UNITED STATES
      SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549


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

|(Mark One) |                                                                                   | 
|---------- | --------------------------------------------------------------------------------- | 
|           | REGISTRATION STATEMENT PURSUANT
      TO SECTION 12(b) OR (g)                     | 
|           | OF THE SECURITIES EXCHANGE
      ACT OF 1934                                      | 
|           | OR                                                                                | 
|           | ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE                        | 
|           | SECURITIES EXCHANGE ACT
      OF 1934                                             | 
|           | For the fiscal year ended
      31 December 2006                                  | 
|           | OR                                                                                | 
|           | TRANSITION REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE                    | 
|           | SECURITIES EXCHANGE ACT
      OF 1934                                             | 
|           | OR                                                                                | 
|           | SHELL COMPANY REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE                 | 
|           | SECURITIES EXCHANGE ACT
      OF 1934                                             | 
|           |                                                                                   | 
|           | Date of event requiring
      this shell company report ____________________      | 
|           |                                                                                   | 
|           | **For the transition
      period from___________________to____________________** | 
|           |                                                                                   | 
|           | Commission File Number:
      001-14824                                           | 



|                                                            
|------------------------------------------------------------
|TNT N.V.                                                    
|(Exact name of Registrant as
      specified in its charter)
|Not Applicable                                              
|(Translation of Registrant's name into
      English)       
|                                                            
|                                                            
|Neptunusstraat 41-63                                        
|2132 JA Hoofddorp                                           
|The Netherlands                                             
|(address of principal executive
      offices)              

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

|Title of each class:                                                                                          | Name of each
      exchange on which
|------------------------------------------------------------------------------------------------------------- | ------------------------------------
|                                                                                                              | registered:                         
|                                                                                                             
|American Depositary Shares, each representing
      one ordinary share
      Ordinary shares, par value €0.48 | New York Stock Exchange             

Securities registered or to be registered pursuant
  to Section 12(g) of the Act: None

Securities for which there is a reporting obligation
  pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of
  each of the issuer's classes of capital or common stock as of the close of the
  period covered by the Annual Report:

|Ordinary shares: | 422,767,600 | 
|---------------- | ----------- | 
|Special share:   | 1           | 

Indicate by check mark if the registrant is
  a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

|Yes |  | No
|--- |  | --

If this report is an annual or transition report,
  indicate by check mark if the registrant is not required to file reports pursuant
  to Section 13 or 15(d) of the Securities Exchange Act of 1934.

|Yes |  | No
|--- |  | --

Note - Checking the box above will not relieve
  any registrant required to file reports pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934 from their obligation under those Sections.

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 |  | No
|--- |  | --

Indicate by check mark whether the registrant
  is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
  See definition of "accelerated filer and large accelerated filer" in Rule 12b-2
  of the Exchange Act (Check one):

|Large accelerated filer | Accelerated filer | Non-accelerated filer
|----------------------- | ----------------- | ---------------------

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

|Item 17 |  | Item 18
|------- |  | -------

If this is an annual report, indicate by check
  mark whether the registrant is a shell company (as defined in Rule 12b-2 of
  the Exchange Act).

|Yes |  | No
|--- |  | --

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
  PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant
  has filed all documents and reports required to be filed by Sections 12, 13
  or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution
  of securities under a plan confirmed by a court.

|Yes |  | No
|--- |  | --

Not Applicable

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|I | 
|- | 
|  | 







|                          | 
|------------------------- | 
|THE ANNUAL REPORT 2006    | 
|                          | 
|ALL THE RIGHT CONNECTIONS | 
|                          | 











|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F

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|    |   |                           |   
|--- | - | ------------------------- | --
|TNT | | | ALL THE RIGHT CONNECTIONS | II
|   

| | ALL 
        THE RIGHT 
        CONNECTIONS
| | -------------------------------------------

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|    |     |   |                          
|--- | --- | - | -------------------------
|III | TNT | | | ALL THE RIGHT CONNECTIONS
|   

| | WE 
        MEET 
        IN BERLIN
| | -----------------------------------
| |                                    

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|    |   |                           |   
|--- | - | ------------------------- | --
|TNT | | | ALL THE RIGHT CONNECTIONS | IV
|   

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | ALL THE RIGHT CONNECTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| | The theme of this annual report is All the right
        connections. For an express and mail company like TNT, it is all
        about connections: geographical connections, but also connections between
        people.
      This annual report tells the story of the first year
        of our Focus on Networks strategy. With the sale of logistics
        and freight management TNT is now more than ever a pure-play network company.
        The acquisitions in Spain, in India and China have shown the direction
        TNT is taking: setting up domestic networks in growth regions and tying
        these in to our international network. The growth of our mail networks
        in Europe, boosted by acquisitions in Germany and the United Kingdom,
        also supports our network strategy. The bottom line is we have made a
        big step in 2006 in offering all the right connections to our customers.
      This annual report contains photographs of a number of
        our employees as well as some customers and the members of our Board of
        Management. The employees all have personal stories to tell that tie in
        to our companys goals and ambitions. But this year we also wanted
        to include customers in our annual report. Good employees are vital to
        our success, but so are loyal customers. These customers share their views
        about TNT as their supplier. |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Coresy Melfor, John Ten Heuvel, Angela
      Chiu, Musa Miyen,
      John Stockton, Aygül Öezkan, Theo Lap, K.N. Phaniraj,
      Paloma Romero-Salazar | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                        | 

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|  |     |   |                          
|- | --- | - | -------------------------
|V | TNT | | | ALL THE RIGHT CONNECTIONS
| 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | 
| | WHY WE CAME TO BERLIN
      We decided to make the photographs in Berlin for a number
        of reasons. First of all, Europe is our home market, and Germany, the
        largest market in Europe, is very important to us. Berlin not only is
        the capital city of Germany, it is also in many ways at the heart of Europe,
        well connected to both Western and Eastern Europe. A spider in the European
        web, Berlin symbolises the All the right connections theme.
      After the fall of the wall between East and West Berlin
        in 1989 widespread construction work has changed the face of the city,
        turning Berlin into a showcase of modern architecture and a symbol of
        European optimism and drive. This is also what we want to show in these
        photographs. |  |  | 
| | < Library of German Parliament, Maria-Luise_Lüders
      Haus                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 

| | 
| | 
| | 

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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| |  |  | VI
| |  |  | --
|

CAUTIONARY NOTE REGARDING
    FORWARD-LOOKING
    STATEMENTS Except for historical statements and discussions,
      statements contained in this annual report constitute forward looking
      statements within the meaning of section 27A of the US Securities
      Act of 1933 and section 21E of the US Securities Exchange Act of 1934.
      Other documents of TNT filed with or furnished to the US Securities and
      Exchange Commission, including those incorporated by reference in this
      annual report, may also include forward looking statements, and other written
      or oral forward-looking statements have been made and may in the future
be made from time to time by us or on our behalf. Forward-looking statements include, without limitation, statements
    concerning our financial position and business strategy, our future results
    of operations, including targets, the impact of regulatory initiatives on
    our operations, our share of new and existing markets, general industry and
    macroeconomic growth rates and our performance relative to these growth rates.
    Forward-looking statements generally can be identified by the use of terms
    such as aim, hope, ambition, may, will, expect, intend, estimate, anticipate, believe, plan, seek, continue or
similar terms. By their nature, forward-looking statements involve risk and
    uncertainty because they relate to events and depend on circumstances that
    will occur in the future. These forward-looking statements involve known and
    unknown risks, uncertainties and other factors that are outside of our control
    and impossible to predict and may cause actual results to differ materially
    from any future results expressed in or implied. These forward-looking statements
    are based on current expectations, estimates, forecasts, analyses and projections
    about the industries in which TNT operates, and managements beliefs
    and assumptions about future events. Important factors that may cause such
    differences include, but are not limited to:





    substitution of alternative methods for delivering
      information for our mail services,
    regulatory developments and changes, including
      with respect to the levels of tariffs, the scope of mandatory and reserved
      services, quality standards, liberalisation in the Dutch and European postal
      markets and the outcome of regulatory proceedings,
    competition in our businesses,
    decisions of competition authorities regarding
      proposed joint ventures, acquisitions or divestments,
    compliance with governmental regulations,
    general economic conditions, government and
      regulatory policies and business conditions in the markets served by us,
      including adverse effects of terrorist attacks, use of our delivery capabilities
      by criminals, anthrax incidents, war or the outbreak of hostilities, epidemic
      diseases or natural disasters,
    higher operating costs, as a result of acts
      of war, terrorism, sabotage, hijacking, increased security requirements
      or other similar perils,
    the effect of an economic downturn and other
      risks and trends in the world economy and the timing, speed and magnitude
      of any economic recovery,
    our ability to achieve cost savings and realise
      productivity improvements and the success of investments, joint ventures
      and alliances,
    our ability to pass on rising fuel prices,
    changes in currency and interest rates or
      our credit rating and their impact on our financing costs and requirements,
    disruptions at key sites and facilities,
    incidents resulting from the transport of
      hazardous materials,
    mismatches between our investment in infrastructure
      (aircraft, depots and trucks) and our actual capacity needs,
    strikes, work stoppages and work slowdowns
      and increases in employee costs,
      disruptions in our activities due to employee
        illness as a result of potential pandemic influenza/avian influenza,
    costs of completing acquisitions or divestitures
      and integrating newly-acquired businesses,
    changes in law regarding the limitation of
      liability for the carriage of goods,
    significant changes in the volumes of shipments
      transported through our network, the mix of services purchased by our customers
      or the prices we obtain for our services,
    market acceptance of our new service and growth
      initiatives,
    changes in customer demand patterns,
    the impact of technology developments on our
      operations and on demand for our services,
    disruptions to our technology infrastructure,
      including our computer systems and website,
    our ability to maintain aviation rights in
      important international markets,
    adverse weather conditions,
    if our subcontractors employees were
      to be considered our employees,
    changes in tax laws or their interpretation
      by authorities, disagreements with authorities about our interpretations
      of tax laws, and our ongoing tax investigations,
    impact of cost reduction measures,
    impact of changes in capital markets,
    employee misconduct,




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|VII |  |  | 
|--- |  |  | 
|   



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | higher costs related to implementation
      of regulations such as the Sarbanes-Oxley Act,                                                                              |  | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | changes in environmental laws or their interpretation
      by authorities, and disagreements with authorities about our interpretation
      of environmental laws, and |  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | regulatory developments and changes relating
      to transportation of goods.                                                                                           |  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                          |  | 
| | For further explanation of the
      factors that are most applicable to us, see in particular chapter 10 of
      this annual report on risk factors as well as chapters 2, 3, 4, 5, 7 and
      11.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                          | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                          |  | 
| | Given these uncertainties, no
      assurance can be given as to our future results and achievements. You are
      cautioned not to put undue reliance on these forward-looking statements,
      which only speak as of the date of this annual report and are neither predictions
      nor guarantees of future events or circumstances. We do not undertake any
      obligation to release publicly any revision to any forward-looking statement
      to reflect events or circumstances after the date of this annual report
      or to reflect the occurrence of unanticipated events, except as may be required
      under applicable securities laws. |                                                                                                                                                                          | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                          |  | 
| | All subsequent written and oral
      forward-looking statements attributable to us or persons acting on our behalf
      are similarly qualified.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                          | 





|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F

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| |  |  | VIII
| |  |  | ----
|



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|IX |  |  | 
|-- |  |  | 
|  



|CHAPTER |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | PAGE
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CAUTIONARY
      NOTE REGARDING FORWARD LOOKING STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | VI  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | INTRODUCTION
      AND FINANCIAL HIGHLIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | X   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|1       |  | FROM
      THE CEO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 13  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|2       |  | INFORMATION
      ON TNT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 17  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|3       |  | THE
      EXPRESS DIVISION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 29  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|4       |  | THE
      MAIL DIVISION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 37  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|5       |  | DISCONTINUED
      OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 47  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|6       |  | REPORT
      OF THE SUPERVISORY BOARD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 51  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|7       |  | CORPORATE
      GOVERNANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 55  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|8       |  | REMUNERATION
      REPORT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 67  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|9       |  | BUSINESS
      PRINCIPLES AND SOCIAL RESPONSIBILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | 73  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|10      |  | RISK
      FACTORS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 77  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|11      |  | OTHER
      FINANCIAL INFORMATION ON THE COMPANY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 85  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|12      |  | FINANCIAL
      STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 101 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | UNITED
      STATES OPINION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 103 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CONSOLIDATED
      BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 105 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CONSOLIDATED
      STATEMENTS OF INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 106 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CONSOLIDATED
      CASH FLOW STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 107 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CONSOLIDATED
      STATEMENTS OF CHANGES IN TOTAL EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 108 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 109 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | GENERAL
      INFORMATION AND DESCRIPTION OF OUR BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 109 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 109 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | RECENT
      IFRS PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 115 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | CRITICAL
      ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING TNTS ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 115 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | NOTES
      TO THE CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | 118 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | NOTES
      TO THE CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 136 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | NOTES
      TO THE CONSOLIDATED CASH FLOW STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 148 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | ADDITIONAL
      NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 151 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | TNT
      N.V. CORPORATE BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 172 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | TNT
      N.V. CORPORATE STATEMENTS OF INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 172 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | NOTES
      TO THE CORPORATE BALANCE SHEETS AND STATEMENTS OF INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 173 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | OTHER
      INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 177 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | EXTRACT
      FROM THE ARTICLES OF ASSOCIATION ON APPROPRIATION OF PROFIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 178 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | APPROPRIATION
      OF PROFIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 178 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | SPECIAL
      CONTROL RIGHTS UNDER THE ARTICLES OF ASSOCIATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | 178 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | GROUP
      COMPANIES OF TNT N.V.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 178 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | SUBSEQUENT
      EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 178 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|13      |  | REGULATORY
      ENVIRONMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | 179 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|14      |  | INVESTOR
      RELATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 185 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|15      |  | CROSS
      REFERENCE TABLE TO FORM 20-F                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 195 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     
|        |  | The report of the Board of
      Management is included in chapter 2 up to and including chapter 5, 7 and
      in chapter 11.
      The information in this annual report, and in particular that in chapters
      2, 3, 4, 5, 7 and 11, should be read in conjunction with our consolidated
      financial statements that can be found in chapter 12.
      This annual report can also be viewed on our website: www.tnt.com. Any information
      on our website other than the contents of this annual report does not form
      part of our annual report.
      Investing in our securities involves risk. Carefully consider the risk factors
      set out in chapter 10 of this annual report. |  |     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |     

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|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|INTRODUCTION AND FINANCIAL
        HIGHLIGHTS
      This is TNTs annual report for the financial year
        ended 31 December 2006, prepared in accordance with Dutch regulations.
        It also forms the basis of our annual report on Form 20-F, which will
        be filed with the United States Securities and Exchange Commission (SEC).
        For cross references to Form 20-F, see chapter 15.
    Unless otherwise specified or the context so requires, we, us, our, TNT and
        the company refer to TNT N.V. and all its group companies
    as defined in article 24b of Book 2 of the Dutch Civil Code.
    We are domiciled in the Netherlands, which is one of the
        member states of the European Union (EU) that has adopted the euro as
        its currency. Accordingly, we have adopted the euro as our reporting
        currency. In this annual report the euro is also referred to as €.
        For your convenience certain amounts in euro have been translated into
        United States dollars at an exchange rate of $1.3197 per €1.00.
        This is the noon buying rate in the City of New York on 29 December 2006
        for cable transfers as certified by the Federal Reserve Bank of New York.
        References to dollars, US dollars and $ are
        references to United States dollars. The US dollar amounts presented
        are unaudited. Historical information on the dollar to euro exchange
        rate can be found in chapter 14, page 188. We do not represent that the
        US dollar amounts included in the US dollar convenience translations
        or any amounts translated from euro into any other currency could have
    been converted from euro at the rates indicated.
    Up to and including the year 2004, we prepared our consolidated
        financial statements in accordance with accounting principles generally
        accepted in the Netherlands (Dutch GAAP). As required by EU regulation,
        as of 2005 our consolidated financial statements have been prepared in
        accordance with International Financial Reporting Standards (IFRS) and
        the comparative 2004 data have been adjusted accordingly. For TNT, there
        are no differences between IFRS as adopted by the EU and IFRS as issued
        by the International Accounting Standards Board. For a description of
        the differences between IFRS and US GAAP that affect the reconciliation
        of our IFRS net income and shareholders equity to those under US
    GAAP, see note 35 to our consolidated financial statements. |  | SELECTED FINANCIAL DATA
      The selected financial data below have been derived from
        our audited consolidated financial statements and the related notes included
        in chapter 12 of this report. The selected consolidated financial data
        in accordance with US GAAP for 2006 have been derived from our audited
        consolidated financial statements. Prior years US GAAP selected
        consolidated financial data have been adjusted to reflect the impact of
        our discontinued logistic and freight management businesses.
    We have acquired and divested a number of companies and
        businesses during the years, which limits the comparability of our year-on-year
    figures.
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|XI |  |  | 
|-- |  |  | 
|  



|                                                                           | Year ended and position at 31
      December |  
|-------------------------------------------------------------------------- | -------------------------------------------- | -
|                                                                           |                                              |  
|SELECTED FINANCIAL DATA IFRS                                               | 2006                                         |  
|                                                                           |                                              |  
|                                                                           | US$                                          |  
|                                                                           |                                              |  
|STATEMENTS OF INCOME                                                       |                                              |  
|                                                                           |                                              |  
|Total revenues                                                             | 13,277                                       |  
|                                                                           |                                              |  
|Other income                                                               | 86                                           |  
|                                                                           |                                              |  
|Salaries, pensions and social security contributions                       | (4,466                                       | )
|                                                                           |                                              |  
|Depreciation, amortisation and impairments                                 | (420                                         | )
|                                                                           |                                              |  
|Other expenses                                                             | (6,794                                       | )
|                                                                           |                                              |  
|Total operating expenses                                                   | (11,680                                      | )
|                                                                           |                                              |  
|Total operating income                                                     | 1,683                                        |  
|                                                                           |                                              |  
|Profit before income taxes                                                 | 1,614                                        |  
|                                                                           |                                              |  
|Profit for the year from continuing operations                             | 1,092                                        |  
|                                                                           |                                              |  
|Profit/(loss) from discontinued operations                                 | (207                                         | )
|                                                                           |                                              |  
|Profit attributable to the equity holders of the parent                    | 884                                          |  
|                                                                           |                                              |  
|RATIOS                                                                     |                                              |  
|                                                                           |                                              |  
|Operating margin (%)1                                                      | 12.7                                         |  
|                                                                           |                                              |  
|Average number of outstanding shares (in milions)                          | 420.7                                        |  
|                                                                           |                                              |  
|Earnings per ordinary share (in cents)2                                    | 210.1                                        |  
|                                                                           |                                              |  
|Earnings from continuing operations per ordinary share
      (in cents)2   | 259.3                                        |  
|                                                                           |                                              |  
|Earnings from discontinued operations per ordinary share
      (in cents)2 | (49.2                                        | )
|                                                                           |                                              |  
|Average number of outstanding shares on diluted basis (in
      milions)   | 423.9                                        |  
|                                                                           |                                              |  
|Earnings per diluted share (in cents)2                                     | 208.6                                        |  
|                                                                           |                                              |  
|Earnings from continuing operations per diluted share (in
      cents)2    | 257.4                                        |  
|                                                                           |                                              |  
|Earnings from discontinued operations per diluted share
      (in cents)2  | (48.8                                        | )
|                                                                           |                                              |  
|Dividend per share (in cents)3                                             | 96.3                                         |  
|                                                                           |                                              |  
|Dividend pay-out ratio (%)4                                                | 45.8                                         |  
|                                                                           |                                              |  
|BALANCE SHEETS                                                             |                                              |  
|                                                                           |                                              |  
|Non-current assets                                                         | 4,985                                        |  
|                                                                           |                                              |  
|Current assets                                                             | 2,800                                        |  
|                                                                           |                                              |  
|Assets held for sale                                                       | 540                                          |  
|                                                                           |                                              |  
|Total assets                                                               | 8,325                                        |  
|                                                                           |                                              |  
|Equity                                                                     | 2,650                                        |  
|                                                                           |                                              |  
|as % of total liabilities and equity                                       | 31.8                                         |  
|                                                                           |                                              |  
|Non-current liabilities                                                    | 2,127                                        |  
|                                                                           |                                              |  
|Current liabilities                                                        | 3,355                                        |  
|                                                                           |                                              |  
|Liabilities related to assets classified as held for sale                  | 193                                          |  
|                                                                           |                                              |  
|Total liabilities and equity                                               | 8,325                                        |  
|                                                                           |                                              |  
|CASH FLOWS FROM CONTINUING OPERATIONS                                      |                                              |  
|                                                                           |                                              |  
|Net cash from operating activities                                         | 1,131                                        |  
|                                                                           |                                              |  
|Net cash used in investing activities                                      | 1,409                                        |  
|                                                                           |                                              |  
|Net cash used in financing activities                                      | (2,840                                       | )
|                                                                           |                                              |  
|Changes in cash and cash equivalents                                       | (300                                         | )
|                                                                           |                                              |  
|CASH FLOWS FROM DISCONTINUED OPERATIONS                                    |                                              |  
|                                                                           |                                              |  
|Net cash from operating activities                                         | (83                                          | )
|                                                                           |                                              |  
|Net cash used in investing activities                                      | (40                                          | )
|                                                                           |                                              |  
|Net cash used in financing activities                                      | 48                                           |  
|                                                                           |                                              |  
|Changes in cash and cash equivalents                                       | (75                                          | )
|                                                                           |                                              |  

