>

8     SHORT-TERM DEBT

Short-term debt consists of the following:

                                      F-54

<PAGE>

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Notes payable to banks                                                          57,353
Current portion of long-term debt                                                5,063

                                                                          ------------
Total short-term debt                                                           62,416
                                                                          ============
</TABLE>

At December 31, 2001, the credit facilities of PE N.V. amounted to (euro) 52,183
consisting of:

-     (euro) 9,076 from F. van Lanschot Bankiers N.V.;

-     (euro) 6,806 from ING Bank N.V.;

-     (euro) 6,806 from HSBC Trinkaus & Burkhardt KGaA;

-     (euro) 6,806 from Dresdner Bank AG;

-     (euro) 22,689 from Deutsche BanK AG.

These credit facilities are all multi-currency and are for overdraft, guarantee
and revolving credit purposes. The credit facility agreements include covenants
requiring the Company to maintain a certain solvency ratio and interest coverage
ratio. The Company was in compliance with all applicable covenants at December
31, 2000. However, the Company is not meeting the interest coverage ratio as per
December 31, 2001, for which a waiver is received until at least March 15, 2002.
The credit facilities of Dresdner Bank and Deutsche Bank are frozen and the
Company committed to the other banks to abandon further withdrawals under the
facilities.

The Company's subsidiaries have local credit facilities aggregating E
17,480, for which the following security interests are applicable:

Malaysia

First mortgage on the leasehold land and building of Possehl BESI Electronics
(M) Sdn. Bhd. to secure MYR 30,000 ((euro) 8,876). The first mortgage is granted
through a priority security sharing agreement with the Bank of Commerce
(Malaysia) Berhad and HSBC Bank (Malaysia) Berhad, amounting to MYR 18,000
((euro) 5,326) and MYR 12,000 ((euro) 3,550), respectively.

SingaporeFirst mortgage on the Singapore subsidiary's leasehold building to
secure S$ 3,000 ((euro) 1,827).

China

First mortgage on the leasehold land and building of Shenzhen PBE SEG
Electronics Co., Ltd., to secure CNY 25,000 ((euro) 3,396).

9     LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
A. Commerzbank, Pobocka Praha, interest rates fixed at 6.5% and 5.2%.
                                                                                 1,263

B. Credit du Maroc, interest rate fixed at 7.5%                                    693
C. Bank of Communication, interest rates fixed at 5.94% and 6.534%
                                                                                 3.396

D. Bank of Commerce, Berhad                                                          -
E. HSBC, Labuan                                                                      -
F. HSBC Bank (Malaysia) Berhard                                                      -
G. F. van Lanschot Bankiers N.V.                                                     -
H. ING Bank N.V.                                                                     -
I. HSBC Trinkaus & Burkhardt                                                         -
J. Dresdner Bank AG                                                                  -
   Other                                                                           745
                                                                          ------------
                                                                                 6,097
   Less: current portion of long term debt                                      (5,063)

                                                                          ------------
   Long term debt                                                                1,034
                                                                          ============
</TABLE>

                                      F-55

<PAGE>

A.       The loans of the Commerzbank to Nastrojarna Possehl Electronic S.R.O.
         is secured by ways of a Letter of Comfort from the parent company.
         Repayment will take place partly by half year installments with a final
         maturity at June 28, 2002 and partly at once at July 29, 2002.

B.       The loan of Credit du Maroc to Possehl Electronic Maroc S.A.R.L. is
         secured by a pledge of four stamping presses and a Letter of Comfort
         from the parent company. Monthly installments amount to (euro) 25 with
         a final maturity at November, 2003.

C.       The loans of the Bank of Communication to Shenzhen PBE SEG Electronics
         Co. Ltd. is secured by a mortgage on the first phase building and land
         use rights. Repayment will take place in 2002.

D/E/F.   These loans matured in 2001.

G/H/I/J. Medium term loans drawn under the bank facility of (euro) 6,806 per
         bank, in total (euro) 27,224, have been restated to notes payable to
         banks due to not meeting the interest coverage ratio, for which a
         waiver is received until at least March 15, 2002.