|(in millions, unless otherwise
      stated)
|--------------------------------------------
|1                                           
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|3                                           
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| |  |  | XII
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|                                                                                  |        |   | Year ended and position at 31
      December |  
|--------------------------------------------------------------------------------- | ------ | - | -------------------------------------------- | -
|                                                                                  |        |   |                                              |  
|SELECTED FINANCIAL DATA US GAAP                                                   |        |   |                                              |  
|                                                                                  | 2006   |   | 2006                                         |  
|                                                                                  |        |   |                                              |  
|                                                                                  | US$    |   | €                                            |  
|                                                                                  |        |   |                                              |  
|INCOME STATEMENT                                                                  |        |   |                                              |  
|                                                                                  |        |   |                                              |  
|Total revenues                                                                    | 13,276 |   | 10,060                                       |  
|                                                                                  |        |   |                                              |  
|Total operating income                                                            | 1,692  |   | 1,282                                        |  
|                                                                                  |        |   |                                              |  
|Profit before income taxes                                                        | 1,622  |   | 1,229                                        |  
|                                                                                  |        |   |                                              |  
|Profit for the year from continuing operations                                    | 1,096  |   | 831                                          |  
|                                                                                  |        |   |                                              |  
|Profit/(loss) from discontinued operations                                        | (228   | ) | (173                                         | )
|                                                                                  |        |   |                                              |  
|Profit attributable to the equity holders of the parent                           | 867    |   | 657                                          |  
|                                                                                  |        |   |                                              |  
|Profit attributable to minority interests                                         | 1      |   | 1                                            |  
|                                                                                  |        |   |                                              |  
|Earnings per ordinary share (in cents)                                            | 206.1  |   | 156.2                                        |  
|                                                                                  |        |   |                                              |  
|Earnings per diluted ordinary share (in cents)                                    | 204.6  |   | 155.0                                        |  
|                                                                                  |        |   |                                              |  
|Earnings from continuing operations per ordinary share
      (in cents)           | 260.4  |   | 197.3                                        |  
|                                                                                  |        |   |                                              |  
|Earnings from continuing operations per diluted ordinary
      share (in cents)   | 258.4  |   | 195.8                                        |  
|                                                                                  |        |   |                                              |  
|Earnings from discontinued operations per ordinary share
      (in cents)         | (54.3  | ) | (41.1                                        | )
|                                                                                  |        |   |                                              |  
|Earnings from discontinued operations per diluted ordinary
      share (in cents) | (53.8  | ) | (40.8                                        | )
|                                                                                  |        |   |                                              |  
|BALANCE SHEETS                                                                    |        |   |                                              |  
|                                                                                  |        |   |                                              |  
|Non-current assets                                                                | 5,336  |   | 4,043                                        |  
|                                                                                  |        |   |                                              |  
|Current assets                                                                    | 2,800  |   | 2,122                                        |  
|                                                                                  |        |   |                                              |  
|Assets held for sale                                                              | 540    |   | 409                                          |  
|                                                                                  |        |   |                                              |  
|Total assets                                                                      | 8,676  |   | 6,574                                        |  
|                                                                                  |        |   |                                              |  
|Equity                                                                            | 2,073  |   | 1,571                                        |  
|                                                                                  |        |   |                                              |  
|as % of total liabilities and equity                                              | 23.9   |   | 23.9                                         |  
|                                                                                  |        |   |                                              |  
|Non-current liabilities                                                           | 3,055  |   | 2,315                                        |  
|                                                                                  |        |   |                                              |  
|Current liabilities                                                               | 3,355  |   | 2,542                                        |  
|                                                                                  |        |   |                                              |  
|Liabilities related to assets classified as held for sale                         | 193    |   | 146                                          |  
|                                                                                  |        |   |                                              |  
|Total liabilities and equity                                                      | 8,676  |   | 6,574                                        |  
|                                                                                  |        |   |                                              |  
|                                                                                 

|(in millions, unless otherwise
      stated)
|--------------------------------------------
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|13 | CHAPTER 1
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|CHAPTER 1 | | | FROM THE CEO | 14
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|DELIVERING ON OUR PROMISES
      DEAR COLLEAGUES, FELLOW
    SHAREHOLDERS, CUSTOMERS
    AND OTHER READERS,
      It is great when a plan comes together, and thats
        exactly what happened for TNT in 2006. This annual report presents TNTs
    first year since we announced our Focus on Networks strategy.
    We believe you will agree, after reading this annual report,
        that 2006 was indeed a successful year for TNT. Not just because of our
        strong operational results, the successful ways some of the hard choices
        of 2005 were executed, or the imaginative new ways our people found to
        improve our business, but because all these things happened AND we laid
        the basis for continued success. In other words strategy in action: delivering
    results and at the same time building new platforms for growth.
    FOCUS ON NETWORKSWith our
        newly focused strategy differentiating us in the market, were pleased to report that the operating results in our
        mail and express networks were strong. The margins in both Mail and Express
        remained at best-in-industry levels. Overall, TNTs revenues grew
        by 7.8% compared to 2005, while operating income was up 11.1%. Our profit
        from continuing operations, which best reflects our business going forward,
      was up 7.5% in 2006.
    In Express, revenue growth was well above 10%, and the
        margin approached 10% for the first time. Capacity at our air and road
        hubs in Liège and Duiven was expanded, and service quality was
        excellent throughout our European network despite occasional volume peaks
        caused by the kilo and consignment growth. We made significant progress
        in standardising our IT systems and key processes throughout our operations.
        In 2006, we added a Boeing 737 and a Boeing 747-400 ERF to our air fleet.
        Three more Boeing 737s and an additional Boeing 747-400ERF will follow
        in 2007. The Boeing 747-400ERFs will fly five times a week between our
        Liège hub and Shanghai, strengthening our Europe-to-China connection.
    As part of our Focus on Networks strategy,
        we made important investments that increase our network coverage in selected
        markets. Simply put, TNT is acquiring domestic (road-based) network coverage
        in key growth markets around the world. We aim to upgrade service levels
        in these networks, standardise the processes and build connections with
        our express operations around the world. As part of this strategy, we
        acquired new growth platforms in 2006: TG+ in Spain and Speedage in India.
        We signed an equity transfer agreement with Hoau in China, and we expect
        to complete this transaction in early 2007. On 10 January 2007, we announced
        the acquisition of Brazilian express operator Mercúrio, establishing
        a leadership position in the domestic express market in South America.
        Integrating these large operations into the TNT express organisation
    will require our full attention in 2007. |  | In Mail, discussions around the liberalisation
          of the European market are playing out at two levels. We are awaiting
          the final decision from The Hague about the postal law in the Netherlands.
          Key outstanding questions concern the timing for fully opening the
          mail market, 1 January 2008 or later?, and the requirements of the
          Universal Service Obligation (USO). We continue to lobby for a level
          playing field, which would mean opening the United Kingdoms and
          Germanys mail markets at the same time the Dutch market opens.
          In Brussels weve seen the European Commissions first proposal
          to open all European postal markets on 1 January 2009. Discussions
          in the European Parliament will continue in 2007.
      In the Dutch market, where 55% of the volume is already
          open to competition, we have experienced competition as well as pressure
          from ongoing substitution. Our Dutch mail volumes declined by some
          4% in 2006, in line with our expectations and cost-saving measures.
          The key priority for our mail business remains continuing to maintain
          the best possible service quality for our customers while making costs
          more flexible inside this leading mail delivery network.
      In December 2006, we announced a series of new initiatives
          in the Master Plans for Mail in the Netherlands. In the coming years
          we expect to implement the next wave of measures aimed at realising
          additional cost savings of €300 million annually, as well as new
          commercial initiatives to counterattack competition. These initiatives
          will make it possible to protect the future cash flow of Mail Netherlands
          despite ongoing volume declines of between 3% and 4% annually. In early
          2007, we will give due attention to discussing these plans with our
          employees through their Works Councils and trade unions.
      Outside the Netherlands, our mail activities saw revenue
          expansion of more than 25%. Our European Mail Networks are active in
          eight European countries. Our main push for growth is aimed at developing
          true competitive offerings in the United Kingdom and Germany. In the
          United Kingdom, where network access is part of the regulatory regime,
          TNT Post won significant mail contracts, more than any other market
          entrant. Transitioning to our own end-to-end delivery network, which
          we believe is the only sustainable way to compete, requires formidable
          efforts in 2007. In Germany we have focused mainly on expanding our
          household coverage by setting up our own networks. Germany is a difficult
          market; conditions there do not even resemble a level playing field.
          Expansion in the market will continue to be expensive until mail volumes
          catch up with the delivery capacity we must put in place to offer German
          customers a competitive alternative. Given the size of the market and
          our progress to date, however, we remain highly committed to developing
          this opportunity.
      As part of European Mail Networks expansion, we acquired
          PostCon in Germany and JD Williams in the United Kingdom, and various
          other smaller mail companies, including Italy.
      SALE OF NON-CORE BUSINESSESDuring 2006 we were able to deliver on our promise to
          focus on what we do best: managing delivery networks. Two businesses
          were disposed of, reducing our workforce by approximately 35,500 employees
    and our revenues by some
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|15 | FROM THE CEO | | | CHAPTER 1
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|€3.7 billion. We believe we found
          good new owners for each of the businesses and good deals were made.
          We thank the various Works Councils for their involvement, advice and
          support during these often complex and sensitive projects.
      In November 2006, we concluded the sale of our logistics
          business. After an intense sales process that involved many interested
          parties, we decided to sell TNT Logistics to Apollo Management L.P.
          for €1,480 million on a cash and debt free basis. Even though
          we had some difficult discussions on the deal and recorded a book loss
          of nearly €100 million, were convinced that the sale was
          a better decision than continuing to try to improve returns from this
          complex business. We received proceeds of €1,335 million, of which €15.5
          million was received in the form of a 5% equity stake in the new company.
          On behalf of all of us in the Board of Management and our Supervisory
          Board, I thank Dave Kulik and all his colleagues, who left TNT to remain
          with the now CEVA Logistics.
      On 16 November, we signed an agreement to sell our freight
          management business to French logistics service provider Geodis SA.
          We owned this good business for just over two years and came to the
          conclusion to sell it for a number of reasons: the logic of keeping
          it in our portfolio had decreased with our exit of logistics, and the
          fit with our remaining network businesses was not strong enough to
          pass on the excellent opportunity to exit. The transaction with Geodis
          was completed on 5 February 2007. The total net proceeds are approximately €450
          million and the resulting book gain around€190
          million. The result of the transaction will be accounted for in the
          first quarter of 2007.
      Finally, we have made good progress in resolving
          our past tax matters. All relevant issues have been investigated and
          in several juridictions we have already reached agreements with those
          authorities. In the United Kingdom the tax authorities will issue initial
          assessments before they and we can effectively continue to seek an
          agreed solution. The amounts raised in such initial assessments could
          exceed our previous disclosed and unchanged estimated realistic total
          contingent liability range of €100-€250 million. However
          we believe, supported by strong external specialist advice, that it
          is unlikely that any of these past tax matters will lead to an additional
          liability beyond what has been accrued to date.
      INSTILLING PRIDE IN OUR PEOPLEAt TNT, we passionately believe that it is our people
          who make the difference. We describe our belief in one sentence: ordinary
          people doing extraordinary things by working together. We have
          a large workforce. Their efforts to produce the best service quality
          every day, to listen to our customers and meet their needs are what
          make our business grow and succeed. Developing our talent and motivating
      all our staff is among TNTs most important strategic priorities.
      For this reason, every year we measure the engagement
          levels of our people, and improving these engagement scores is part
          of the annual compensation incentives for our key managers. Employee
          engagement scores are published in our Social Responsibility report.
    Increasing employee engagement isnt |  | always easy; engaging people in regions
          where our business isgrowing is easier than
          doing so in changing or shrinking areas like our Dutch mail activities.
      Instilling pride in our people is an important metaphor
          for working to continuously improve motivation among all our employees.
          The Board of Management is grateful to all the women and men who worked
          for TNT in 2006, and we congratulate them on their success. Through
          the acquisitions in Spain, China, India, Brasil, Germany and the United
          Kingdom, we added some 25,000 new people to our TNT family. We welcome
          all of you.
      CREATING VALUE FOR OUR SHAREHOLDERSAs
          part of our December 2005 strategy announcement, we promised to optimise
          our capital structure to reflect our reduced
          risk profile after exiting the logistics business. In 2006, we completed
          the first €1 billion share buy-back programme. We followed with
          another €1 billion share buy-back from the proceeds of the sale
          of our non-network logistics business, which completed on 23 January
          2007. As part of the second buy-back, we also bought a substantial
          portion of the shares held by the Dutch government which had decided
          to sell all of its remaining shares in TNT, after having transferred
      its special share in the company to us for free.
      Since January 2005, TNT has distributed about €2.7
          billion to its shareholders, through share buy-back programmes and
          through dividends, which have increased considerably in the past years.
      Dividend per ordinary share.
      
      TNTs share price increased by 23.4% in 2006. In
          terms of total shareholder return TNT outperformed its peers and the
          AEX as shown below.
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|CHAPTER 1 | | | FROM THE CEO | 16
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For the first time, this annual report contains a report about
    our internal control over financial reporting, according to the US Sarbanes-Oxley
    Act standards. We are proud to present this report. Before we were able to do
    this, our people around the globe put in enormous amounts of work to standardise,
improve, document and control our business processes. The medium-term targets associated with our Focus
      on Network strategy are clear:
    For Express between 2007 and 2012: expand
      our leading position in Europe; build leading positions in emerging markets
      (particularly China, India and Brasil) and Special Services; grow revenues
      between 10-15% annually and maintain an operating income margin at around
      10%.
    For Mail between 2007 and 2012: actively maintain
      our strong Dutch mail position amid liberalisation; expand European Mail
      Networks revenues by an average of approximately 18% annually, with a margin
      increasing to 10% in 2012.
    For TNT as a whole between 2007 and 2012:
      optimise our capital structure, while maintaining an investment-grade credit
      rating; find ways to reduce the effective tax rate and increase free cash
      flow.  SHARING RESPONSIBILITY FOR THE WORLD IN WHICH WE OPERATESocial responsibility is an integral part of the
    way we do business at TNT. When we talk with our stakeholders, its clear
    that reducing our impact on the environment is one of their main concerns.
    In 2006, we undertook our Driving Clean project, which aims to achieve a sustainable
    and significant reduction of our vehicle emissions. Well make our existing
    fleet cleaner by retrofitting trucks and vans with soot filters. We have started
    buying new vehicles that meet the highest environmental standards possible,
    and we are investigating all new technologies, both in terms of zero-emission
    vehicles and alternative fuels. In 2007, well launch new initiatives
    aimed at reducing our operations impact on the global climate. Our partnership with the World Food Programme (WFP) continued
  in 2006. Our specialists helped WFP enhance its capabilities by implementing
  fleet management systems and providing training and expertise in supply chain
  management. We also assisted WFP in responding to emergency situations in Indonesia,
  Lebanon, Pakistan and Togo. In May 2006, our employees helped raise awareness
  for world hunger when more than 750,000 TNT and WFP personnel, families and
  friends participated in the third Walk the World event, a global sponsored walk
  encompassing more than 100 countries.





IN CLOSINGAll this made 2006 a successful year for TNT. We have many
  people to thank for their contributions to this success: our customers, our
  employees, our subcontractors and other business partners, our shareholders,
  our Supervisory Board members and every other stakeholder who has taken time
  to help make our company a better one. With the group in good shape we look forward to the opportunities
  and challenges of 2007 with enthousiasm. We consider it our business to deliver
  yours.


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| | INFORMATION ON THE COMPANY | | | CHAPTER 2
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| | If at
        first you dont 
        succeed, make sure 
        you do the next 
        time round!
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| | TNT
      EXPRESS MADRID                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| | The Spanish
      are renowned for their love of life and positive nature, and Paloma could
      only be Spanish. With her ever-ready smile, her interest in those around
      her and carefully composed appearance, its easy to imagine her at
      society events in Barcelona or Madrid. Yet there is another side to Paloma
      that makes her so good at her job. She is extremely reliable and down-to-earth.
      She listens, evaluates and only then will she respond. Thing is, Paloma
      is a financial expert. She and her team have incorporated a major new company
      into the TNT fold, including 70 new depots, putting TNT Express well and
      truly on the map in Spain. Not something you want to do without a clear
      head.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| | Paloma: I will
        certainly remember 2005 and 2006 as they were the busiest of my career
        so far. But also the most interesting. Early 2005, TNT decided to purchase
        the third largest domestic company in Spain, TG+. The Spanish Transaction
        Team, which I was part of, and a team at Head Office in Hoofddorp worked
        day and night to organise the merger. After an initial failure, we succeeded
        second time round in January 2006 thanks to the teams great enthusiasm
        and teamwork. Teamwork is the true driver in business, I think.
      The issues
        we faced, at least in my area, were that there were few existing resources,
        reporting standards were not aligned with TNTs and a huge geographical
        area that the company covered, spread over 70 depots. We needed to ensure
        proper branding, deal with numerous cultural differences and give proper
        training about TNT processes in all areas. Then there was the issue of
        rules and regulations and determining the all-round risks for the project.
        This would have all been fine, but we were trying to combine the set-up
        and transformation of the company while business was still ongoing. Growing
        in fact. That was the tough part. Its like trying to repair a train
        while its running at full steam! |  | Almost everything
        is running smoothly now. Where TG+ offered the warehouse space and vehicles,
        we were able to offer additional volumes and deploy new operational processes.
        And we were fortunate to find genuinely enthusiastic people within TG+
        who are delighted to be part of the TNT family. It was a great marriage
        and we are now a real player on the Spanish market!
      I have to add
        that none of this would have been possible without the hard work and dedication
        of my team and everybody else involved in the deal. And the fact that
        TNT management in Hoofddorp works the way it does. Theyre quick
        to make decisions and treat people with respect, empowering them where
        possible. But theyre also sticklers for detail. I like that. Im
        in Finance after all.
      PALOMA ROMERO-SALAZARTNT Express Madrid
         Financial Director 
        49 years old, married, 2 children | 
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|CHAPTER 2 | | | INFORMATION ON THE COMPANY | 18
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|GROUP BUSINESS DESCRIPTION
      TNT N.V. is a public limited liability company and was
        incorporated under the laws of the Netherlands on 29 December 1997 under
        the name TNT Post Group N.V. We were formed in connection with the transaction
        pursuant to which the company currently known as Royal KPN N.V. demerged
        its mail, express and logistics businesses with retroactive effect to
        1 January 1998. Our statutory name changed to TPG N.V. on 6 August 2001
        and to TNT N.V. on 11 April 2005.
      We provide businesses and consumers worldwide with an
        extensive range of services for their express delivery and mail needs.
        Our services involve the collection, storage, sorting, transport and distribution
        of a wide variety of items for our customers within specific time frames,
        and related data and document management services. Our corporate purpose,
        described in article 4 of our articles of association, provides the basis
        for these activities.
      The history of our company goes back to 1799, when Dutch
        postal services were organized into a single national state enterprise.
        That enterprise formed the basis for the operations of our subsidiary
        Royal TNT Post B.V. In turn, the roots of our express business stretch
        back for 60 years when our time-sensitive door-to-door delivery services
        started as Thomas Nationwide Transport (TNT) in Australia in 1946. Over
        time we have evolved from being the public postal company in the Netherlands
        to the international group providing express delivery and mail services
        we are today. The discontinuation of our logistics business as of 4 November
        2006 and our freight |  | management business as of 5 February 2007 are part of
        that development. We report on the logistics and freight management businesses
        under Discontinued Operations. See chapter 5.
      To date our mail business in the Netherlands is subject
        to regulations (such as price cap mechanisms) imposed by the Dutch Postal
        Act and other postal regulations. At the same time, that act extends to
        our mail business the exclusive right to provide certain reserved postal
        services. For more information on the operation of the Dutch postal system
        and concession see chapters 4 and 13. Our other services are not subject
        to such specific regulations nor are they guarded from competition. Operating
        the Dutch postal concession also impacts our companys governance.
      Since 20 November 2006 the State of the Netherlands no
        longer holds shares in our company. On that date the State sold all if
        its ordinary shares in TNT, representing approximately 10.9% of our outstanding
        ordinary share capital at the time. Previously, on 17 November 2006, the
        State of the Netherlands transferred the one special share in our company
        to us for free. For more information on the background to these transactions
        see page 156.
      TNT N.V. is the parent company of the group. We have
        our corporate seat in Amsterdam, the Netherlands and are registered in
        the Commercial Register in Amsterdam under number 27168968.
      The following table sets forth, as at 31 December 2006,
        the name and jurisdiction of incorporation of our significant subsidiaries.