Aggregate required principal payments due on long-term debt are as follows:

<TABLE>
<CAPTION>
                                                                          Total
                                                                           EURO
                                                                          ------
<S>                                                                       <C>
2002                                                                       5,063
2003                                                                         711
2004 and thereafter                                                          323

                                                                          ------
Total                                                                      6,097
                                                                          ======
</TABLE>

10    ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Accrual for sales returns                                                          675
Income taxes                                                                       352
Salaries and payroll related items                                               3,789
Accrued capital expenditures                                                       738
Tool loan clearance                                                                507
Accrued interest                                                                   209
Goods received                                                                     609
Audit and legal fees                                                               217
Accrued commission                                                                  57
Accrued pension benefit obligation                                               1,346
Restructuring severance and other                                                4.148
Other                                                                            4.285

                                                                          ------------
Total accrued liabilities                                                       16,932
                                                                          ============
</TABLE>

The Company and most of its subsidiaries have defined contribution pension
plans, which provide retirement benefits covering substantially all employees.
The Company has no continuing obligations other than the annual contributions.
Aggregate pension plan contributions were (euro) 2,278 in 2001.

The Company's Malaysian and Singaporean subsidiaries have retirement plans that
are integrated with and supplement the governmental benefits provided in the
laws of Malaysia and Singapore, respectively.

The Company's German subsidiary has a defined benefit pension plan covering a
limited group of its employees. This pension plan provides benefits to all
employees who joined the German subsidiary before December 31, 1984 and who were
between 30 and 55 years old.

                                      F-56

<PAGE>

The benefits under this plan are based on years of service and final average
compensation levels. The plan is not funded. Expenses under this plan were
(euro) 99, consisting of service costs of (euro) 37, interest costs of (euro) 62
for the year ended December 2001. The aggregate accumulated benefit obligation,
projected benefit obligation and fair value of plan assets at December 31, 2001
amounted to (euro)1,346, (euro)1,502 and (euro)0, respectively.

The accrued pension obligation was calculated using the following assumptions:

<TABLE>
<S>                                                                          <C>
Discount rate                                                                4.0%
Expected long-term return on assets                                            -
Average residual active life                                                  14 years
</TABLE>

The movement in the aggregated accumulated benefit obligation is as follows:

<TABLE>
<CAPTION>
                                                                          EURO
                                                                          -----
<S>                                                                       <C>
Balance December 31, 2000                                                 1,299
Service cost                                                                 37
Interest cost                                                                62
Payments to employees                                                       (52)

                                                                          -----
Balance December 31, 2001                                                 1,346
                                                                          =====
</TABLE>

11    SUBORDINATED LOAN FROM SHAREHOLDER

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Possehl                                                                         37,738
</TABLE>

The first subordinated loan from Possehl was granted to the Company on July 20,
1999 and is subordinated to all senior liabilities of the Company. Possehl
postponed full repayment of the first subordinated loan to the maturity date of
the loan, being July 2004.

The interest rate is based on  (euro) IBOR plus 2.00%. The effective interest
rate at December 31, 2001 was 5.324%.

The Company has granted Possehl warrants exercisable in the event of:

-     a sale of more than 25% of the outstanding share capital;

-     a sale of more than 35% of the Company's business or assets; or

-     on any public offering.

Under the terms of the warrants, the Company will issue new shares to be
acquired by the holder of the warrants, which will give the holder of the
warrants a (combined) share of 5.0% of the ordinary share capital of the
Company, for which a total purchase price of (euro) 9.1 million will be paid,
thus valuing the equity of the Company at (euro) 181.5 million.

The holder of the warrants will have the right to sell all shares acquired
through exercise of the warrants, along with any sale of shares by the
shareholders of the Company and/or any public offering. The warrants will have a
life of 10 years.

Upon repayment of the loan in full the Company may cancel the warrants in return
for a cash payment of (euro) 2.3 million. A public offering or sale of a
substantial part of the Company's business within a year after such early
cancellation of the warrants will prompt an additional payment to the holder of
the warrant. This payment will be equal to 5% of the positive difference between
the implied equity valuation upon a public offering of equity and the original
E 181.5 million equity value minus (euro) 2.3 million.

After five years the holder of the warrants will have the right to sell the
warrants to the Company for a price of (euro) 1.4 million.