|SIGNIFICANT SUBSIDIARIES        |                |                 |  
|------------------------------- | -------------- | --------------- | -
|                                |                |                 |  
|                                |                |                 |  
|Company                         | Country        | Equity Interest |  
|                                |                |                 |  
|Koninklijke TNT Post B.V.       | Netherlands    | 100             | %
|                                |                |                 |  
|TNT Express Holdings B.V.       | Netherlands    | 100             | %
|                                |                |                 |  
|TNT Express Worldwide N.V.      | Netherlands    | 100             | %
|                                |                |                 |  
|TNT Finance B.V.                | Netherlands    | 100             | %
|                                |                |                 |  
|TNT Headoffice B.V.             | Netherlands    | 100             | %
|                                |                |                 |  
|TNT Holdings (Deutschland) GmbH | Germany        | 100             | %
|                                |                |                 |  
|TNT Holdings (UK) Ltd.          | United Kingdom | 100             | %
|                                |                |                 |  
|TNT Holdings B.V.               | Netherlands    | 100             | %
|                                |                |                 |  
|TNT UK Ltd.                     | United Kingdom | 100             | %
|                                |                |                 |  
|

|The full list containing the information referred
          to in article 379 and article 414 of Book 2 of the Dutch Civil Code
          is filed
    at the office of the Chamber of Commerce in Amsterdam.
    We are currently listed on the Amsterdam and New York
        stock exchanges. In 2006 we delisted from both the London and Frankfurt
        stock exchanges because the costs and requirements for these listings
        were not justified given the low trading volume in our shares on those
        two exchanges. The last day on which our stock traded on the London Stock
        Exchange was 20 March 2006, and 31 May 2006 was the last day on which
    our stock traded on the Frankfurt Stock Exchange. |  | 
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|19 | INFORMATION ON THE COMPANY | | | CHAPTER 2
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MISSION AND STRATEGY Our mission is to exceed our customers expectations
    in the transfer of their goods and documents around the world. We deliver
    value
  to our clients by providing the most reliable and efficient solutions through
  delivery networks. We seek to lead the industry
      by:
    instilling pride in our people,
    creating value for our shareholders, and
    sharing responsibility for the world in which
         we operate. Our strategy is to focus on providing delivery services by
    expertly managing delivery networks. This strategy contains manageable execution
    risks and is based on our core strengths with the objective of achieving profitable
    growth. We manage a portfolio of networks with different speed characteristics,
    ranging from same-day to some day, and different weight characteristics, ranging
    from letters to heavy parcels and pallets. We pick up, transport, sort, handle,
    store and deliver documents, packets, parcels and freight by combining physical
    infrastructures such as depots and trucks, electronic infrastructures such
    as billing and track-and-trace systems and commercial infrastructures to attract
    and retain customers. Our networks are in different development phases and offer
  a plethora of growth opportunities. Our most mature business is our mail network
  in the Netherlands, where we actively seek to maintain our market leadership
  in a declining market with increasing competition. Our express networks in Asia,
  in particular in India, China and South East Asia, and in selective emerging
  markets, such as Brazil, are on the other end of the spectrum. In these geographies
  we can shape the market, strongly grow our networks and attain market leadership.
  In Europe we continue to grow our express and mail networks building on our
  existing strong position. We aim to accelerate growth in the networks organically
  as well as through selected acquisitions. The chart below reflects an analytical and conceptual view
  on the relation between strategic focus and financial focus. It does not represent
  a management steering segmentation.  The combination of mail and express networks in our current
     portfolio has several strategic advantages. We believe the combination of
    business-to-business
  and business-to-consumer deliveries, for which we have unique expertise in
    our  express




and mail divisions respectively, becomes increasingly relevant
  in an era where e-related deliveries are growing exponentially and mega cities
  which require complex high density citizen services will emerge. We also believe
  that over time certain operational and strategic synergies can be achieved across
  our portfolio, for example in linehaul activities. Having both mail and express
  in our portfolio gives us unique cross-selling opportunities. And finally, the
  fact that mail and express require comparable management capabilities, such
  as network design, execution and planning, customer focus, market segmentation
  and brand awareness, allows us to optimise management and competence development
  over the group. In 2006 we delivered on our
        promise to focus on networks, exit non-network related activities and
      optimise our capital structure:
    focus on our core capability: providing delivery
      services by expertly managing a portfolio of delivery networks in Mail and
      Express, where we believe our competitive advantage can be sustained and
      enhanced. We have successfully expanded in key markets like China, India
      and Brazil. We continue to explore the opportunity to expand the strategy
      by developing a standard parcels service and broader focused network services,
    disposal of non-core capability related activities:
      in 2006 we have successfully sold our logistics and freight management businesses,
    optimisation of our capital structure: we
         have regeared our balance sheet under the Focus on Networks
      strategy to reflect the more predictable cash flow profile of the group.
       A €1 billion share buy back program started on 6 December 2005 and
       was  successfully completed in April 2006, and most of the logistics sales
       proceeds
      was returned to our shareholders through another €1 billion share
      buy  back program that completed on 23 January 2007. See also the next
      chapter
      on financial strategy and chapter 14, page 189. Based on our refined strategy we now manage our business through
  two divisions: Express and Mail. In Express our strategic intent is fourfold: to build the number
  one position in Europe, to build a leading position in selected intercontinental
  flows (in particular between China, India and Europe), to build a number one
  position in selective emerging markets and to expand our position in the broader
  market through offering special services. Underpinning our express networks
  is a strong focus on key customer interfacing processes, by understanding customer
  needs, winning and keeping profitable customers, delivering excellent customer
  service and delivering on time and in perfect condition. In all four strategic
  intent areas we have made excellent progress in 2006. We have continued to strengthen
  our position in Europe by, amongst others, increasing the capacity of our air
  hub in Liège, successfully integrating the recently acquired company
  TG+ and capturing high growth in Eastern Europe. We have successfully launched
  our own Boeing 747 freighter service between China and Europe to capture the
  strong growth on this intercontinental flow. We have acquired domestic networks
  in three of the four so-called BRIC countries, viz. Brazil, India and China.
  And we have expanded our position in special services by further growth in
  our
  same-day business and continued fast growth in time-critical freight. We believe
  the combination of focus, entrepreneurship, business excellence




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and customer care will ensure this success story to continue.More details on Express can be found in Chapter 3. In Mail our strategic intent is twofold: to actively maintain
  our market share in our home market the Netherlands and to capture growth opportunities
  outside our home market. In the Netherlands we are faced with continuing competitive
  pressure and substitution. We believe that without new commercial and cost initiatives
  we could see a volume decline of up to 40% by 2015. At the end of 2006 we have
  therefore launched a number of initiatives along two tracks: commercial initiatives
  to limit volume decline to 30% by 2015 and cost initiatives to save €300 million of annual costs. At the same time we have
  made substantial progress in growing our mail activities outside the Netherlands.
  We acquired companies in Germany and the United Kingdom and we have significantly
  expanded our regional networks. We believe the combination of cost and commercial
  initiatives in the Netherlands and growth initiatives outside the Netherlands
  will contribute to Mail being able to continue to deliver a strong cash flow
  going forward. More details on Mail can be found in Chapter 4. FINANCIAL STRATEGY TNTs financial strategy
      is structured on three pillars:
    driving business performance by using value-based
      performance measures and standardisation of business processes,
    maintaining the right financial flexibility
      to support growth platforms via capital expenditure and merger and acquisitions,
      and
    keeping the capital structure efficient, around
      an investment grade long term credit rating of BBB+. These three key components of
      the financial strategy directly relate to:
    effective risk management, internal control
      and compliance,
    aligned legal and funding structures, and
    a balance in short and medium term shareholder
      returns through profitable growth, dividends and incidental share repurchase
      or other shareholder returns from medium term excess cash. In line with this financial strategy focus, TNT was able to
  pay out dividends of in total almost €1.2 billion over the past five years
  and returned €2.4 billion to its shareholders via share buy backs. TNTs current capital structure
      is based on and managed along the following components:
    maintain a credit rating at investment grade
      around BBB+ level,
    an availability of at least €500 million
      of undrawn committed facilities, via a €1 billion Euro Commercial Paper
      programme, backstopped until 2012 by a bank facility,
    structural funding via a combination of public
      and bank debt, with a risk weighted mix of fixed and floating interest,
    cash pooling systems facilitating optimised
      cash requirements for the group, and
    a tax optimal internal and external funding
      focused at optimising the cost of capital for the group, within long term
      sustainable boundaries.




The credit rating for the group, as given by Standard &
  Poors Ratings Services (S&P) and Moodys Investors Services (Moodys),
  results from an evaluation and analysis of many different factors. On a medium
  term basis TNT focuses on maintaining an investment grade credit rating around
  BBB+. For this purpose we monitor the development of three key financial
  parameters as defined below: Funds from Operations (Ffo)
      to total net debt:
    Ffo is defined as: net income plus depreciation
      plus change in provisions, plus correction for depreciation in leases.
    Total net debt is defined as: on-balance sheet
      interest bearing debt minus free cash, plus implicit debt in leases and
      unfunded pension liabilities after tax.
    The S&P norm for BBB+ is to
      be above 35%. Total net debt to capital:
    Capital is defined as the sum of total
      net debt (see above) plus the book value of equity.
    The S&P norm for BBB+ is to
      be below 41%. Ebitda (earnings before interest,
      tax, depreciation and amortisation) to interest cover:
    Ebitda is corrected for implicit interest
      in leases.
    Interest is corrected for implicit interest
      in leases plus the interest on unfunded pension liabilities after tax.
    The S&P norm for BBB+ is to
      be above 7,7. The weighted mix of these parameters forms an important financial
  building block in the credit rating framework. The current long term credit
  rating of TNT is A-(negative outlook) from S&P and A3
  (stable outlook) from Moodys. For its financial requirements in the context
  of its capital structure components, TNT works with approximately ten relationship
  banks. This number is influenced by financial service requirements of TNT related
  to its global spread in activities, businesses and legal entities.TNT aims to grow its free cash flow medium term. We define
  our free cash flow as the net cash from operating activities minus capital expenditure
  on property plant and equipment and intangible assets. Part of the free cash
  flow is used for dividends, resulting after the appropriation to the reserves
  of (part of) the profit attributable to the shareholders. Remaining free cash
  flow will be allocated to strategic profitable growth of the group. In case
  of medium term excess cash other forms of value creation for our shareholders
  will be evaluated, including tax exempt share buy backs. All of our financial
  strategies and actions will take into account the key components of our capital
  structure as mentioned. BRANDING In a world where a strong brand is key in helping to drive
  a business forward, the implementation of a focused branding strategy is essential. On 11 April 2005 we visibly launched our one brand
  initiative by changing our statutory name to TNT N.V., a clear signal that this
  globally recognised brand is to become the single face for all of TNTs
  activities.The TNT one brand strategy is being implemented
    throughout the business, in 2006 most notably within the Netherlands


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|21 | INFORMATION ON THE COMPANY | | | CHAPTER 2
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where Royal TPG Post B.V. changed it statutory name to Royal TNT Post B.V. on 16 October 2006. The change of our name is
  accompanied by a change of the companys trucks, vans, letter boxes and
  corporate wear from red to orange. During 2006, this change has been substantially
  completed. The strapline Its our business to deliver yours,
  expressing our business and customer focus, was furthermore successfully launched
  for all our international activities in 2006. HUMAN RESOURCES AND LABOUR RELATIONS Human resourcesDeveloping our talent and motivating our staff are among our
  top strategic priorities. With a work force of approximately 140,000 located
  in more than 60 countries, local circumstances play an important role in shaping
  personal development goals as well as perceptions of TNT as an employer.The global engagement survey is an important tool to measure
  whether we are successful in increasing employment pride and motivation. The
  company-wide engagement survey undertaken in 2006 shows that our engagement
  scores are clearly higher than the industry benchmark. However, there is also
  room for further strengthening. We will address all areas of employee engagement
  again in 2007 to reassure progress and developments. See also our Social Resposibility
  Report.The talent development for our management positions is a key
  component for a sustainable success of our company going forward. Processes
  are in place and are continuously further improved to effectively balance and
  match our requirements as a company and the development potential and personal
  interest of our people. Labour relationsA significant number of our employees in Europe are presently
  represented by trade unions. Except for our employees in Australia, our employees
  outside Europe are generally not represented by trade unions. The level of
  representation
  in Australia is less than 50%. Our labour relations in- and outside Europe
  have been good, and we have not experienced any material work stoppages in
  recent
years. Wages and general working conditions in the Netherlands and
  the United Kingdom are the subject of centrally negotiated collective bargaining
  agreements. Within the limits established by these agreements, our operating
  companies negotiate directly with unions and other labour organisations representing
  our employees. Collective bargaining agreements relating to remuneration typically
  have a term of one or two years. In addition to trade unions, we also consult from time to
    time  with various local, national and European works councils. Employees
    generally
  elect the members of works councils. Some of these works councils primarily
     have an advisory role, but in other cases, e.g. the Netherlands, we may
    be required
  to consult or ask prior approval from one or more of the works councils. Under
     Dutch law, our central works council may, furthermore, make recommendations

  for candidates to fill vacancies on our Supervisory Board. In addition, we
    are obliged




to apprise the European works council of activities that affectour workforce in Europe. For the number of our employees and full-time equivalents
    see  note 19 of our consolidated financial statements on page 136. Further
    information
  on labour related issues is included in our social responsibility report that
     may be viewed on our website. OUR COMMITMENT TO COMMUNITY GovernanceWe are committed to good corporate governance and have embraced
  the spirit of corporate governance reform. We have governance procedures and
policies in place. See chapter 7. Social and environmental impactWe strive to improve the social and environmental impact of
  our business on communities around the world. We aspire to help people realise
  their potential and to meet the needs of the current generation, without producing
a poorer world for future generations.Our commitment to protecting the environment includes, where
    reasonably possible, promoting both the reduction of emissions through efficient
    route planning as well as the use of cleaner alternative fuels and the replacement
    of road vehicles and aircraft by cleaner versions. In 2006 we further increased
    the coverage of ISO 14001 certified environmental management systems and
    retained our industry leadership position in the Dow Jones Sustainability
    Index. For
    further information see chapter 9. Corporate citizenshipWe have established a strategic partnership with the United
   Nations World Food Programme (WFP), in which we share resources and know-how

  in the fight against hunger. This partnership is described in more detail in

chapter 9. ReputationTNT aims to be a leader in our industry and therefore strives
  to be best in class in many fields. There are several ways to determine
  our success in fulfilling these ambitions. We continuously track our quality
  levels, for instance, and we measure customer satisfaction on a regular basis.
  Our quality and service have been recognised by many external organisations.
  An overview of awards, prizes, nominations and accreditations is published on
our website.




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|CHAPTER 2 | | | INFORMATION ON THE COMPANY | 22
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GROUP FINANCIAL REVIEW As of 2005 all European listed companies are required to prepare
    their consolidated financial statements in accordance with IFRS as adopted
    by the European Union. For more details we refer to chapter 12 Significant
Accounting Policies.






|                                                        | As at and for the year ended
      at 31 December |  
|------------------------------------------------------- | ------------------------------------------------- | -
|                                                        |                                                   |  
|                                                        | 2006                                              |  
|                                                        |                                                   |  
|                                                        | US$                                               |  
|                                                        |                                                   |  
|Segmental operating revenues 1,2                        |                                                   |  
|                                                        |                                                   |  
|Express                                                 | 7,933                                             |  
|                                                        |                                                   |  
|Mail                                                    | 5,365                                             |  
|                                                        |                                                   |  
|Non-allocated and inter-company                         | (21                                               | )
|                                                        |                                                   |  
|Total operating revenues 3                              | 13,277                                            |  
|                                                        |                                                   |  
|                                                        |                                                   |  
|                                                        |                                                   |  
|Depreciation, amortisation and impairments              | 420                                               |  
|                                                        |                                                   |  
|Total operating income                                  | 1,683                                             |  
|                                                        |                                                   |  
|as % of total operating revenues                        | 12.7                                              |  
|                                                        |                                                   |  
|Profit for the year from continuing operations          | 1,093                                             |  
|                                                        |                                                   |  
|Profit/(loss) from discontinued operations              | (207                                              | )
|                                                        |                                                   |  
|Profit attributable to the equity holders of the parent | 884                                               |  
|                                                        |                                                   |  

|(in millions, except percentages)
|---------------------------------
|1                                
|2                                
|3                                

2006In 2006, we had total operating
    revenues of € 10,060 million.
  Our express division accounted for 59.8% of our group operating revenues and
    45.5% of our group operating income. Our mail division accounted for 40.4%
    of
our group operating revenues and 59.6% of our group operating income. 2005In 2005, we had total operating
    revenues of €9,329 million.
  Our mail division accounted for 42.4% of our group operating revenues and 67.5%
    of our group operating income. The express business (excluding freight management)
    accounted for 57.5% of our group operating revenues and 41.5% of our group
    operating
income. Key factorsKey factors that affect our financial results include:
    the volumes of mail we deliver,
    the number of shipments transported through
      our networks,
    the mix of services we provide to our customers,
    the prices we obtain for our services,
    the average number of working and delivery
      days in a year,
    the speed of our network expansion,
    our ability to manage our capital expenditures,
    operating expenses,
    our ability to match our operating expenses
      to shifting volume levels, and
    our ability to integrate acquisitions.




Our express and mail businesses provide services to customers
  and account for revenues for those services on a daily basis. Results of operations
  are therefore influenced by the average number of working and delivery days
  in a year. We use total revenues, i.e. net sales plus other operating
  revenues, to assess the performance of our business. We believe that other operating
  revenues, which consist primarily of rental income from temporarily leased-out
  property and passenger/charter revenues, are a recurring element and we allocate
  them to our businesses when reviewing their performance. We attribute revenues and expenses to our businesses based
  on the underlying nature of the transaction that gave rise to the revenue or
  expense and the business involved. We call revenues and expenses that we do
  not allocate to businesses non-allocated. These revenues or expenses
  occur at the group level, and we do not consider them part of the businesses
  operations. This method of allocating revenues and expenses is consistent with
  how we internally manage our businesses.


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|23 | INFORMATION
        ON THE COMPANY | | | CHAPTER
        2
|-- | ---------------------------------- | - | -----------------
|  

RESULTS OF OPERATIONS

|                                                 |         |   |        |   | Year ended at 31 December |  
|------------------------------------------------ | ------- | - | ------ | - | ------------------------- | -
|                                                 |         |   |        |   |                           |  
|CONSOLIDATED GROUP RESULTS                       | 2006    |   | 2006   |   | variance %                |  
|                                                 |         |   |        |   |                           |  
|                                                 | US$     |   | €      |   |                           |  
|                                                 |         |   |        |   |                           |  
|Total operating revenues                         | 13,277  |   | 10,060 |   | 7.8                       |  
|                                                 |         |   |        |   |                           |  
|Other income                                     | 86      |   | 65     |   | 71.1                      |  
|                                                 |         |   |        |   |                           |  
|Total operating expenses                         | (11,680 | ) | (8,849 | ) | (7.7                      | )
|                                                 |         |   |        |   |                           |  
|Total operating income                           | 1,683   |   | 1,276  |   | 11.1                      |  
|                                                 |         |   |        |   |                           |  
|as % of total operating revenues                 | 12.7    |   | 12.7   |   |                           |  
|                                                 |         |   |        |   |                           |  
|Net financial expense                            | (62     | ) | (47    | ) |                           |  
|                                                 |         |   |        |   |                           |  
|Income taxes                                     | (521    | ) | (395   | ) | (5.1                      | )
|                                                 |         |   |        |   |                           |  
|Results from investments in associates           | (8      | ) | (6     | ) | (200.0                    | )
|                                                 |         |   |        |   |                           |  
|Profit for the year from continuing operations   | 1,092   |   | 828    |   | 7.5                       |  
|                                                 |         |   |        |   |                           |  
|Profit/(loss) from discontinued operations       | (207    | ) | (157   | ) | (44.0                     | )
|                                                 |         |   |        |   |                           |  
|Profit for the year                              | 885     |   | 671    |   | 1.5                       |  
|                                                 |         |   |        |   |                           |  
|Attributable to:                                 |         |   |        |   |                           |  
|                                                 |         |   |        |   |                           |  
|Minority interests                               | 1       |   | 1      |   | (50.0                     | )
|                                                 |         |   |        |   |                           |  
|Equity holders of the parent                     | 884     |   | 670    |   | 1.7                       |  
|                                                 |         |   |        |   |                           |  
|Earnings per ordinary share (in cents) 1         | 210.1   |   | 159.3  |   | 9.9                       |  
|                                                 |         |   |        |   |                           |  
|Earnings per diluted ordinary share (in cents) 2 | 208.6   |   | 158.1  |   | 9.5                       |  
|                                                 |         |   |        |   |                           |  

|(in millions, except percentages
        and per share data)
|------------------------------------------------------------
|1                                                           
|2                                                           



|                                |        |   |        |   | Year ended at 31 December |  
|------------------------------- | ------ | - | ------ | - | ------------------------- | -
|                                |        |   |        |   |                           |  
|OPERATING REVENUES BY SEGMENT   | 2006   |   | 2006   |   | variance %                |  
|                                |        |   |        |   |                           |  
|                                | US$    |   | €      |   |                           |  
|                                |        |   |        |   |                           |  
|Express                         | 7,933  |   | 6,011  |   | 12.1                      |  
|                                |        |   |        |   |                           |  
|Mail                            | 5,365  |   | 4,065  |   | 2.8                       |  
|                                |        |   |        |   |                           |  
|Non-allocated and inter-company | (21    | ) | (16    | ) | (245.5                    | )
|                                |        |   |        |   |                           |  
|Total operating revenues        | 13,277 |   | 10,060 |   | 7.8                       |  
|                                |        |   |        |   |                           |  

|(in millions, except
        percentages)
|-----------------------------------------
|1                                        



|                                  | Year ended at 31 December | 
|--------------------------------- | ------------------------- | 
|                                  |                           | 
|OTHER INCOME BY SEGMENT           | 2006                      | 
|                                  |                           | 
|                                  | US$                       | 
|                                  |                           | 
|Express                           | 8                         | 
|                                  |                           | 
|Mail                              | 77                        | 
|                                  |                           | 
|Non-allocated                     | 1                         | 
|                                  |                           | 
|Total other income                | 86                        | 
|                                  |                           | 
|(in millions, except percentages) |                           | 



|                            |       |   |       |   | Year ended at 31 December |  
|--------------------------- | ----- | - | ----- | - | ------------------------- | -
|                            |       |   |       |   |                           |  
|OPERATING INCOME BY SEGMENT | 2006  |   | 2006  |   | variance %                |  
|                            |       |   |       |   |                           |  
|                            | US$   |   | €     |   |                           |  
|                            |       |   |       |   |                           |  
|Express                     | 765   |   | 580   |   | 21.8                      |  
|                            |       |   |       |   |                           |  
|Mail                        | 1,004 |   | 761   |   | (1.8                      | )
|                            |       |   |       |   |                           |  
|Non-allocated               | (86   | ) | (65   | ) | 36.9                      |  
|                            |       |   |       |   |                           |  
|Total operating income      | 1,683 |   | 1,276 |   | 11.1                      |  
|                            |       |   |       |   |                           |  

|(in millions, except
        percentages)
|-----------------------------------------
|1                                        



|                                            
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|2006
            ANNUAL REPORT AND FORM 20-F

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|CHAPTER
          2 | | | INFORMATION ON
          THE COMPANY | 24
|------------------- | - | ------------------------------------ | --
|                   



GROUP OVERVIEW
    2006/2005Total operating revenues increased by 7.8% in 2006 compared
    to 2005. Operating income increased by 11.1%, mainly due to an increase in
    our express business. Our express business achieved 12.1% higher operating revenues
      compared to 2005. The improved performance is broadly based across the
      continents, but mainly due to continued growth in our international businesses
      as well as special services and further supported by acquisitions. Express
      operating income increased by 21.8%, primarily due to substantial volume
      growth, particularly in the international business across all customer
      segments, and effective cost control, including further network optimalisation
      and continued yield improvements. In our mail business, operating revenues increased by 2.8%
      in 2006, mainly due to substantial volume growth in addressed European
      Mail Networks and partly offset by the continued volume decline in addressed
      Mail Netherlands. The latter volumes continued to decline due to competition,
      substitution and substantially fewer bank mailings. The volume decline
      was strongly mitigated by the product mix and, to a lesser extent, price
      effects. Operating income of our mail business decreased by 1.8%. This
      decrease is mainly due to the continuing expansion of European Mail Networks
      capacity and rebranding costs and partly offset by positive price mix effects
      and continued progress in improving productivity and cost control in Mail
      Netherlands. 2005/2004Total operating revenues increased by 5.7% in 2005
    compared to 2004. Operating income increased by 3.4%, mainly due to an increase
    in our express business. Our express business achieved 8.1% higher operating revenues
      in 2005 compared to 2004, mainly due to continued growth in its international
      businesses. Express operating income increased by 25.9% in 2005 compared
      to 2004, primarily due to good




volume growth, particularly in the international business
      across all customer segments, good cost control, including increased utilisation
      of the European networks, and continued yield improvements. In our mail business, operating revenues increased by 2.7%
      in 2005, mainly due to substantial addressed volume growth in European
      Mail Networks, partly offset by the continued decrease in addressed Mail
      Netherlands volumes (3.1%). These volumes continued to decline in 2005
      compared to 2004 due to competition and substitution. Operating income
      of our mail business decreased by 3.5%. This decrease is mainly due to
      a structural cost increase in salaries and social security contributions
      in Mail Netherlands, partly offset by continued progress in improving productivity
      and cost control in Mail Netherlands and expansion of European Mail Networks. GROUP OPERATING REVENUES2006/2005Total operating revenues increased by €731 million (7.8%)
    to €10,060 million in 2006 compared to 2005. Our express business contributed
    an increase of €648 million and our mail business contributed an increase
    of €110 million to this growth. Organic growth, defined as the growth calculated against
      2005 foreign exchange rates and excluding the effect from the first time
      consolidation of acquisitions and the deconsolidation of disposals, was
      responsible for 6.3% of total group operating revenues growth. The consolidation
      effect from acquisitions and deconsolidation effect from disposals accounted
      for 1.7%. Unfavourable changes in foreign exchange rates negatively impacted
      the revenue growth by 0.2%. 2005/2004Total operating revenues increased by €502
    million (5.7%) to €9,329 million in 2005 compared to 2004. Our mail
    business contributed an increase of €103 million and our express business
    (excluding freight management) €400 million to this growth.




GROUP OPERATING EXPENSES

|                                                     |        |  |       |  | Year ended at 31 December |  
|---------------------------------------------------- | ------ |  | ----- |  | ------------------------- | -
|                                                     |        |  |       |  |                           |  
|                                                     |        |  |       |  |                           |  
|OPERATING EXPENSES                                   | 2006   |  | 2006  |  | variance %                |  
|                                                     |        |  |       |  |                           |  
|                                                     | US$    |  | €     |  |                           |  
|                                                     |        |  |       |  |                           |  
|Cost of materials                                    | 540    |  | 409   |  | 0.2                       |  
|                                                     |        |  |       |  |                           |  
|Work contracted out and other external expenses      | 5,490  |  | 4,160 |  | 16.1                      |  
|                                                     |        |  |       |  |                           |  
|Salaries, pensions and social security contributions | 4,466  |  | 3,384 |  | 2.0                       |  
|                                                     |        |  |       |  |                           |  
|Depreciation, amortisation and impairments           | 420    |  | 318   |  | 5.0                       |  
|                                                     |        |  |       |  |                           |  
|Other operating expenses                             | 764    |  | 578   |  | (4.9                      | )
|                                                     |        |  |       |  |                           |  
|Total operating expenses                             | 11,680 |  | 8,849 |  | 7.7                       |  
|                                                     |        |  |       |  |                           |  
|(in millions, except percentages)                    |        |  |       |  |                           |  



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|25 | INFORMATION
            ON THE COMPANY | | | CHAPTER
        2
|-- | -------------------------------------- | - | -----------------
|  



2006/2005Total operating expenses increased by €630 million
      (7.7%) to €8,849 million in 2006 compared to 2005. Overall, the organic
      growth in operating expenses was 5.6%. The increase due to acquisitions
      realized during 2005 (including Euro Mail B.V., Door-to-Door d.o.o., Asinus
      d.o.o. and assets of Rheinkurier GmbH) and realised in 2006 (including
      JD Williams & Company Ltd, Trespertrans S.L. (TG+), Speedage Express
      Cargo Services) was 2.2 %. Changes in foreign exchange rates had a positive
      effect of 0.1%. Total cost of materials increased by €1 million (0.2%)
      in 2006 compared to 2005. Organically, cost of materials increased by €15
      million (3.6%) in 2006, mainly due to higher fuel costs in our express
      division. The net effect of acquisitions and disposals realised during
      2005 and in 2006 was €14 million negative (3.4%). Work contracted out and other external expenses relate to
      fees paid for subcontractors, external temporary staff, rent and leases.
      Total work contracted out and other external expenses increased by €578
      million (16.1%) in 2006 compared to 2005. The net effect of acquisitions
      and disposals realised during 2005 and in 2006 contributed €112 million
      (3.1%) in 2006 to the increase. The organic increase of €473 million
      (13.2%) was mainly related to higher linehaul, pick-up, and delivery costs
      in our express business to service the higher volumes and improve the quality
      of service, inclusive of the higher fuel costs from commercial linehaul
      and subcontractors. It is, furthermore, primarily related to the volume
      growth of European Mail Networks in our mail business. The increase was
      partly offset by adverse changes in foreign exchange rates of €8 million
      (0.2%). Salaries, pensions and social security contributions increased
      by €66 million (2.0%) in 2006 compared to 2005. Acquisitions realised
      during 2005 and in 2006 contributed €67 million (2.0%) to the increase.
      Salaries, pensions and social security contributions increased organically
      by €4 million (0.2%) as a result of organic growth and acquisitions
      realised during 2005 and in 2006, almost offset in full by a reduction
      of average full-time employee equivalents (FTEs) in the mail division in
      connection with our cost flexibility programme. The trend of replacing
      more expensive labour with less expensive labour to reduce operating costs
      in our mail division continued in 2006. This increase was partly offset
      by adverse changes in foreign exchange rates of €5 million (0.2%). Depreciation, amortisation and impairments increased by €15
      million (5.0%) compared to 2005. The organic increase as a results of capital
      investments amounted to €12 million (4.0%). The net effect of acquisitions
      and disposals realised during 2005 and 2006 increased these costs by €3
      million (1.0%). Other operating expenses included items such as marketing
      expenses, restructuring costs, insurance costs and various other operating
      costs. Other operating expenses decreased by €30 million (4.9%) in
      2006 compared to 2005. Other operating expenses decreased organically by €40
      million (6.6%) in 2006, mainly due to lower costs for the rebranding of
      non TNT branded companies into TNT brand compared with 2005, and higher
      costs in 2005 for the self insured part of the damage caused by major fires
      in warehouses in 2005 and employer




liability in the United Kingdom. This decrease in operating
      expenses was partly offset by growth in our European Mail Network business.
      The decrease was partly offset by acquisitions realised during 2005 and
      in 2006, which contributed €10 million (1.6%). 2005/2004Total operating expenses increased by €494 million
      (6.4%) to € 8,219 million in 2005 compared to 2004. Total cost of materials increased by €66 million (19.3%)
      in 2005 compared to 2004, mainly due to higher fuel costs in our express
      division. Work contracted out and other external expenses relate to
      fees paid for subcontractors, external temporary staff, rent and leases.
      Total work contracted out and other external expenses increased by €248million
      (7.4%) compared to 2004. The increase mainly related to growth of European
      Mail Networks in our mail business and higher linehaul, pick up, and delivery
      costs in our express business. Salaries, pensions and social security contributions increased
      by €102 million (3.2%) compared to 2004. This increase was mainly
      due to higher pension costs and an increase in costs as a result of the
      settlement and unwinding of a contract for future wage guarantees in 2004
      in our mail business. In addition, the increase was caused by an increase
      in average FTEs as a result of organic growth in our express business,
      partly offset by lower costs due to a decline in FTEs in our mail business
      in connection with our cost flexibility programme. The trend of replacing
      more expensive labour with less expensive labour to reduce operating costs
      in our mail division continued in 2005. Depreciation, amortisation and impairments increased by € 7
      million (2.4%) compared to 2004. Other operating expenses included items such as marketing
      expenses, restructuring costs, insurance costs, and various other operating
      costs. Other operating expenses increased by €71 million (13.2%) compared
      to 2004. Other operating expenses increased mainly due to increased advertising
      and consultants costs, and costs in connection with our ongoing tax investigations. GROUP OPERATING INCOME2006/2005Total operating income for the group was €1,276 million
    in 2006, an increase of 11.1% compared to 2005. Our express business contributed €580
    million to the total operating income, which is an increase of 21.8% compared
    to 2005. Our express business is further described in chapter 3. Our mail
    business operating income decreased slightly by 1.8% to €761 million
    and is further described in chapter 4.In 2006, non-allocated operating costs amounted to €65
      million (2005: 103). Included in these costs is €27 million (2005:61)
      for business initiatives, of which €25 million (2005: 33) relates
      to the continuing development of our activities in China. As a result of
      maturing operations, more employees were allocated to the respective express
      and mail businesses. As a result, the average number of full-time equivalents
      employed for the development initiatives decreased from 485 at the end
      of 2005


|                                            
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|2006
            ANNUAL REPORT AND FORM 20-F

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|CHAPTER
          2 | | | INFORMATION ON
          THE COMPANY | 26
|------------------- | - | ------------------------------------ | --
|                   



to 201 at year end 2006. The remaining costs for the business
      initiatives decreased from €28 million in 2005 to €2 million
      in 2006. This reduction is a result of lower costs for the rebranding of
      non TNT branded companies into TNT brand and the allocation of costs for
      a procurement initiative and a cost efficiency project for lean warehousing
      to the respective operations. Costs made to support the United Nations
      World Food Programme (WFP) were €8 million in 2006 (2005: 9), including
      costs for knowledge transfer, hands-on support, raising awareness and funds
      for the WFP and cash donations. The other costs were €30 million (2005:
      45), which represent a decrease of €15 million compared to 2005. This
      decrease mainly relates to higher costs in 2005 as a consequence of the
      self insured part of the damage caused by major fires in three different
      warehouses in the United States, Spain and the United Kingdom and employer
      liability in the United Kingdom.Furthermore, the costs for tax investigations decreased
      from €23 million in 2005 to €21 million in 2006. Acquisitions to expand our express and European Mail Networks
      realised during 2005 and in 2006 had an adverse effect of €17 million
      (1.5%) on our operating income in 2006. Foreign currency movements during
      the year had a negative effect of €2 million (0.2 %) on our operating
      income. 2005/2004Total operating income for the group was €1,148 million,
      an increase of 3.4% compared to 2004. Our express business




(excluding freight management) contributed €476 million
      to the total operating income in 2005, which is an increase of 25.9% compared
      to 2004. Our mail business operating income decreased by 3.5% in 2005 to €775
      million. In 2005, non-allocated operating loss amounted to €103
      million. Included in these costs is €61 million for business initiatives,
      of which €33 million was used to further develop our operations in
      China. During 2005 we strengthened our China corporate headoffice and started
      our domestic parcel express business. The remaining €28 million of
      business initiatives was used for several other strategic projects (building
      alliances with other organisations and postal operators, the TNT-1 project,
      re-branding costs of non-TNT branded organisations into the TNT brand and
      a cost efficiency project for lean warehousing). Costs made to support
      the WFP were €9 million; including costs for knowledge transfer, hands-on
      support, raising awareness and funds for the WFP and cash donations. The
      other costs were €45 million, representing an increase of €21
      million compared to 2004. This increase mainly related to costs made for
      tax investigations, which amounted to €23 million compared to €13
      million in 2004 and to costs for the uninsured part of the damage caused
      by major fires in three warehouses, one in the United States, one in Spain,
      and one in the United Kingdom, and employer liability in the United Kingdom.
      These costs were partly offset by the gain on the sale of Global Collect
      B.V. (€12 million).


GROUP FINANCIAL INCOME AND EXPENSES

|                                  |      |   |      |   | Year ended at 31 December |  
|--------------------------------- | ---- | - | ---- | - | ------------------------- | -
|                                  |      |   |      |   |                           |  
|                                  |      |   |      |   |                           |  
|NET FINANCIAL (EXPENSE)/INCOME    | 2006 |   | 2006 |   | variance %                |  
|                                  |      |   |      |   |                           |  
|                                  | US$  |   | €    |   |                           |  
|                                  |      |   |      |   |                           |  
|Interest and similar income       | 263  |   | 199  |   | 70.1                      |  
|                                  |      |   |      |   |                           |  
|Interest and similar expenses     | (325 | ) | (246 | ) | (110.3                    | )
|                                  |      |   |      |   |                           |  
|Net financial expense             | (62  | ) | (47  | ) |                           |  
|                                  |      |   |      |   |                           |  
|(in millions, except percentages) |      |   |      |   |                           |  



2006/2005Interest and similar income: 199 million (2005:
    117)Interest and similar income of €199 million (2005:
      117) mainly relates to interest income on banks, loans and deposits of €109
      million, of which €93 million relates to a gross up of interest on
      cash pools (fully offset by an equal amount in interest expenses), interest
      income on funding our discontinued business (logistics and freight management)
      of €73 million, and hedge income of €15 million relating to outstanding
      hedges. Interest and similar expenses: 246 million (2005: 117)Interest and similar expense in 2006 of €246 million
      mainly relates to interest expense on bank overdrafts and bank loans of €117
      million, of which €93 million relates to a gross up of interest on
      cash pools (fully offset by an equal amount in interest income), interest
      expense on long term borrowings of €52 million, interest on fundings
      owed to discontinued business (logistics and freight management) of €21
      million, hedge costs and fair value adjustments on outstanding hedges of €31
      million and interest expenses on taxes of €21 million. Relating to
      the interest expenses on taxes an amount of €14 million is to be paid
      as at 31 December 2006.




2005/2004Interest and similar income: 117 million (2004:
    100)Interest and similar income in 2005 of €117 million
      (2004: 100) mainly relates to interest income on funding our discontinued
      logistics business of €74 million (2004: 67) and the interest of €21
      million relating to an income tax refund. The interest income in 2004 also
      relates to a one-off gain of €11 million on the unwinding of a USD
      435 million swap. Interest and similar expenses: 117 million (2004: 116)In 2005 interest and similar expense of €117 million
      mainly relates to interest expense on funding from our discontinued logistics
      business of €21 million (2004: 18), interest expense on long term
      borrowings of €54 million (2004: 61), and expenses on our outstanding
      hedge transactions of €23 million (2004: 9).




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|27 | INFORMATION
            ON THE COMPANY | | | CHAPTER
        2
|-- | -------------------------------------- | - | -----------------
|  

GROUP INCOME TAXES

|                                  | Year ended at 31 December |  
|--------------------------------- | ------------------------- | -
|                                  |                           |  
|                                  |                           |  
|INCOME TAXES                      | 2006                      |  
|                                  |                           |  
|                                  | US$                       |  
|                                  |                           |  
|Current tax expense               | 522                       |  
|                                  |                           |  
|Changes in deferred taxes         | (1                        | )
|                                  |                           |  
|Total income taxes                | 521                       |  
|                                  |                           |  
|(in millions, except percentages) |                           |  

2006/2005Group income taxes amounted to €395 million in 2006,
      an increase of 5.1% compared to 2005.Income taxes differ from the amount calculated by multiplying
      the Dutch statutory corporate income tax rate with the income before income
      taxes. In 2006, the effective income tax rate was 32.3% (2005: 32.8%),
      which is higher than the statutory corporate income tax rate of 29.6% in
      the Netherlands (2005: 31.5%). This difference is caused by several opposite
      effects. For further details we refer to note 23 of our financial statements. The total accumulated losses available for carry forward
      at 31 December 2006 amounted to €689 million (2005: 639). With these
      losses carried forward, future tax benefits of €221 million could
      be recognised (2005: 203). Tax deductible losses give rise to deferred
      tax assets at the statutory rate in the relevant country. Deferred tax
      assets are recognised if it is probable that they will be realised. The
      probability of the realisation is impacted by uncertainties regarding the
      utilisation of such benefits, for example as a result of the expiry of
      tax losses carried forward and projected future income. As a result we
      have not recognised €158 million (2005: 133) of the potential future
      tax benefits and have recorded net deferred tax assets of €63 million
      at the end of 2006 (2005: 70). 2005/2004Group income taxes amounted to €376 million in 2005,
      an increase of 1.1% compared to 2004. Our effective tax rate for 2005 was
      32.8% compared to 34.1% for 2004. The effective tax rate was positively
      influenced by the decrease in statutory income tax rate in the Netherlands
      from 34.5% in 2004 to 31.5% in 2005. The total accumulated losses that were available to carry
      forward at 31 December 2005 amounted to €639 million (2004: 602).
      With these losses carried forward, future tax benefits of €203 million
      (2004: 194) could be recognised. Tax deductible losses give rise to deferred
      tax assets at the statutory rate in the relevant country. We recognise
      deferred tax assets if it is probable that they will be realised. The probability
      of the realisation is impacted by uncertainties regarding the utilisation
      of such benefits, for example as a result of the expiry of tax losses carried
      forward and projected future income. As a result we have not recognised €133
      million (2004: 116) of the potential future tax benefits and have recorded
      net deferred tax assets of €70 million at the end of 2005 (2004: 78).