                                      F-57

<PAGE>

The subordinated debt includes covenants requiring the Company to maintain
certain financial ratios. The Company was not in compliance with all applicable
covenants at December 31, 2001, however Possehl granted the Company a waiver
until January 2003 for any contractual default of financial covenants.

On December 10, 2001 Possehl granted a second subordinated loan of (euro) 25
million to the Company. This loan is subordinated in claim on assets to the
other debts, and repayable only after other debts such as to Deutsche Bank AG,
Dresdner Bank AG, HSBC Trinkaus & Burkhardt KGaA, ING Bank N.V. or F. van
Lanschot Bankiers N.V. with a higher ranking claim have been repaid. Repayment
will take place in one amount on December 31, 2004 latest.

The loan is subject to an interest charge of 2.5% in addition to 3-months
EIBOR. The effective interest rate at December 31, 2001 was 5.839%.

The movement in the balance sheet value of the first subordinated loan is as
follows:

<TABLE>
<CAPTION>
                                                                           EURO
                                                                          ------
<S>                                                                       <C>
Original draw down at November 9, 1999                                    13,613
Original issue discount ("OID") of the warrants                           (1,710)
Interest expense                                                             835

                                                                          ------
Balance December 31, 2001                                                 12,738
                                                                          ======
</TABLE>

OID was calculated using the minimum value method with quarterly amortization.
The interest rate of the subordinated loan at December 31, 2000 and 2001 was
7.254% and 5.324%, respectively. The effective interest rate used in the OID
calculation was 9.41%.

The interest expense in 2001 was (euro) 425.

12    OTHER LONG-TERM LIABILITIES

The other long-term liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
Warrants                                                                         1,361
Accrued pension benefit obligation                                                   -

                                                                          ------------
Total other long-term liabilities                                                1,361
                                                                          ============
</TABLE>

Warrants

The OID of the warrants at November 9, 1999 calculated using the minimum value
method amounts to (euro) 1,710 and is classified in other long-term liabilities.
The Company periodically revalues the warrants to fair market.

Pension plans

The accrued pension obligation has been restated to current liabilities, and
more in specific to accrued liabilities. The German subsidiary will cease its
operations in 2002. Therefore the benefit obligation has become a short-term
obligation.

13    RESTRUCTURING

In the second quarter of 2001 the Board of Directors decided to restructure the
Company in order to adjust the organization to changed market conditions. It was
decided to stop the production of leadframes in (euro) ope and Hong Kong,
whereby 4 production facilities were planned to be sold or shut down by the end
of 2001.

The necessary provisions for receivables, obsolete stock, impairment of fixed
assets, termination benefits and estimated relocation costs were recorded per
June 30, 2001 based on judgement of management.

                                      F-58

<PAGE>

After BESI sold its 30% equity interest in the Company to Possehl, the new Board
of Directors revised its decision concerning the production facilities in France
and The Netherlands. It has been decided not to close these production
facilities.

The movement in the restructuring provision was:

<TABLE>
<CAPTION>
                                                          Inventory     Deferred
                            Severance      Impairment     write-off       tax        Other       Total
                            ---------      ----------     ---------     --------     ------     -------
<S>                         <C>            <C>            <C>           <C>          <C>        <C>
Balance
January 1, 2001                     -               -             -            -          -           -
Provision                       7,242           3,776         1,496         (621)     1,857      13,750
Additions to provision          1,556           6,502             -            -        769       8,827
Used from provision            (1,955)         (9,364)       (1,496)           -       (276)    (13,091)
Release of provision           (3,456)           (914)            -          371     (1,589)     (5,588)
                            ---------      ----------     ---------     --------     ------     -------
Balance
December 31, 2001               3,387               -             -         (250)       761       3,898
                            =========      ==========     =========     ========     ======     =======
Restructuring charges           5,342           9,364             -         (250)     1,037      15,493
                            =========      ==========     =========     ========     ======     =======
Cost of sales                       -               -         1,496            -          -       1,496
                            =========      ==========     =========     ========     ======     =======
</TABLE>

Severance

The provision for the reduction in workforce recorded by the Company as per June
30, 2001, includes severance and other benefits for 353 employees, of which 108
are related to the production facilities in France and The Netherlands.
Additionally, in the second half of 2001 the Company recorded a provision for a
further reduction of 63 employees at the German subsidiary. The number of
employees actually terminated as part of the restructuring is 308, of which 252
will leave the Company early 2002 due to formal procedures.