DISCONTINUED OPERATIONSIn 2006, the loss from discontinued operations was €157
      million and related to the discontinued logistics and freight management
      businesses. The loss from discontinued operations relates to both the result
      for the period and the post-tax result on the actual disposal of the asset
      held for sale. In 2006 the discontinued logistics operations resulted in
      an operating income of €43 million. Included in this income is a €35
      million loss in respect of a provision for onerous contracts. In the first
      quarter of 2006, the remainder of our French operations was sold to the
      French cargo transport operator Malherbe and Pierre-Michel Mendy/Groupe
      Lapegue, resulting in a total loss of €26 million recorded in Other
      income.The loss in 2006 of €45 million on Result from
      investments in associates relates mainly to a €43 million asset
      impairment in respect of TNTs 20% equity interest in Global Automotive
      Logistics SAS.The post-tax transaction loss on disposal assets held for
      sale of the logistics business amounts to €87 million and includes
      various deal related expenses and the portion of our cumulative translation
      adjustment that relates to our discontinued logistics business resulting
      in a charge of €12 million. In 2005, the loss from discontinued operations was €109
      million. Included in this loss was the pre-tax result of the sale transaction
      of the French logistics activities amounting to €102 million. Other
      losses relating to our logistics operations in France, including restructuring
      expenses, amounted to €52 million. The operating income for the remainder
      of our discontinued business amounted to €148 million, offset by €69
      million of net financial expense and €34 million of income tax expense. The discontinued operations are further described in chapter
      5.




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          2 | | | INFORMATION ON
          THE COMPANY | 28
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GROUP NET INCOME2006/2005In 2006, profit for the year attributable to equity holders
    of the parent was €670 million, an increase of €11 million (1.7%)
    compared to 2005. This increase was mainly the result of an increase in operating
    income of €128 million, driven by our express business and lower non-allocated
    costs. The increase in profit for the year attributable to the equity holders
    of the parent was for the most part offset by €19 million higher income
    taxes, €47 million higher net financial expense, an increase in loss
    from discontinued operations of €48 million and an increase in loss from
    investments from associates of €4 million. 2005/2004In 2005, profit for the year attributable to the equity
      holders of the parent was €659 million, a decrease of €93 million
      (12.4%) compared to 2004. This decrease was mainly the result of an increase
      in loss from discontinued operations of €141 million and €4 million
      higher income taxes. The decrease in profit for the year attributable to
      the equity holders of the parent was partly offset by an increase in operating
      income of €38 million, mainly driven by our express business, and
      a reduction of net financial expenses of €16 million.




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| | THE
        EXPRESS DIVISION | | | CHAPTER
        3
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|

| | The times
        I am happiest 
        within TNT are those 
        when my customers are 
        happy.
|- | -------------------------------------------------------------------------------------------------------------
| 
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      EXPRESS DIVISION | 
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| | TNT
      EXPRESS SOUTH AFRICA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
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| | If ever
      there was someone who loves life its Musa. Enjoyment and frenetic
      energy seem to ooze from his pores. He clearly has trouble sitting still.
      All to the benefit of TNT as it is said he has orange blood. Hugely dedicated
      to his job, he lives and breathes the company and has helped change and
      motivate the Customer Service Department and organisation as a whole. Its
      no surprise therefore that the praise from his colleagues and customers
      is frequent and that he has won various company awards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | Im a frontline
        customer service supervisor in theJohannesburg
        call centre, responsible for incoming calls from major accounts. Second,
        Im responsible for monitoring the accessibility of my team for our
        clients, with a target of 90% calls answered in 10 seconds. The thing
        about my job is that the customer comes first. Always. Its important
        for the company that our clients are happy and come with return jobs.
        And its important for me and my team  with no custom, none
        of us have a job!
      Without my
        people, none of what we are achieving in South Africa would be possible.
        Its a matter of teamwork, and everyone has to be accountable for
        their own job. People have to feel the responsibility. It has to be part
        of who they are. And theres no hiding with me. Maintaining a good
        atmosphere is critical. Thats why I like to know my people on a
        personal level, as individuals. Its easier if they open up so that
        you can help them solve whatever theyre struggling with at the time.
        But if youre going to get a good response from your colleagues,
        you have to lead by example. Less talk, more action. |  | Those awards?
        I have to tell you  of course I was delighted to receive them, but
        I didnt really understand it. I was just doing my job. Sure, I sometimes
        head off after work to deliver packages, and maybe it gets late if its
        on the other side of the city. But thats no sweat. I love my job,
        I love it when my clients are happy and hey, I like driving. This way,
        when I then get back home, I can sleep well, and so can my customer. And
        I also know that we can start with a clean sheet the next day. Express
        means on time. If we dont meet our promises, we might as well pack
        up shop right now.
      MUSA MIYENTNT Express South Africa
        - Front line customer service supervisor 
        32 years old, single, 1 child | 
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|BUSINESS DESCRIPTION
      Our express division provides on-demand door-to-door
          express delivery services for customers sending documents, parcels
          and freight. We offer regional, national and worldwide express delivery
          services, mainly for business-to-business customers. The express services
          we provide and the prices we charge to customers are primarily classified
          by transit times, distances to be covered and sizes and weights of
          consignments. We offer a comprehensive range of products to our customers
          that we divide into small and medium enterprises, major account and
    global customers with each of these being |  | managed by dedicated teams and processes.
          We build strong relationships with our customers through regular personal
          calls and visits, as well as a wide range of communications media.
      FACILITIESOur express division uses 1,231 of TNTs
        total of 1,707 buildings as depots, road and air hubs. We believe that
        these buildings are significantly utilized and provide sufficient capacity
        for 2007s business forecast. No material portion of our properties
        is subject to any encumbrances.
      The principal express facilities are as follows:
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|                       
|-----------------------
|Location               
|                       
|Liège, Belgium         
|                       
|Wiesbaden, Germany     
|                       
|Arnhem, the Netherlands
|                       
|Brussels, Belgium      
|                       
|

The following aircraft are in use:

|                               |       |  |        |  |           |  |       |  |                        | 
|------------------------------ | ----- |  | ------ |  | --------- |  | ----- |  | ---------------------- | 
|Type                           | Owned |  | Leased |  | Chartered |  | Total |  | Net kilos per aircraft | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Boeing 747-400ERF              |       |  | 1      |  |           |  | 1     |  | 111,900                | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Airbus A300-200F               | 5     |  |        |  |           |  | 5     |  | 37,400                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Airbus A300-100F               | 1     |  | 1      |  |           |  | 2     |  | 37,400                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Boeing B757-200PCF             |       |  | 3      |  |           |  | 3     |  | 26,100                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Tupolev Tu204-120C             |       |  |        |  | 1         |  | 1     |  | 22,200                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Boeing B737-300SF              |       |  | 7      |  |           |  | 7     |  | 14,600                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Boeing B737-300QC              |       |  | 2      |  | 1         |  | 3     |  | 12,300                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Lockheed Electra L188A         |       |  | 1      |  |           |  | 1     |  | 11,300                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|British Aerospace BAe146-300QT | 8     |  |        |  |           |  | 8     |  | 10,600                 | 
|                               |       |  |        |  |           |  |       |  |                        | 
|British Aerospace BAe146-200QT | 11    |  |        |  |           |  | 11    |  | 9,500                  | 
|                               |       |  |        |  |           |  |       |  |                        | 
|British Aerospace BAe146-200QC | 2     |  |        |  |           |  | 2     |  | 8,700                  | 
|                               |       |  |        |  |           |  |       |  |                        | 
|Total                          | 27    |  | 15     |  | 2         |  | 44    |  |                        | 
|                               |       |  |        |  |           |  |       |  |                        | 
|

STRATEGY

Our ambition is to be the leader in day certain and time certain
  door-to-door transport for our business-to-business clients with the widest
  geographical coverage. We are a global express player. Our strategic intent is to: 
    be number one in Europe in national, intra-European
      and Asia-Europe express flows,
    build volumes from China to fuel our European network and
      establish an intra-China network,
    be number one in selected emerging markets
      like India, Brazil and China , and
    be number one in special services: a range
      of flexible and value added solutions that are complimentary to the network
      services. These services are tailored to the customers requirements
      and range from time critical and




freight transportation through to special handling and
        distribution services. To achieve these goals, our objectives are to: 
    achieve profitable revenue growth through volume acquisitions
      at the optimal price,
    maintain a balanced customer portfolio (large, medium,
      small and adhoc customers),
    focus on product performance,
    improve cost effectiveness,
    ensure quality in all key areas,
    provide high-quality and cost-effective intra-European
      services through connecting our strong domestic businesses,
    secure outstanding levels of customer satisfaction,
    develop leading-edge support technologies that provide
      added-value for customers,




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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | strengthen the TNT brand and increase top-of-mind
      awareness of the comprehensive range of reliable on-demand express delivery
      services provided by the company, and |  | express parcels operators. Fast-growing German B2C carrier
        Hermes continued to win domestic market share from DHL and launched a
        European parcel distribution service in cooperation with various carriers,
        including TNT and DPD, a subsidiary of La Poste.
      AsiaEconomic conditions continued to be favourable
        in 2006 thanks to strong Chinese economic growth, which helped to boost
        export expansion. There was continued strong investment in the region,
        through acquisitions, expanded infrastructure and enhanced services. China
        is still driving the regions growth but the large Japanese market grew
        moderately and other markets such as South Korea, Vietnam and the rest
        of South-East Asia continued to attract investment.
      Alliances and joint ventures also had a significant role
        to play in Asia. DHLs partnering with Transmile and its acquiring
        of an equity stake in Polar Air Cargo are key examples. The big Japanese
        players continued to try to internationalise their business to reduce
        their dependence on the domestic market. Japan Post launched its international
        expansion through ANA & JP Express (AJV). Parcels market leader Yamato
        Transport ended its long-running partnership with UPS and launched its
        own international parcel service.
      ChinaThe major carriers have continued to execute
        their long term investment strategies and expanded their product offerings
        with increasing focus on the domestic market as well as maintained interest
        in international connections. DHL Express unveiled a new China expansion
        strategy to mark this years 20th anniversary of its express joint
        venture with Sinotrans. FedEx announced the acquisition of the domestic
        and international express businesses of its Chinese partner, the DTW Group.
        This will increase FedEx presence to 89 locations and increase its
        penetration of the domestic market. FedEx also increased weekly China
        flights to 26. UPS increased China flights to 21, including nine weekly
        Shanghai-USA flights and five weekly Shanghai-Cologne flights.
      IndiaThe express sector benefited from Indias
        further integration into the global economy. It also emerged as a competitive
        express market with major expansions and strategic acquisitions being
        the key trends. DHL Express opened several new facilities, while its subsidiary
        Blue Dart Express, the domestic air express market leader, invested in
        new facilities and services, and expanded its network and capacity by
        introducing two Boeing 757 freighters that enabled it to offer 21 new
        routes. FedEx announced the takeover of its Indian service partner, Prakash
        Air Freight, and it will be able to offer a portfolio of international
        and domestic express services.
      Middle EastIn the Middle East, independent carrier Aramex
        disclosed its ambition to grow into the worlds fifth-largest express
        operator through selective acquisitions and by expanding its partner network.
      AmericasThe mature US market grew moderately during
        2006 with the two dominant players, UPS and FedEx, continuing to perform
        strongly. DHL was largely focused on cutting its losses, but also
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      standard of customer care.                                                                                 
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                
|BUSINESS CONTEXT
      We believe that the following are the main competitor
        and market trends affecting the express division.
      EuropeIn the pan-European segment of the market, our
        competition comes from global providers with international networks. Parcel
        alliances and public postal operators are trying to penetrate the pan-European
        market by buying into parcel and express companies to create international
        air and road express networks. Trends in the industry indicate that express
        companies are seeking to extend their services further into the conventional
        freight markets in an effort to exploit the capacity of their networks.
        For these reasons, it is likely that the major express operators will
        increasingly look for opportunities in liberalised post markets and in
        the wider freight markets.
      We expect that the overall international market will grow
        at a faster rate than European domestic markets. The market in Europe
        has undergone a period of intense consolidation in recent years and now
        has four other major players: Deutsche Post (DHL), FedEx Corp. (FedEx),
        Geopost-Groupe (La Poste) and United Parcel Service Inc. (UPS). However,
        the market is still much more fragmented than that of the United States,
        and there are still several large operators in certain European regions.
      Competition in the fragmented European express market
        intensified further in 2006 and there were signs of further market consolidation.
        The overall European express market experienced moderate growth in 2006.
        International growth was higher than domestic growth with higher growth
        achieved in Eastern Europe. In the mature Western European markets, the
        focus has been on improving efficiency, improving customer service, and
        the strategic filling of geographic areas where the company is under-represented,
        through acquisitions and targeted network expansions. Parcel operators
        have been edging into the express market, and initiatives such as expansion
        of parcel shops, drop points and parcel stations have illustrated the
        perceived increased importance of the business-to-consumer (B2C) and consumer-to-consumer
        markets.
      There was a clear trend in alliances between established
        domestic service providers and international integrators. UPSs alliance
        with Poste Italiane, TNTs agreement with GeoPost and FedExs
        agreement with Geodis reinforce this movement. There was further market
        consolidation with several important acquisitions during the year. CityLink
        agreed to buy rival Target Express in the UK, positioning it as a stronger
        competitor to the market leaders in the still-fragmented British domestic
        market. FedEx also targeted the UK domestic market by acquiring independent
        carrier ANC. In France, financial investor Butler Capital Partners bought
        a majority (51.8%) stake in express parcels operator Sernam, one of the
        countrys largest

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|rolled out several new services and continued to invest
        in its domestic infrastructure. Latin America, Mexico and Brazil appear
        to have developed most positively during 2006. In particular, DHL invested
        in new air services and improved facilities in Mexico in 2006. It also
        introduced new domestic products in Argentina and Colombia.
      BUSINESS PERFORMANCE
      In 2006 our express business produced a strong performance
          driven by our international businesses, supported by a more balanced
          customer portfolio, growth in our global accounts, improved network
          optimisation and careful cost management. Our employees furthered our
          mission through strict adherence to our commercial policy, a focus
          on serving business-to-business customers and consistent company-wide
          deployment of our uniform best practices. These strong results are
          a continuation of previous years results, which have seen solid
          high single digit revenue growth and continuous improvement in operating
          margin.
      Technology continues to be essential in achieving our
          business strategy. We continue to standardise our processes throughout
          our global organisation, and this standardisation is being supported
          by the development and implementation of common processes on a standard
          IT platform. We plan for our common sales and customer service systems
          to support a single face to the customer through harmonisation
          of our international and domestic processes. We continue to develop
          a common back office system using the integrated solutions of SAP and
          have implemented the system in a total of 52 countries, representing
          86% of our revenue. This includes the major business units of Benelux,
          France, Italy, Australia and the United Kingdom.
      In 2006 we continued to exploit the comprehensive range
          of cross-functional data available in our data warehouse to provide
          consistent and timely management reporting and analysis of our key
          performance indicators. This has enabled more frequent analysis of
          our operational service performance, along with in-depth measurement
          of our customer services, administration and network processes which
          facilitates continuous improvement and adoption of best practice in
          our business.
      A focus in 2006 was to maintain high quality technology
          for use by our customers. As a result, there has been a steady increase
          in the penetration of our customer interface technology products. The
          speed of use and simplification of the customers business process
          provided by our applications has been reflected in consistently high
          scores for customer technology in our regular customer loyalty surveys.
      The express division is seasonal in that it is affected
          by public and local holiday patterns. The third quarter is traditionally
          our weakest quarter due to the summer holiday season in Europe.
      Express EuropeThe Express Europe business provides regional, national
          and pan-European express services that deliver consignments from Europe
          to the rest of the world as well as time-sensitive door-to-door products.
    Our extensive integrated road and air |  | networks have given us a leading position
          in the European market and are an important strategic asset with dense
          coverage in 34 European countries. We expanded our European network
          in 2006 and continued to introduce uniform best practice approaches
          throughout the organisation.
      In Europe, we provide on-demand expedited door-to-door
          delivery services that involve carrying documents, parcels and freight
          for our European customers. The shipments are collected by a fleet
          of vehicles that make either scheduled stops or on-demand collections
          upon receipt of customer telephone or internet requests. Shipment and
          consignment details are sent to the nearest depot in our network. Details
          of each shipment are entered into our track-and-trace systems either
          through scanning, data entry or electronic data interchange methods.
          The customer can access the information through internet or proprietary
          customer interface technology. Each shipment is then sorted by destination
          and consolidated with other customers consignments. Depending
          on its destination, each shipment is transported on a linehaul (air
          or road transport between TNT depots/hubs) to a domestic road hub,
          an international road hub or one of the airports from which we operate,
          generally within two hours of arrival at the depot.
      We transport intra-European shipments from the collecting
          depot by road or on one of the aircraft owned or leased by us from
          an origin airport to our main air express sorting hub in Liège
          (Belgium). Where transit times allow, shipments that do not travel
          by air are carried by truck to one of our 10 main European road hubs.
          We unload and sort the shipments and consolidate them with other consignments
          for each destination and then put them on outbound linehauls for movement
          to the delivery depot. We move domestic consignments within major European
          countries from the collection to the delivery depot, either directly
          or via a domestic hub.
      At the delivery depot we sort the shipments and load
          them on the appropriate delivery vehicle. Proof of delivery is entered
          into the Global Link system or other computer system that is updated
          at every point in the process. This enables us to notify the customer
          when the consignee has received the shipment. Our track-and-trace systems,
          including the Global Link system, enable us to offer an automated proof-of-delivery
          service, and customers can access the information through internet
          or proprietary customer interface technology.
      Our sales channels consist of field sales, major accounts,
          global accounts and postal alliances. The majority of our sales force
          is in field sales, which are split into territories with a team of
          two sales people per territory. Major accounts focus on national major
          accounts and our global account managers maintain a portfolio of our
          largest multinational accounts. We also enter into alliances with major
          postal operators who offer our services to their customers.
      We have a more extensive express delivery road network
          in Europe than any of our competitors. We continue to enhance our European
          air and road networks to be able to offer the most reliable service
          to our customers. Through these integrated road and air networks we
          are able to offer a range of fast and reliable express delivery services
          in most European countries. With respect to our European network, we
          added our own airport connections to Brno (the Czech Republic) and
    Vigo (Spain) in March and September 2006, respectively, and
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|added St Petersburg, Ljubljana and Zagreb as new co-load
          airport connections. We further expanded our already dense network
          coverage by introducing a road connection to Morocco between Madrid
          and Casablanca. TNT is the first major express company to create an
          owned time definite road linehaul connection between Africa and Europe,
          and this complements the focus on further strengthening our networks
          by expanding into the emerging markets within and around Europe.
      Following our announcement in 2004 of our plan to introduce
          a further five Boeing 737-300 aircraft to our European air network,
          we introduced two aircraft in each of 2004 and 2005 and one in 2006.
          The five aircraft, leased for five years from GE Capital Aviation Services,
          replaced chartered aircraft operating in our express air network. We
          also entered other agreements in June 2005 and December 2005 with GE
          Capital Aviation Services for four additional leased Boeing 737s. We
          introduced one of these aircraft in 2006 and will introduce the remaining
          three in 2007.
      In 2004, we announced a €36 million investment plan
        for our Liège air hub, which is intended to improve transit times
        and increase the percentage of consignments delivered on time and in perfect
        condition. We originally planned for the hub extension to be completed
        at the end of 2005, but as a result of the modifications made to the existing
        hub in 2005 the available capacity was increased. That increase has allowed
        us to delay the implementation of the next stage. The project is progressing
        well with a total spend as at 31 December 2006 of€17
        million, mainly attributed to capacity-increasing modifications inside
        the existing hub to guarantee service during construction of the new facility.
        Meanwhile, the preliminary work for this new facility is ongoing to allow
        for construction of the new extension to the hub building in 2007.
      In 2006, we completed the investment in the Duiven (the
          Netherlands) road hub, on which we spent €11 million. This investment
          has increased hub sorting space by 3,500 square metres, doubled the
          sorting capacity, improved facilities for staff and improved security.
      In January 2006, we completed the acquisition of TG+,
        which is the third largest industrial domestic parcel operator in Spain,
        and which has revenues of around €100 million. The integration of
        TG+ is progressing well and a number of projects are on-going including
        a focus on quality of service, improving sales efficiency, and reorganising
        the third party network.
      Express Rest of the WorldThe
          Express Rest of the World business provides door-to-door express delivery
          of documents, parcels and freight worldwide in all
          areas outside Europe and from these areas to Europe. Our worldwide
          coverage extends to more than 200 countries. We are also building our
          position in Asia and have further improved service levels between Asia
          and Europe. In China, we have built an extensive network consisting
          of 25 company-owned locations and 50 agency franchises to serve over
          600 cities. On 29 September 2006 we signed an equity transfer agreement
          (comparable with a Share Purchase Agreement) with the Hoau Group of
          China to acquire its nationwide road transport and freight business.
          Completion of the transaction is expected in early 2007, subject to
          approval of the government of the Peoples Republic of China.
    This will |  | bring TNT closer to realising its ambition
          of becoming Chinas largest road network operator offering comprehensive
          road coverage in 1,100 locations in China.
      We have announced plans to increase our linehaul capacity
        between China and Europe through the addition of two Boeing 747-400ERF
        aircraft. The first aircraft was delivered in December 2006 and the second
        is scheduled for delivery in the second quarter of 2007.
Express Rest of the World operates in a similar way to
          that of our Express Europe business line, but relies primarily on airlift
          by commercial passenger airlines for linehaul transportation links.
          However, in many of these countries our global express services are
          augmented by domestic and regional express delivery services.
      The emerging express markets of Asia have offered significant
          opportunities in 2006 with double digit growth. The continued growth
          and expansion of our regional road networks in the Middle East and
          South East Asia are creating a clear competitive advantage and differentiation
          in these markets. In 2006, we have built a dedicated facility for Life
          Sciences in Singapore and this contributes to our leading position
          in this sector for the region.
      On 1 September 2006 we completed the acquisition of ARC
          India Limited, which operates under the trade name Speedage. Speedage
          had revenues of approximately €17 million in 2006 and employs
          approximately 1,200 people in 540 locations. Acquiring Speedage is
          in line with TNTs strategic objective to become the leading provider
          of express deliveries in the emerging markets in Asia, specifically
          India. We believe that combining Speedages strong domestic road
          network with TNTs international and domestic networks will form
          a powerful platform for further expansion in the fast growing Indian
          express market.
      This acquisition follows the launch of our domestic services
          in India on 1 February 2006, which made TNT the first multinational
          brand in India to offer international and domestic services using an
          integrated air and road network. In 2006 TNT continued to expand and
          now operates out of 614 locations in India. In line with the group
          strategy of being the leader in emerging markets, TNT aims to be the
          leading integrated player in the Indian market.
      Australia performed well across all key areas of its operations
        in 2006. There was strong revenue growth in almost all products, with
        a combination of targeted new account acquisition, judicious pricing actions,
        and the successful re-negotiation and/or retention of virtually all expiring
        major customer contracts. Stable industrial relations and higher staff
        engagement and retention served as a platform, along with the improved
        revenues and tight cost control, for achieving stronger profitability.
        Infrastructure improvements continued through a vehicle fleet upgrade
        programme and several depot re-developments.
      In North America, we carry international express shipments
          primarily to and from the Northeast and West Coast regions. Building
          on our own delivery network in the Northeast business corridor, we
          continue to improve next-day delivery services to nine major business
    centres, including New York, Washington D.C., Chicago and Toronto.
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|In South America, we have established a market leadership
          position through the acquisition of Expresso Mercurio S.A. (Mercurio)
          on 10 January 2007. TNT is now the largest privately held domestic
          express provider in the continents largest market. The acquisition
          is in line with our strategic objective to become number one in selected
          emerging markets and provides the platform to develop an integrated
          South American road express network. Mercurio had revenues of around €190
          million in 2006, employs over 6,000 people across 110 locations and
          offers a comprehensive nationwide express service in Brazil. This complements
          TNTs well-established international express business in the country.
      FINANCIAL RESULTS
      In 2006, our express division earned revenues of €6,011
          million. The express division accounted for 59.8% of our group operating
          revenues and 45.5% of our group operating income.
      The following tables set out the financial performance
        of our express division for the past three years: |  | The express industry benefited generally from
        an improving international economic climate and continued good growth
        in international trade during 2006. In the express industry we see that
        the majority of flows of documents and parcels remain within continental
        boundaries. Thus, our strategy is to build operational excellence within
        regions, particularly within Europe and Asia. As we expand our position
        in Asia we intend to also build leading connectivity between Europe and
    Asia.
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|                                                                                                         | Year ended at 31 December |  
|-------------------------------------------------------------------------------------------------------- | ------------------------- | -
|                                                                                                         |                           |  
|EXPRESS FINANCIAL OVERVIEW                                                                               | 2006                      |  
|                                                                                                         |                           |  
|                                                                                                         | US$                       |  
|                                                                                                         |                           |  
|Total operating revenues                                                                                 | 7,933                     |  
|                                                                                                         |                           |  
|as % of total operating
      revenues TNT                                                               |                           |  
|                                                                                                         |                           |  
|Other income                                                                                             | 8                         |  
|                                                                                                         |                           |  
|Total operating expenses                                                                                 | (7,176                    | )
|                                                                                                         |                           |  
|Total operating income                                                                                   | 765                       |  
|                                                                                                         |                           |  
|as % of express operating
      revenues                                                                 |                           |  
|                                                                                                         |                           |  
|(in millions, except percentages)                                                                        |                           |  
|1   Figures have been adjusted
      to reflect the transfer of Cendris UK from mail to express in 2006. |                          



|                                                                                                         | Year ended at 31 December | 
|-------------------------------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                                         |                           | 
|EXPRESS OPERATING REVENUES                                                                               | 2006                      | 
|                                                                                                         |                           | 
|                                                                                                         | US$                       | 
|                                                                                                         |                           | 
|Express Europe                                                                                           | 6,473                     | 
|                                                                                                         |                           | 
|Express Rest of the World                                                                                | 1,460                     | 
|                                                                                                         |                           | 
|Total operating revenues                                                                                 | 7,933                     | 
|                                                                                                         |                           | 
|as % of total operating revenues TNT                                                                     |                           | 
|                                                                                                         |                           | 
|(in millions, except percentages)                                                                        |                           | 
|1   Figures have been adjusted
      to reflect the transfer of Cendris UK from mail to express in 2006. |                          



|                                                                                                         | Year ended at 31 December | 
|-------------------------------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                                         |                           | 
|EXPRESS OPERATING EXPENSES                                                                               | 2006                      | 
|                                                                                                         |                           | 
|                                                                                                         | US$                       | 
|                                                                                                         |                           | 
|Cost of materials                                                                                        | 322                       | 
|                                                                                                         |                           | 
|Work contracted out and other external expenses                                                          | 3,918                     | 
|                                                                                                         |                           | 
|Salaries, pensions and social security contributions                                                     | 2,325                     | 
|                                                                                                         |                           | 
|Depreciation, amortisation and impairments                                                               | 232                       | 
|                                                                                                         |                           | 
|Other operating expenses                                                                                 | 379                       | 
|                                                                                                         |                           | 
|Total operating expenses                                                                                 | 7,176                     | 
|                                                                                                         |                           | 
|(in millions, except percentages)                                                                        |                           | 
|1   Figures have been adjusted
      to reflect the transfer of Cendris UK from mail to express in 2006. |                          

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|35 | THE EXPRESS DIVISION | | | CHAPTER
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|                                                                                                                                          | Year ended at 31 December | 
|----------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                                                                          |                           | 
|EXPRESS OPERATING STATISTICS 1                                                                                                            | 2006                      | 
|                                                                                                                                          |                           | 
|Number of consignments (in thousands)                                                                                                     | 217,335                   | 
|                                                                                                                                          |                           | 
|Number of tons carried                                                                                                                    | 4,702,997                 | 
|                                                                                                                                          |                           | 
|Average of number of working days                                                                                                         | 251                       | 
|                                                                                                                                          |                           | 
|Number of depots/hubs                                                                                                                     | 1,231                     | 
|                                                                                                                                          |                           | 
|Number of vehicles 2                                                                                                                      | 23,462                    | 
|                                                                                                                                          |                           | 
|Number of aircraft 2                                                                                                                      | 44                        | 
|                                                                                                                                          |                           | 
|1   The comparative numbers have
      been adjusted to reflect the transfer of innight services from logistics
      to express in 2005. |                          
|2   A substantial number of the
      vehicles and aircraft are not owned by us but leased or subcontracted.                              |                          

|During 2006, our express division realised higher operating
          revenues and improved earnings as a percentage of operating revenues
          due to a strong performance in our international business attributable
          to our attractive product offering, disciplined pricing and an efficient
          sales process.
      We continued to grow our profit margin, which was achieved
          through the implementation of standard commercial policies, cost control,
          including increased network utilisation, while maintaining service
          levels and the ongoing review of our revenue quality yield against
          cost inflation.
      Some of the other key performance indicators used to
          monitor our express division include on-time delivery, customer satisfaction
          and employee satisfaction.
      EXPRESS OPERATING REVENUES2006/2005Total operating
          revenues of our express business for 2006 increased by €648 million (12.1%) compared to 2005. The organic
          growth in operating revenues of our business was €550 million
          (10.3%), which is the highest growth since 2000. This growth was particularly
          helped by a strong performance in the third quarter of 2006. The acquisitions
          of TG+ in Spain, Speedage in India and TNT In-night Czech Republic
          in 2006 and Slovakia Door-to-Door d.o.o. and Asinus d.o.o. in Slovenia
          during 2005 had a positive effect of €115 million (2.1%) on operating
          revenues. Foreign exchange effects had a negative effect of €17
          million (0.3%), mainly due to the strengthening of the Euro against
          many currencies and in particular the Australian dollar, Turkish Lira,
      Hungarian Forint, Japanese Yen, Indian Rupee and South African Rand.
      The increase in operating revenues was primarily due
          to strong growth in European air and road volumes. The growth in these
          international (i.e. cross border) flows continued to exceed the growth
          in domestic flows. All customer segments saw revenue increases, although
          the biggest were amongst the global accounts. The its our
          business to deliver yours international campaign was launched
          in Express to expand TNT brand awareness in all customer categories
          but with emphasis on small and medium sized customers.
      Express Europe operating revenues for 2006 increased
          by €527 million (12%) compared to 2005. The organic
          growth in operating revenues was €423 million (9.7%). Most business
          units contributed to the increase in operating revenues. In particular,
          Germany, Benelux, Italy, Spain, Turkey and the Scandinavian and Eastern
    European countries contributed to |  | the majority of the growth in operating
          revenues. The acquisition of TG+ in Spain, TNT In-night Czech Republic
          in 2006 and Slovakia Door-to-Door d.o.o. and Asinus d.o.o. in Slovenia
          during 2005 had a positive effect on operating revenues of €107
          million (2.4%) and foreign exchange fluctuations had a negative effect
          of €3 million (0.1%).
      Express Rest of the World operating revenues for 2006
          increased by €121 million (12.3%) compared to 2005. This was achieved
          through the €127 million (12.9%) organic growth in operating revenues
          from operations, primarily in Middle East, China and South East Asia,
          and from acquisition effects of €8 million (0.8%) from the purchase
          of Speedage in India. Foreign exchange fluctuations had a negative
          effect of €14 million (1.4%), mainly due to the strengthening
          of the euro against the Australian dollar, Brazilian real, Korean won,
          Chinese renminbi and Taiwan dollar.
      2005/2004Operating revenues
          of our express business for 2005 increased by €400 million (8.1%) compared to 2004. The organic growth in
          operating revenues of our business was €365 million (7.4%). The
          2005 acquisition of Door-to-Door d.o.o. and Asinus d.o.o. in Slovenia
          had a positive effect of €7 million (0.1%) on operating revenues
          and foreign exchange effects had a positive effect of €28 million
          (0.6%), mainly due to the strengthening of the Australian dollar, Polish
      zloty, Brazilian real and various Asian currencies against the euro.
      The increase in operating revenues was primarily due
          to strong growth in European air and road volumes, as well as an increase
          in European revenue quality yield of 4.0%.
      Express Europe operating revenues for 2005 increased
          by €297 million (7.3%) compared to 2004. The organic growth in
          operating revenues was €289 million (7.1%). Most business units
          contributed to the increase in operating revenues despite the mixed
          economic conditions. In particular, Germany, Benelux, Italy, Spain,
          Turkey and the Scandinavian and Eastern European countries contributed
          to the majority of the growth in operating revenues. The 2005 acquisition
          of Door-to-Door d.o.o. and Asinus d.o.o. in Slovenia had a positive
          effect on operating revenues of €7 million (0.2%) and foreign
          exchange fluctuations had a positive effect of €1 million.
      Express Rest of the World operating revenues for 2005
          increased by €103 million (11.7%) compared to 2004. This was achieved
          through €76 million (8.6%) organic growth in operating revenues
          from operations, primarily in China, Taiwan and the Middle East, and
    positive foreign exchange effects of
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|€27 million (3.1%), mainly due to the strengthening
          of the Australian dollar, Brazilian real, Korean won, Chinese renminbi
          and Taiwan dollar against the euro.
      EXPRESS OPERATING EXPENSES2006/2005Operating expenses
          of our express business for 2006 increased by €550 million (11.3%) compared to 2005. The organic increase
          in operating expenses was €439 million (9%), while the effect
          of acquisitions increased operating expenses by €126 million (2.6%).
          Foreign exchange fluctuations decreased operating expenses by €15
          million (0.3%). The organic increase was driven mainly by the strong
          international volume growth, the expansion of our business in China,
          Eastern Europe and India and the high costs of fuel for our aircraft,
          linehaul and pick-up and delivery vehicles. Cost of materials increased
      by€25 million (11.4%) primarily due to the higher
          fuel costs incurred in all business units. Work contracted out and
          other external expenses increased by €411 million (16.1%). This
          included the cost of linehaul and pick-up and delivery, which have
          increased to service the higher volumes and to improve the service
          quality and also included the higher fuel costs from commercial linehaul
          and subcontractors. Salaries and social security contributions increased
          by €103 million (6.2%) due to the additional number of FTEs,
          including the acquisitions of TG+, Speedage, TNT In-night Czech Republic
          and Slovakia Door-to-Door d.o.o. and Asinus d.o.o. in Slovenia and
          growth and expansion of our activities in India, China and South East
          Asia as well as salary increases for existing employees, and severance
          and redundancy payments. Depreciation, amortisation and impairments
          increased by €6 million (3.5%) due to the amortisation of intangibles
          for the acquisitions as well as the expansions to our European air
          and road network hubs and the development of the SAP back office system.
          Other operating expenses increased by €5 million (1.8%) due to
    mainly increased travel and advertising costs.
    2005/2004Operating expenses
        of our express business for 2005 increased by €302 million (6.6%) compared to 2004. This was driven mainly
        by the strong international volume growth, the expansion of our business
        in China, Eastern Europe and India and the high costs of fuel for our
        aircraft, linehaul and pick-up and delivery vehicles. Cost of materials
        increased by €64 million (41.3%) primarily due to the higher fuel
        costs incurred in all business units. Work contracted out and other external
        expenses increased by €156 million (6.5%). This included the cost
        of linehaul and pick-up and delivery, which have increased to service
        the higher volumes and to improve the service quality and also included
        the higher fuel costs from commercial linehaul and subcontractors. Salaries
        and social security contributions increased by €60 million (3.8%)
        due to the additional number of full-time equivalents including the acquisition
        in Slovenia and expansion of our activities in India, salary increases
        for existing employees, and severance and redundancy payments. Depreciation,
        amortisation and impairments increased by €5 million (3%) due to
        the additional capital expenditure, particularly the expansions to the
        European air and road network hubs and the development of the SAP back
        office system. Other operating expenses increased by €17 million
    (6.4%) due to increased advertising and consultant costs. |  | EXPRESS OPERATING INCOME
        2006/2005The express business operating income for 2006 increased by €104
        million (21.8%) compared to 2005.The improvement in operating income was primarily
        due to good volume growth, particularly in the international business
        across all customer segments, and good cost control, including increased
        utilisation of the European networks. Our domestic businesses recorded
        lower levels of growth due to difficult market conditions in the mature
        European markets of France and the UK as well as investments required
        in specific countries such as India for future growth. All of our express
        business units achieved improvements in their operating income. Improvements
        were most significant in Germany, the Benelux countries, Italy, the Scandinavian
        countries, Hungary, Switzerland, Austria, the Czech Republic and Poland.
        The organic growth in operating income for 2006 increased by €117
        million (24.6%) compared to 2005. The acquisition effects amounted to
        €11 million (2.4%) and foreign exchange fluctuations amounted to
        €2 million (0.4%) negatively.
      Overall operating income as a percentage of express business
          operating revenues increased to 9.6% in 2006 compared to 8.9% in 2005.
      2005/2004The express business operating income for 2005 increased by €98
        million (25.9%) compared to 2004.
      The improvement in operating income was primarily due
          to good volume growth, particularly in the international business across
          all customer segments, good cost control, including increased utilisation
          of the European networks, and continued yield improvements. Our domestic
          businesses recorded lower levels of growth due to stagnation in a number
          of key European economies. Almost all our express business units achieved
          improvements in their operating income. Improvements were most significant
          in the Benelux countries, Germany, the Scandinavian countries, Turkey,
          Switzerland, Spain, Austria, the Czech Republic and Poland. The organic
          growth in operating income for 2005 increased by €93 million (24.6%)
          compared to 2004. The positive impact of foreign exchange fluctuations
          amounted to €5 million (1.3%).
      Overall operating income as a percentage of express business
          operating revenues increased to 8.9% for 2005 compared to 7.6% in 2004.
          Excluding the transfer of the innight business from logistics, the
    return on sales was 9.2% for 2005 compared to 7.9% in 2004.
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| | THE MAIL DIVISION | | | CHAPTER
      4
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|  |                                                           
|- | ----------------------------------------------------------
| | Post
        is my family and 
        my family is Post.
| 
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|CHAPTER
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      MAIL DIVISION | 
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| | TNT
      POST NEDERLAND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
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| | Theo is
      calm. Very calm. He says its the result of his job. After 32 years
      at TNT Post, he claims that each morning he gets up to go to work he is
      heading off to his hobby. Thats an enviable situation to be in. Theres
      probably plenty to talk about at family reunions too, as three of his sons
      and his daughter-in-law work or have worked at Post. But Theo does more
      than deliver letters. He is the Drachten representative for BIC (barcode
      management of letterboxes and clients) and the regional manager for the
      company vehicles on-board computers. Add his volunteering as a Game
      Guide for the World Food Programme and its no wonder he doesnt
      know where the time has gone since he started in 1974. If it was up to him,
      hed be at Post for another 30 years.                                                                                                                                                                   | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
| | It seems like
        yesterday when I started. I had an interview at Post after leaving school.
        It looked good: a steady income, the security of being a civil servant
        and the chance to earn 200 guilders more than with any other company.
        Im so glad I went with my gut feeling. Im still here and I
        have loved every minute of it so far. Of course many things are different
        to when I started  the change from PTT into TPG and now TNT; the
        introduction of the sorting machines; and now open postal markets and
        the associated competition. But although the company has changed, my colleagues
        are all pretty much the same. Post people are Post people. Full stop.
        You either have it in you or you dont. You have to be reliable,
        friendly and, above all, you have to be sociable. Were the neighbourhood
        social workers! Someone could make a good penny or two by using a postmans
        local knowledge! |  | One of my favourite
        activities at Post is being a Game Guide. I was trained in Leeuwarden
        and now visit about 70 schools each year where I talk to the 8 to 12 year
        olds. We play the WFP game and discuss the differences between here in
        the Netherlands and places where the children are not as fortunate as
        we are. Ive spoken to hundreds of children and hope Ive made
        a difference to them. Even if they now think just a little more about
        what they have and feel a bond, a connection with the children who have
        less, I would be delighted. Maybe Im helping someone indirectly
        that way.
      You know, people
        ask me sometimes how long I still have to work. I look them in the eye
        and say: As long as theyll let me!
      THEO LAPTNT Post Nederland,
        Postman+, WFP Game Guide 53 years old, married, 4 sons | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 