14    FINANCIAL INSTRUMENTS

Due to the international scope of the Company's operations, the Company is
exposed to the risk of adverse movements in foreign currency exchange rates. The
Company is primarily exposed to fluctuations in the value of the Singapore
dollar, Hong Kong dollar, Malaysian ringgit and Eagainst the US dollar,
since approximately 60% of the Company's sales are denominated in US dollar.

The Company's policy has been to hedge only foreign currency exposures resulting
from material contracts. PE has not hedged its currency exposure related to
intercompany payables and external financing of subsidiaries.

The Company has exposure to credit risk to the extent that the counterparty to
the transaction fails to perform according to the terms of the contract. The
amount of such credit risk, measured as the fair value of the forward foreign
currency exchange contract that is in a positive fair value position, was
(euro) 21 at December 31, 2001. The Company believes that the risk of
significant loss from credit risk is remote because it deals with creditworthy
financial institutions. The Company does not typically demand collateral from
the counterparties. The cumulative fair value of the contract is not considered
material to these financial statements.

The following is a summary of the Company's forward foreign currency exchange
contracts:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              2001
                                                                              EURO
                                                                          ------------
<S>                                                                       <C>
To sell US dollar for (euro)o                                                    1,373
To sell US dollars for Japanese yen                                                  -
To sell US dollars for France francs                                                 -
To sell US dollars for Dutch guilders                                                -
</TABLE>

15    COMMITMENTS AND CONTINGENCIES

                                      F-59

<PAGE>

The Company rents buildings, land and leases certain equipment under operating
leases. As of December 31, 2001, the required minimum lease commitments were as
follows:

<TABLE>
<CAPTION>
                                                                           EURO
                                                                          ------
<S>                                                                       <C>
2002                                                                       1,092
2003 to 2006                                                                 504
2007 and thereafter                                                        8,262

                                                                          ------
Total                                                                      9,858
                                                                          ======
</TABLE>

An amount ofE8,577 for land rental related to the Singapore subsidiary is
included.

Rental expense was (euro) 3.1 million in 2001.

As of December 31, 2001, the minimum commitments in respect of contracts placed
for capital expenditures amounted to (euro)0.1 million.

16    RELATED PARTY TRANSACTIONS

Related party transactions are as follows:

<TABLE>
<CAPTION>
                                                                           2001
                                                                           EURO
                                                                          ------
<S>                                                                       <C>
Sales to related companies                                                     -
Purchases from related companies                                           2.502
</TABLE>

17     INCOME TAXES

The components of income before income taxes and investment income from
affiliated companies (including the cumulative effect of change of accounting
principle recorded in 2001) are as follows:

<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                                                   2001
                                                                                   EURO
                                                                          -----------------------
<S>                                                                       <C>
Domestic                                                                                   (2,446)
Foreign                                                                                   (42,176)

                                                                          -----------------------
Total                                                                                     (44,622)
                                                                          =======================
</TABLE>

The Netherlands domestic statutory tax rate is 35%. The reconciliation between
the actual income taxes shown in the consolidated statements of operations and
the expense that would be expected based on the application of the domestic tax
rate to income before taxes, investment income from affiliated and minority
interest is as follows:

<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                                                   2001
                                                                                   EURO
                                                                          -----------------------
<S>                                                                       <C>
"Expected" income taxes based on domestic rate                                            (15,618)
Non deductible expenses                                                                       172
Foreign tax rate differential                                                               3,229
Tax exempt income                                                                           3,069
Increase in valuation allowance                                                             7,841
Other                                                                                      (2,286)

                                                                          -----------------------
Income taxes shown in statements of operations                                             (3,593)
                                                                          =======================
</TABLE>

                                      F-60

<PAGE>

The Company's provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                                                   2001
                                                                                   EURO
                                                                          -----------------------
<S>                                                                       <C>
Current:
- domestic                                                                                     70
- foreign                                                                                     883
Deferred:
- domestic                                                                                    450
- foreign                                                                                  (4,996)

                                                                          -----------------------
                                                                                           (3,593)
                                                                          =======================
</TABLE>

                                      F-61