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|CHAPTER
      4 | | | THE
      MAIL DIVISION | 38
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|BUSINESS DESCRIPTION
      Our mail division provides services for collecting, sorting,
        transporting and distributing domestic and international mail, including
        letters, printed matter and parcels, as well as for distributing addressed
        direct mail and unaddressed mail (i.e. the item of correspondence does
        not carry an individual address). We also provide a range of data and
        document management services, including direct marketing and interactive
        services and services for managing physical and electronic information
        flows.
      Our substantial and lengthy experience in the mail industry
        has helped us become one of the worlds leading postal operators.
        It also helps us safeguarding and further developing our leading positions
        in changing markets. In addition to providing a world-class mail service,
        we continue combining our expertise with technology to develop new mail
        related data and document management services that meet specific consumer
        and business needs.
      Our mail division is organised in four business lines:
        Mail Netherlands, Cross-border Mail, European Mail Networks and Data and
        Document Management, the latter of which we operate under the brand name
        Cendris.
      Mail NetherlandsOur Mail Netherlands business line collects,
        sorts, transports and delivers postal items, including letters, direct
        mail, printed matter, magazines, newspapers and parcels within the Netherlands.
      Mandatory postal services provided in the Netherlands
        form part of Mail Netherlands. Our subsidiary Royal TNT Post B.V. (TNT
        Post) performs these mandatory postal services. Our operations are subject
        to significant domestic and European regulations which are described in
        detail in chapter 13.
      Under the Dutch Postal Act we are required to provide
        mandatory postal services. The domestic mandatory postal services mainly
        consist of the conveyance against payment of standard single rates of
        letters and printed matter, including registered mail, with a maximum
        individual weight of two kilogrammes and postal parcels with a maximum
        individual weight of 10 kilogrammes. In addition, the provision of certain
        mandatory postal services is reserved exclusively to us. These reserved
        postal services include the conveyance of letters weighing up to 50 grammes
        (100 grammes prior to 1 January 2006) within the Netherlands. The exclusive
        right does not extend to the conveyance of letters by a business to its
        own customers.
      Certain services are not included in the mandatory services
        that we are required to provide, including the delivery of bulk printed
        matter such as advertising, magazines and newspapers, the delivery of
        bulk letters with a weight above 50 grammes and unaddressed mail items.
        See chapter 13 for more information. Tariffs for mandatory postal services
        are required to be transparent, non-discriminatory and uniform. We may,
        however, grant volume discounts and negotiate specific prices and conditions
        with high volume users.
      The marketing approach for Mail Netherlands varies for
        different market segments. This differentiated approach enables us to
        increase customer satisfaction together with effectiveness |  | and efficiency improvements. It ranges from
        physical outlets (post offices) and mass media for consumers and small
        and medium enterprises, and call centres for larger businesses to personal
        selling for key accounts. Internet and new media are increasingly used
        for all segments. The use of direct mail remains key in all our marketing
        and sales activities. Such an approach is key in our product portfolio
        and price strategy as well. To serve the different and continuously changing
        customer needs, we have developed a broader range of products such as
        our Economy service, and in addition we have started to set up a new network
        within our subsidiary Netwerk VSP for addressed mail, offering
        a lower service for lower prices.
      The domestic mail service we provide in our home market
        in the Netherlands consistently ranks among the most efficient and competitively
        priced in Europe. Our customers enjoyed a near 97% next-day delivery of
        letters at an overall price that, when corrected for inflation, has actually
        decreased by nearly 20% since the privatisation of our business in 1989.
        This is the direct result of our price/value strategy and well above the
        95% next-day delivery of letters that is legally required.Our direct mail business comprises all activities
        involving distribution within domestic borders of addressed advertising
        mail and magazines (referred to in the industry as direct mail).
        The vast majority of the delivery of direct mail is not a reserved postal
        service and is therefore subject to competition. Initially, direct mail
        was predominantly used by mail-order companies, banks and insurance companies,
        but recently it is increasingly being used by a wide variety of companies,
        regardless of size. Prior to 2002, we achieved growth in direct mail volumes
        due to economic growth in general, our innovative marketing approach and
        developments in the communications market. Beginning in 2002 and continuing
        in 2003 and 2004, a decline in direct marketing expenditures, due to slow
        economic growth and competition with other communications media in the
        advertising market, negatively affected our direct mail volumes. In 2005
        we saw a slight recovery in the addressed direct mail market followed
        by a stabilisation of market volumes in 2006. We believe that better targeted
        direct mailings, which have a more limited circulation, may impede future
        growth in direct mail volumes.
      Our domestic mail system is organised around 11 main
        sorting centres, six of which are mechanically automated centres developed
        in recent years and are dedicated to letters and printed matter, three
        are dedicated to parcels, one to registered mail and one to international
        mail. In 2006 we announced the closure of the sorting centre for international
        mail by the second quarter of 2007. Our international mail activities
        will be integrated in the remaining system of sorting centres. At the
        moment a review of this system is being carried out as part of our cost
        flexibility programme.
      The domestic mail process begins with the deposit of
        mail by customers at post boxes, post offices and other designated deposit
        points and the pick-up of mail from customers. Through a fleet of approximately
        4,070 vehicles either owned or leased by us, mail is collected and transported
        to one of the main sorting centres. After sorting, mail is transported
        to the main sorting centre in the region of its ultimate destination,
        where the mail is sorted to the level of an individual round of a mailman,
        and then it is delivered to one of our 465 mail distribution depots. From
        here the mail is arranged according
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             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|to street and house number and door-to-door delivery
        is then effected by one of our approximately 39,900 deliverers.
      Included in Mail Netherlands are the results of our 50%
        interest in Postkantoren B.V., a joint venture with Postbank N.V., a subsidiary
        of ING Group N.V. The core business of Postkantoren B.V. is the distribution
        of financial and communication services and products (including postal
        services) to consumers and small businesses throughout the Netherlands.
        Postkantoren B.V. operates a network of approximately 2,100 outlets for
        the services of one or both partners. This network of outlets, partly
        self owned and partly in franchise, helps to fulfil our mandatory service
        obligation to provide a minimum number and regional density of postal
        outlets, as well as certain other services. Due to the growing use of
        cash dispensers and the internet for banking and postal services, we are
        restructuring our outlets: replacing self owned outlets by franchise outlets
        (usually a shop within a shop). At the end of 2006, the joint venture
        operated about 270 self-owned outlets and about 1,830 franchise outlets,
        both offering a full assortment of postal products. We use all 2,100 outlets
        for the collection of letters and parcels, the sale of stamps, and the
        delivery of letters and parcels in the event that home delivery is not
        successful and express post. Banking and insurance products of Postbank
        are available in approximately 800 outlets.
      In addition, TNT Post itself operates a network of about
        230 Business Points, which provide postal services to small and medium
        sized enterprises. For the benefit of consumers, TNT Post uses more than
        6,000 retailers as stamp resellers, which means that we offered the Dutch
        market a total of more than 8,000 distribution points in 2006.
      Mail Netherlands also engages in activities related to
        philately and designs, produces, issues and distributes Dutch stamps.
        Mail Netherlands includes real estate business related to our mail process.
        Other activities of Mail Netherlands are renting out postal boxes, pick-up
        services for businesses, postal box office/home delivery services, change
        of address services, mail safekeeping services and postal re-routing services.
        Also included in this line are loyalty services and advisory services
        related to direct mail. Mail Netherlands also offers digital secure and
        hybrid mail services. Some of the innovative services that are offered
        in Mail Netherlands include Notabox, a completely digital consumer orientated
        mail service for large mailers. We launched Notabox in cooperation with
        the major Dutch retail banks in January 2006. Other examples of new launches
        in 2006 are Scanpost, a new service including scanning, classification
        and electronic delivery of inbound business mail into the business processes
        of customers, the Nationale-Apotheek.nl, which supplies medicine
        directly to the homes of consumers developed in cooperation with various
        healthcare partners, and TNT Post Fotoservice, an internet
        service for printing and delivering photos and calendars.
      European Mail NetworksThrough our European Mail Networks business
        line, we are building a position to offer our customers a full service
        concept for mail, based upon high quality of service and wide coverage
        in addressed and unaddressed delivery. In addition, we offer a portfolio
        of mail-related services to reinforce our distribution activities. We
        have a presence now in Austria, Belgium, the Czech Republic, Germany,
        Italy, the Netherlands, Slovakia and |  | the United Kingdom and in 2006 the main
        focus continued to be on expanding addressed activities in the key markets
        of Germany and the United Kingdom.
      Cross-border MailOur Cross-border Mail business line offers a
        range of services to individual and business customers. These services
        include handling exported postal items in the Dutch market and all postal
        items imported to or passing through the Netherlands from foreign public
        and private postal operators.
      We provide two distinct cross-border mail services. The
        first of these is a mandatory postal service. For international inbound
        and outbound mail, based on the Dutch Postal Act and in accordance with
        the rules of the Universal Postal Union (UPU), mandatory postal services
        comprise conveyance against payment of both postal letter mail items at
        standard single rates and of bulk mail items at separately agreed rates
        with a maximum individual weight of two kilogrammes. International inbound
        and outbound postal parcels with a maximum individual weight of 20 kilogrammes
        are also included. We offer this service through a combination of our
        Mail Netherlands network and foreign public and private postal operators.
        For the international transport of mail, we make use of a wide variety
        of air carriers and, within Europe, a subcontracted truck network. The
        provision of certain mandatory cross-border postal services is reserved
        exclusively to us. These cross-border inbound reserved postal services
        involve the conveyance of letters weighing up to 50 grammes (100 grammes
        prior to 1 January 2006) within the Netherlands.
      Cross-border Mail services also include handling bulk
        mailings for a range of international customers, including publishers,
        mail-order companies, and financial service and direct mail companies.
        We conduct these activities through our 51% owned subsidiary Spring, owned
        together with Royal Mail Investments Limited and Singapore Post Limited.
        In addition to using its three shareholders delivery networks, systems,
        expertise and products, Spring uses delivery agreements with national
        and private postal operators.
      The bulk mailing section of the cross-border mail services
        market is highly competitive. Impending deregulation has prompted national
        and private postal operators to lower prices for business mail in order
        to compete and to enter foreign markets to position themselves for growth.
        Consolidation is resulting in fewer providers in the market. In most countries,
        the primary competitor is the traditional incumbent postal operator, but
        increasingly we see international postal operators such as Deutsche Post,
        Swiss Post International, De Post (Belgium) and La Poste (France) extending
        their operations.
      Springs name and credibility in the marketplace
        is achieved by delivering service and local expertise through a global
        network. Its key customers are publishers, corporates and direct marketeers.
        In addition to its cross-border business mail services, Spring also provides
        a number of value added services with the objective of retaining and growing
        its customer base. The business operates in three geographic regions:
        Europe, the Americas and Asia Pacific and is based in Amsterdam, New York
        and Singapore. The trading environment for Spring continues to be a significant
        challenge and is heavily influenced by the slow pace of liberalisation
        in the marketplace; in some countries there is a trend towards remonopolisation.
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|Data and Document ManagementThe services provided by our Data and Document
        Management business line, Cendris, consist of a complete portfolio of
        special solutions for direct communication, data and document management.
        Cendris provides services on finding and retaining customers and offers
        services for call centre activities, printing of statements and direct
        mail.
      Cendris Customer Information is the product portfolio
        within Cendris for data activities. Cendris Customer Information is an
        advisor and specialist in consumer and business information, database
        management, data analysis and marketing consultancy allowing Cendris to
        support its customers in their pursuit of loyal and profitable customers.
        Cendris Customer Information managed to increase its revenue in 2006,
        despite price pressure in the market.
      The Print & Fulfilment portfolio offers services
        for printing, digital presentation and fulfilment of transaction mail
        and direct mail. The key benefits for customers are cost reduction and
        control. We were successful in growing our business by contracting a number
        of major customers in the energy, telecommunications and insurance sectors.
        The Dutch print and mailing house, Euro Mail B.V., acquired in 2005, operated
        successfully in 2006. New activities were started in print |  | management, a broker activity for purchasing
        of printed matter and job handling. The scope of this activity is the
        entire print supply chain in which this broker function has clear unique
        selling points and delivers strong customer benefits. In 2006 this newly
        established business contributed positively to Cendris results.
      Cendris Customer Contact offers call centre services
        for inbound and outbound communication by telephone, e-mail and fax. These
        services increase the response to customers marketing campaigns
        or optimise outsourcing service operations. Our call centre activities,
        incorporated in 2004 in a joint venture with Essent, are experiencing
        fierce pressure on prices due to heavy competition. Our goal is to remain
        market leader by investing in a more efficient operation.
      FacilitiesIn the Netherlands our mail division uses 476
        of TNTs total of 1,707 buildings as sorting centres and distribution
        depots. We believe that these buildings are significantly utilised and
        provide sufficient capacity for 2007s business forecast. None of
        our properties is subject to any encumbrance.
      The principal mail facilities are as follows:
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|Location                           
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|Amsterdam-Schiphol, the Netherlands
|                                   
|Amsterdam, the Netherlands         
|                                   
|s Hertogenbosch, the Netherlands  
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|The Hague, the Netherlands         
|                                   
|Nieuwegein, the Netherlands        
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|Rotterdam, the Netherlands         
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|Zwolle, the Netherlands            
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|Amsterdam, the Netherlands         
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|Dordrecht, the Netherlands         
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|Zwolle, the Netherlands            
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|Arnhem, the Netherlands            
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STRATEGY AND ACTIONS

In the mail industry it is our ambition to become the leading
    provider of business and consumer related services for communication, transactions
    and delivery. We want our mail operations to be recognised as the industry
    benchmark for quality of service, efficiency and customer service, for producing
    the best returns in the industry, and for making optimal use of both new technologies
    and European postal market liberalisation. Our mail strategy is based on two key elements: 
    In our domestic mail operations in the Netherlands, we
      focus on our customers and on the efficiency of our network. We implement
      our customer centric approach through our sales channels, product development
      and new business. The price/value strategy together with the implementation
      of our cost flexibility measures are designed




to enable us to retain our margins within a stable band.
      In addition, we continue to offer high service quality and new services
      to customers that bring cost savings to their production chains.
    Internationally, we continue to expand in attractive markets
      along two tracks: 
    through an offensive approach we aim to build an alternative
      postal company to the incumbent operator in world-wide selected countries
      and markets. Our European Mail Networks business line offers addressed,
      unaddressed and segmented distribution solutions for letters and direct
      mail, brochures, leaflets and samples with an excellent price/quality ratio,
      and
    through postal alliances we strive to strengthen our position
      by way of cooperation with other organisations and postal operators.


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|These two key elements are supported
      by the following activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                     | Over 50% of the
        Dutch mail market is accessible to competition. This is well ahead of
        most other European mail markets. In the liberalised part of the Dutch
        mail market, we believe there is no market distortion. This can be illustrated
        through two competitors that each has full nationwide coverage for end-to-end
        mail delivery with a growing market share, which we believe is unique
        in Europe.
      In August 2006, the major Dutch banks, a few health insurers
        and some other large companies, each responsible for sending high volumes
        of mail, pooled their interests and set up the Vereniging Grootgebruikers
        Postdiensten (VGP), an organisation to represent their mutual interests
        in the addressed mail market. The VGP claims to represent approximately
        14% of the addressed mail market in the Netherlands. This could adversely
        affect our mail divisions revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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      in the Netherlands, Belgium and the United Kingdom that could be expanded
      in the coming years into more geographic areas, and                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | our mail related data, print and document
      management services, such as direct and interactive marketing services and
      services for managing physical and electronic information flows,                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | our 51% owned subsidiary G3 Worldwide Mail
      N.V. (Spring), owned together with Royal Mail Investments Limited, a UK
      company, and Singapore Post Limited, that offers cross-border mail services
      on a global scale. |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|BUSINESS CONTEXT We do not believe that the postal market has
        yet absorbed all effects of the digitalisation of information flows. Large
        parts of the bulk transaction mail volumes will most likely be substituted
        by electronic ways of communication in the future. We recognise, however,
        that to a large extent the substitution process will be driven by the
        attitude of consumers and businesses towards electronic mail. Understandably,
        this attitude varies with the content of the messages and the function
        of mail.
      Together, the penetration level of direct mail in the
        advertising market, the growth of the economy, the relative position of
        direct mail in relation to other advertising media and the maturity of
        the unaddressed mail market will determine whether in any individual national
        market we will still see an increase in direct mail items per capita in
        the coming years. For mature mail markets such as the market in the Netherlands
        we believe the direct mail market is saturated and we do not expect much
        growth in the direct mail market in the coming years.
      The European liberalisation of the postal market is taking
        shape. Liberalisation and the creation of a level playing field, i.e. the
        possibility to compete on equal terms in the respective member states,
        will, however, be closely linked to each other. We expect that this will
        drive not only liberalisation in the Netherlands, but also the expected
        European liberalisation agenda after 2009. In the next few years we expect
        to see the emergence and continued growth of national alternative postal
        companies in several European countries. Their success will to a large
        extent depend on the regulatory conditions, irrespective of whether the
        market is fully liberalised. In the Netherlands the full liberalisation
        of the postal market will depend on the actual liberalisation in the United
        Kingdom and Germany.
      Closely related to this liberalisation process will be
        the definition of the Universal Service Obligation and its funding. We
        expect an intense discussion both at national and European levels on how
        the content of universal service is to be shaped in the future. The value
        added tax exemption for universal services granted to the universal service
        provider, which now leads to substantial market distortion in most member
        states, needs close attention in this regard. Other forms of non-regulation
        based market distortion of full competition needs monitoring as well.
        Increased competition resulting from liberalisation will create additional
        pressure on national postal operators. |                                                                                                                                                                                                                                     | Most European postal operators were turned
        into corporations starting in 1989. Many governments are now considering
        privatisation of their national postal operator. In the process of privatisation
        there is an active interest by private equity as well as several industry
        players. This may result in a fundamental change in the European postal
        landscape and might trigger a consolidation process that will limit the
        number of independent postal players.
      Our domestic mail business is seasonal in the sense that
        it is affected by public and local holiday patterns. The third quarter
        is traditionally our weakest quarter due to the summer holiday season
        in the Netherlands and the revenue in the month of December is positively
        impacted by the distribution of Christmas greeting cards and presents.
      Mail NetherlandsOur mail business in the Netherlands is highly
        regulated, the details of which are presented in chapter 13. The current
        Dutch Postal Act requires us to provide the mandatory postal services
        in the Netherlands at regulated prices and grants us the exclusive right
        to provide some of these services (referred to as reserved postal services).
        Despite declining volumes in the Netherlands, due to the saturation of
        the Dutch domestic mail market, growing competition and substitution by
        customers of other methods of delivering information, mail activities
        have provided us with a stable source of revenue and income. Dutch and
        EU regulations prohibit us from using the revenues from reserved postal
        services to cross-subsidise other activities.
      In the Netherlands our two main competitors in the addressed
        mail market, Sandd B.V. and Selekt Mail Nederland (the latter is owned
        by Deutsche Post World Net and Dutch publisher Koninklijke Wegener N.V.),
        have both built their own nationwide delivery capability based on a delivery
        frequency of twice a week. These two main competitors claim to have delivered
        around 650 million addressed postal items together in 2006. We estimate
        that their joint market share was around 10% of the total volume of the
        Dutch addressed mail market. We expect that these competitors will continue
        to grow.
      Customers choose our services because of our high price/value
        ratio based on the high effectiveness of mail as a communication medium
        and our ability to reduce the total chain costs for our customers.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   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|Due to the efficiency
        of our operations and customer orientation, we believe that in spite of
        liberalisation, we will retain our leadership position in our traditional
        home market. Adjusting to reduced mail volumes and facilitating initiatives
        to limit volume decline, however, will require a continuous and increased
        effort to realise cost flexibility. As an indication of our strong position,
        the automotive, charitable, home shopping and government branches are
        examples where we regained business from competition in 2006.
      Full liberalisation of the Dutch market will take place
        under certain conditions, mainly dependent on developments in the United
        Kingdom and Germany. Full liberalisation, however, is not expected before
        January 2008.
      The Dutch parliament is expected to further debate the
        proposed new Postal Act during the course of 2007, including the future
        size of the new Dutch Universal Service Obligation. The Dutch government
        has proposed to limit the Universal Service Obligation in the Netherlands
        to single piece items and cross border mail when full liberalisation of
        the Dutch postal market takes place.
      European Mail NetworksIn other countries we are growing our mail services,
        although substitution is a relevant factor that negatively influences the
        total size of most West European mail markets. At the moment our potential
        growth in other countries is also negatively affected by various barriers
        to entry, including fiscal (VAT) and regulatory.
      Cross-border MailThe UPU is a specialised agency within the United
        Nations framework. It is responsible for the regulation of cross-border
        postal services. Practically all nations are members of the UPU. The common
        rules applicable to cross-border postal services are laid down in the
        UPU Convention and its regulations. In the Convention, the UPU established
        an international system for mutual payments for the delivery of cross-border
        letter mail, known as the terminal dues system. The purpose is to compensate
        the destination countrys public postal operator for delivering international
        letter post. A different compensation scheme with similar purposes exists
        for parcel mail.
      Most European postal operators view the UPU target terminal
        dues system as inadequate for these purposes. As a consequence a significant
        majority of them are party to the separate, multilateral REIMS II
        agreement where terminal dues are related to a higher percentage of domestic
        tariffs, and to a certain extent to service quality as well. We have not
        entered into the REIMS II agreement because we feel it does not contain
        a strong incentive/penalty system that would guarantee improvement of
        the quality of service. Instead, we have concluded commercially oriented
        bilateral agreements with most of the European postal operators. The REIMS
        II parties plus TNT and Royal Mail have entered into negotiations with
        a view to concluding a market oriented REIMS III agreement.
        These negotiations are very complicated and have not been finalised. TNT
        Post is currently negotiating bilateral agreements for 2007.
      Most of the 10 countries that joined the EU on 1 May
        2004 have entered into a REIMS East agreement with the REIMS
        II parties. This agreement allows the new EU public postal |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | operators to use a transitional period
        to get accustomed to terminal dues that are based on domestic tariffs.
        We decided to become a member of the REIMS East agreement as of 1 January
        2005. In this way we avoid lengthy bilateral negotiations and create considerable
        goodwill that will support our position in future terminal dues negotiations.
        The financial effects of this decision are limited due to low volumes exchanged
        between Royal TNT Post B.V. and postal operators of the accession countries.
      In international postal services, other than reserved
        postal services, we face competition from other public postal operators
        and from a wide variety of private, internationally operating companies.
        Competition for these services is based primarily on price and quality
        of service.
      BUSINESS PERFORMANCEWe have maintained our profitability because of our customer focus
        and a set of cost restructuring measures that are being implemented with
        great rigour. Through our customer focus we are able to illustrate the
        effectiveness of mail as a communications medium, realise optimal total
        chain costs for our customers, develop new innovative services and realise
        high service quality standards. The ability to offer data and document
        management services is also a competitive factor. In 2001, we formulated
        our cost flexibility programme with works council discussions and initial
        pilots aiming at €320 million of savings on an annualised basis by
        2012, compared to our cost levels in 2001. In 2004, we updated this cost
        flexibility programme with an overhead Master Plan, and we now expect this
        programme to achieve annualised cost savings by 2012 of approximately
        €370 million. In 2006, we achieved aggregate cost savings of €298
        million, which was €64 million more than in 2005. We are ahead of
        the implementation schedule last communicated in December 2004. The cost
        saving programme includes a restructuring of the marketing and sales channels
        and organisation, a restructuring of our overhead and a restructuring
        of our operations.
      Mail NetherlandsIn the Netherlands we have announced new initiatives to:
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      and price differentiation and investments to maintain and generate new volumes,
      and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | reduce costs further through initiatives that we expect
      to generate €300 million in additional annual savings on top of the
      already existing cost flexibility measures (under the so called Master Plans).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | The coming period will bring a continuation
      of competitive pressure. Without new commercial initiatives, we could see
      a volume decline of up to 40% by 2015. In December 2006 we announced new
      initiatives to be added to the existing cost flexibility programme. These
      plans include an intensified market response combined with additional cost
      reductions and an increase in cost flexibility. The intensified market response
      will bring further product and price differentiation and investments to
      maintain and generate (new) volumes. It is our ambition to limit volume
      decline over the period 2006-2015 to an average of between 3% and 4% per
      annum, although in the first one or two years after full liberalisation
      we expect slightly higher declines.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             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|43 | THE MAIL DIVISION | | | CHAPTER
      4
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|The cost measures include a renewed effort to increase
        efficiency (e.g. process redesign) and steps towards market conforming
        labour conditions. We intend to stimulate voluntary attrition supported
        by social measures to realise these plans. On top of the existing €370
        million cost flexibility programme savings, of which €298 were by
        the end of 2006, the new initiatives are expected to bring an additional
        €300 million of savings, to be implemented up to 2015. The newly
        announced plans will contain cost savings throughout the operational chain
        of collection, transport, sorting, preparation and delivery. The plans
        also include steps towards a more market conforming wage structure and
        a renewed effort to optimise marketing and sales and overhead processes.
      We will discuss and refine the plans with employees,
        unions and works councils and detail the plans for implementation. We
        expect first savings from these new initiatives to materialise in 2008.
        In the course of 2007 we intend to announce more details related to the
        new initiatives.
      European Mail NetworksIn Germany, one of the key mail markets in Europe,
        we accelerated the expansion of our regional distribution networks to
        strengthen our position in nationwide addressed delivery. We have decided
        not to build a nationwide network, but will focus on high density areas,
        either through greenfield operations under the brand name TNT Post Regioservice
        or via acquisitions. The aim is to be active in all key areas in Germany
        with our own regional distribution. In 2006 we established a coverage
        through own networks of close to 20%. With this we can secure the nationwide
        product offering of our 71% subsidiary TNT Post AG & Co. KG, which
        successfully gained new customers and almost doubled revenues in 2006.
        The national coverage for the distribution of letter mail is more than
        90% of all households in Germany. This has been achieved by us through
        partnerships with regional distribution companies, of which TNT Post Regioservice
        is one. In 2006 we acquired PostCon Deutschland AG, the market leader
        in consolidation in Germany. Through this acquisition we were able to
        grow our customer base and to bring volume into our own networks.
      The United Kingdom is the second largest market in Europe
        and is therefore a key market for us. In the United Kingdom we have contracted
        with Royal Mail for downstream access which allows us to offer customers
        an alternative in the postal market. This arrangement was successful in
        2006, as we gained many important contracts. At the same time we are setting
        up sorting facilities to be able to offer customers a broader portfolio
        of services. Our ultimate goal is to provide customers with an end-to-end
        solution. We made the first steps towards this in 2006.
      In the fourth quarter of 2006 we also launched a parcel
        service in the UK. The acquisition of the JD Williams courier network
        provides an entry for TNT Post UK to business to consumer and consumer
        to consumer parcel and delivery markets, providing 80% household coverage
        in the United Kingdom. The JD Williams courier network employs 194 employees
        supported by a network of over 2,200 self employed couriers. This acquisition
        is a significant gain for our end-to-end strategy, but does require operational
        fine-tuning in 2007.
      In unaddressed delivery we strengthened our position
        in 2006 in all markets where we are present, mainly through organic |  | growth. In the Netherlands, Belgium and
        Central and Eastern Europe we are a significant player in unaddressed delivery.
        In almost all countries, however, we are experiencing intense price competition
        (mostly by companies owned by other postal operators who use their dominant
        position and wish to enter this market). Our goal is to retain our market
        share by retaining customers and volumes. We invest in quality of services
        to differentiate ourselves from those competing on price.
      In 2006, we acquired three unaddressed mail companies
        in Italy. These acquisitions strengthened our position and are next steps
        towards consolidating the market.
      In China we have created a direct mail company to allow
        us to capitalise on what we expect will be the strong development of the
        Chinese direct mail market.
      Data and Document ManagementAs a result of TNTs refined focus strategy,
        we have decided to focus on Data, Print & Fulfilment and Customer
        Contact. The mail, repro and capture activities, therefore, were no longer
        part of our core strategy, and we sold Cendris Document Management B.V.
        to the Spanish company Service Point Solutions S.A. in the fourth quarter
        of 2006, and also sold the activities of Cendris Deutschland GmbH.
      FINANCIAL RESULTS
      In 2006, our mail business earned revenues of €4,065
        million, a 2.8% increase compared to 2005. Mail accounted for 40.4% of
        our group operating revenues and 59.6% of our group operating income.
      In 2006, approximately 24.6% of our mail operating revenues
        and approximately 9.9% of the groups operating revenues (2005: 28.2%
        and 11.1%) were derived from reserved postal services in which we generally
        were not subject to competition. Notwithstanding that other companies
        are legally precluded by the Postal Concession granted to us by the State
        of the Netherlands from providing conveyance of items of correspondence
        that fall under reserved postal services, a small number of these are
        carried by other providers. We are aware of this practice, but the effect
        on volumes is immaterial.
      In 2006 we experienced a volume decline of 4.3% per annum
        compared to 2005. The underlying decline of volumes adjusted for a comparable
        number of working days per year was 4.0% per annum. The total TNT Mail
        Netherlands addressed mail volumes have decreased an average 2.2% per
        annum since 2000. This is within the guidance we gave in 2001 and the
        indicated average decline between 2% and 3% up to 2010. In 2004 we updated
        this guidance with an average volume decline between 3% and 4% annually
        from 2004 up to 2012 onwards. The average decline over 2005 and 2006 has
        been around 3.7% per annum.
      The decline was due in part to substitution of electronic
        media (see chapter 10), and accelerated by competition. We expect a further
        decline in addressed mail over the next few years due to the increasing
        use of electronic mail, electronic bill presentment, reduced frequency
        of bank statements, competition and other factors.
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|2006 ANNUAL REPORT AND FORM 20-F

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|CHAPTER 4 | | | THE MAIL DIVISION | 44
|--------- | - | ----------------- | --
|         

|The following tables sets out the financial
      performance of our mail division for the past three years: |  | 
|------------------------------------------------------------------------------------------------------------ |  | 



|                                                                                                                                        | Year ended at 31 December |  
|--------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | -
|                                                                                                                                        |                           |  
|MAIL FINANCIAL OVERVIEW                                                                                                                 | 2006                      |  
|                                                                                                                                        |                           |  
|                                                                                                                                        | US$                       |  
|                                                                                                                                        |                           |  
|Total operating revenues                                                                                                                | 5,365                     |  
|                                                                                                                                        |                           |  
|as % of total
      operating revenues TNT                                                                                              |                           |  
|                                                                                                                                        |                           |  
|Other income                                                                                                                            | 77                        |  
|                                                                                                                                        |                           |  
|Total operating expenses                                                                                                                | (4,438                    | )
|                                                                                                                                        |                           |  
|Total operating income                                                                                                                  | 1,004                     |  
|                                                                                                                                        |                           |  
|as % of mail
      operating revenues                                                                                                   |                           |  
|                                                                                                                                        |                           |  
|(in millions, except percentages)1 Figures have been adjusted to reflect the transfer of Cendris UK from
      mail to express in 2006.



|                                                                                                                                        | Year ended at 31 December | 
|--------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                                                                        |                           | 
|MAIL OPERATING REVENUES                                                                                                                 | 2006                      | 
|                                                                                                                                        |                           | 
|                                                                                                                                        | US$                       | 
|                                                                                                                                        |                           | 
|Mail Netherlands                                                                                                                        | 3,427                     | 
|                                                                                                                                        |                           | 
|European Mail Networks                                                                                                                  | 988                       | 
|                                                                                                                                        |                           | 
|Cross-border Mail                                                                                                                       | 705                       | 
|                                                                                                                                        |                           | 
|Data and Document Management                                                                                                            | 245                       | 
|                                                                                                                                        |                           | 
|Total operating revenues                                                                                                                | 5,365                     | 
|                                                                                                                                        |                           | 
|as % of total operating revenues
      TNT                                                                                              |                           | 
|                                                                                                                                        |                           | 
|(in millions, except percentages)1 Figures have been adjusted to reflect the transfer of Cendris UK from
      mail to express in 2006.



|                                                                                                                                        | Year ended at 31 December | 
|--------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                                                                        |                           | 
|MAIL OPERATING EXPENSES                                                                                                                 | 2006                      | 
|                                                                                                                                        |                           | 
|                                                                                                                                        | US$                       | 
|                                                                                                                                        |                           | 
|Cost of materials                                                                                                                       | 216                       | 
|                                                                                                                                        |                           | 
|Work contracted out and other external expenses                                                                                         | 1,588                     | 
|                                                                                                                                        |                           | 
|Salaries, pensions and social security contributions                                                                                    | 2,071                     | 
|                                                                                                                                        |                           | 
|Depreciation, amortisation and impairments                                                                                              | 178                       | 
|                                                                                                                                        |                           | 
|Other operating expenses                                                                                                                | 385                       | 
|                                                                                                                                        |                           | 
|Total operating expenses                                                                                                                | 4,438                     | 
|                                                                                                                                        |                           | 
|(in millions, except percentages)1 Figures have been adjusted to reflect the transfer of Cendris UK from
      mail to express in 2006.



|                                                                                                                                                                   | Year ended at 31 December | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | 
|                                                                                                                                                                   |                           | 
|MAIL OPERATING STATISTICS                                                                                                                                          | 2006                      | 
|                                                                                                                                                                   |                           | 
|Addressed postal items delivered by Mail Netherlands 1(millions)                                                                                                   | 4,918                     | 
|                                                                                                                                                                   |                           | 
|per Netherlands delivery address (items)                                                                                                                           | 644                       | 
|                                                                                                                                                                   |                           | 
|per Mail Netherlands FTE 2(thousands
      of items)                                                                                                               | 155                       | 
|                                                                                                                                                                   |                           | 
|per Netherlands inhabitant (items)                                                                                                                                 | 301                       | 
|                                                                                                                                                                   |                           | 
|per delivery day (millions)                                                                                                                                        | 16                        | 
|                                                                                                                                                                   |                           | 
|total operating revenues per FTE 2(thousands of €)                                                                                                                 | 95                        | 
|                                                                                                                                                                   |                           | 
|average percentage of national mail sorted
      automatically (%)                                                                                                 | 83                        | 
|                                                                                                                                                                   |                           | 
|Postal volumes by Cross-border (thousands of kilogrammes)                                                                                                          | 88,237                    | 
|                                                                                                                                                                   |                           | 
|Addressed postal items delivered by EMN (millions)                                                                                                                 | 894                       | 
|                                                                                                                                                                   |                           | 
|1 Excluding international mail items per delivery
      day (millions).2 The FTE (full-time employee equivalent) definition is based on a 37-hour
      work week.

|The operating revenues of the mail business
        increased by 2.8% in 2006. In Mail Netherlands addressed mail volumes
        decreased by 4.3%, and revenues declined by 1.9%. On a comparable number
        of working days basis, the addressed Mail Netherlands volume decline
        was 4.0%. Revenues in our cross-border line of business increased by 3.7%.
        Revenues in European Mail Networks showed a 25.5% growth. Data and Document
        Management revenues decreased by 5.1%. |  | Addressed Mail Netherlands volumes continued to decline
      as a result of growing competition, substitution and customers suspending
      their mailings. Our mail division focused on quality and margins to defend
      its market position. At the European level we expanded in the addressed
      mail segment through our start-ups and acquisitions in the United Kingdom
      and Germany.
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|45 | THE MAIL DIVISION | | | CHAPTER
      4
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|  

|Operating income decreased by 1.8% in 2006. This decrease
        was mainly due to the expansion of our European Mail Networks and, in
        Mail Netherlands, structural cost increases, partly offset by continued
        progress in improving productivity and cost control.
      MAIL OPERATING REVENUES2006/2005In 2006, operating revenues from our mail business
        increased by €110 million (2.8%) compared to 2005. Organic operating
        revenues increased by €63 million (1.6%). Compared to last year,
        2006 showed a €46 million (1.2%) positive acquisition effect, due
        to a number of acquisitions realised in 2005 (including Reischl, Robl,
        Euro Mail B.V., Szunyog and Rheinkurier GmbH), acquisitions realised during
        2006 (including PostCon Deutschland AG, CBS City Briefservice GmbH , MailXpress
        GmbH, Ridas Sicherheits- und Handelsgesellscheft m.b.H, Germany, TWM Italia
        Srl. and Turbopost GmbH, Giebiesse Italia Srl. and JD Williams) and disposals
        in 2006 (including Cendris Document Management B.V., ID Company Fashion
        B.V., and our share in Mailprofs Employment B.V.). Foreign exchange effects
        accounted for an increase of €1 million (0.0%).
      Mail Netherlands operating revenues in 2006 decreased
        by €51 million (1.9%) compared to 2005. The organic volume decline
        in addressed mail items was partly offset by a positive price-mix effect
        and other effects.
      The continued underlying decline in addressed postal
        item volumes in 2006 (4.0%) was primarily due to competition in the non-mandatory
        area, accompanied by reduced demand for direct mail as a result of cost
        saving programmes initiated by some of our key customers due to the continued
        substitution by electronic media. We expect these trends to continue,
        although Mail Netherlands benefited from extra volumes of mail resulting
        from changes in the health insurance system in the Netherlands. The underlying
        volume decline was accompanied by a lower average number of working days
        in 2006 compared to 2005, which had a 0.3% downward volume effect.
      In Cross-border Mail competition remained fierce, with
        the key international postal operators continuing to compete on price.
        Cross-border Mail operating revenues in 2006 increased organically by
        €19 million (3.7%) compared to 2005. The main driving factors for
        this increase were growth in our domestic export and parcels.
      Other income increased by €32 million to €58
        million, mainly as a result of higher book gains on disposed companies
        (€22 million) and the higher sale of real estate (€12 million).
      European Mail Networks operating revenues increased by
        25.5% in 2006. All countries contributed to this growth. The United Kingdom,
        Germany, Italy and Central Europe showed double digit growth.
      In the United Kingdom we continued to broaden our customer
        portfolio and showed strong growth in the downstream access services with
        Royal Mail. Complementary to this service, we started end to end initiatives
        in the cities of Manchester, Glasgow and Bristol. Furthermore we started
        our new parcel service through the acquired JD Williams courier network
        as |  | from the third quarter of 2006. In Germany
        we succeeded in strengthening our position via greenfield start-ups in
        key cities and multiple acquisitions across the country. We managed to
        increase the last mile coverage by our own network to 20% of the German
        households. Including our partners, TNT Post AG & Co. KG (formerly
        EP Europost) has now reached over 90% coverage. Despite strong competition
        from Deutsche Post and the founding of PIN Group, a consortium of the
        most important German publishers, TNT Post AG & Co. KG almost doubled
        its revenues. In the third quarter we started our own sorting facilities
        and acquired the leading mail consolidator PostCon. In Italy we expanded
        our unaddressed network via the acquisition of TWM Italia Srl., Gibiesse
        Italia Srl. and TG Distribuzioni Srl.
      In a competitive market, Data and Document Management
        operating revenues decreased by €10 million (5.1%). This decrease
        was mainly attributable to the business line Cendris Document Management
        including the disposal effect of Cendris Document Management B.V. and
        Cendris Deutschland GmbH.
      2005/2004In 2005, operating revenues from our mail business
        increased by €103 million (2.7%) compared to 2004. Organic operating
        revenues increased by €82 million (2.1%). Compared to last year,
        2005 showed a €18 million (0.5%) positive acquisition effect, due
        to a number of acquisitions effective in 2004 (including Prime Vision,
        Seducom and our joint venture with Essent N.V., named Cendris BSC Customer
        Contact B.V.), the disposal of Denis Bodden N.V., and acquisitions effective
        in 2005 (including Reischl, Robl, Euro Mail B.V., Szunyog and Rheinkurier
        GmbH). Foreign exchange effects accounted for an increase of €3 million
        (0.1%).
      Mail Netherlands operating revenues in 2005 decreased
        by €5 million (0.2%) compared to 2004. The organic volume decline
        in addressed mail items was partly offset by a positive price-mix effect
        and other effects.
      The continued underlying decline in addressed postal
        item volumes in 2005 (2.0%) was primarily due to competition in the non-mandatory
        area, accompanied by reduced demand for direct mail as a result of cost
        saving programmes initiated by some of our key customers due to the continued
        substitution of electronic media. We expect these trends to continue,
        although Mail Netherlands benefited from extra volumes of mail resulting
        from changes in the health insurance and early retirement legislation
        in the Netherlands in the second half of 2005. The underlying volume decline
        was accompanied by a lower average number of working days in 2005 compared
        to 2004, which had a 1.1% downward volume effect.
      During 2005 competition remained fierce, with the key
        international postal operators continuing to compete on price. Cross-border
        Mail operating revenues in 2005 decreased organically by €38 million
        (6.9%) compared to 2004. The main driving factors for this decline were
        international competition, our policy to reduce and terminate unprofitable
        contracts of volume in our Spring business and the renewed sales agency
        agreement with Royal Mail Group in the middle of 2004, which resulted
        in a lower fee. Foreign exchange effects caused a 0.4% increase in operating
        revenues, primarily related to the fluctuation of the euro against the
        US dollar, GB pound and the Singapore dollar.
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|2006 ANNUAL REPORT AND FORM 20-F

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|CHAPTER
      4 | | | THE MAIL DIVISION | 46
|--------------- | - | ----------------- | --
|               

|Other income increased due to the sale of mail related
        real estate.
      European Mail Networks operating revenues increased by
        23.3% in 2005. All countries except Belgium, where our business is still
        negatively affected by competition, contributed to this growth. The United
        Kingdom, Germany, Italy and Central Europe showed double digit growth.
      In the United Kingdom our start-up business was successful
        and established a lead position in the UK downstream access market. In
        Germany we succeeded in strengthening our position despite strong competition
        from Deutsche Post and the initiative of a group of German publishers
        to cooperate in mail distribution. Our German start-up in addressed mail,
        TNT Post AG & Co. KG (formerly EP Europost), more than doubled its
        revenue. It succeeded in closing contracts with important customers. Furthermore,
        TNT Post Regioservice GmbH doubled its revenue by creating its own networks
        in key strategic areas. Focus has been on securing the position by enlarging
        our own distribution networks in other major cities, strengthening the
        relationships with partner distribution networks and building up a position
        in the consolidation market. In Italy mail addressed, unaddressed and
        mail related activities showed double digit growth.
        In a competitive market, Data and Document Management operating revenues
        increased by €31 million (18.8%). This increase was mainly attributable
        to the full year contribution of the joint venture started in 2004 with
        Essent N.V., named Cendris BSC Customer Contact B.V., and the acquisition
        of Euro Mail B.V. in 2005.
      MAIL OPERATING EXPENSES2006/2005Our operating expenses increased by €156
        million (4.9%) in 2006 compared to 2005.
      Costs for work contracted out increased by €168
        million, which is attributable to the organic growth and acquisitions
        realised in European Mail Networks. The decrease in cost of materials
        of €16 million compared to 2005 is mainly explained by the disposal
        of our 100% shareholding in Cendris Document Management B.V. In 2006 costs
        of salaries decreased by €37 million, mainly as a result of a reduction
        of FTEs in our mail division in connection with our cost flexibility programme
        and€50 million lower pension costs compared
        to 2005. These effects are partly offset by higher costs of salaries due
        to organic growth and acquisitions by our European Mail Networks, and
        €27 million restructuring costs in Mail Netherlands compared to €10
        million restructuring costs in 2005.
      Other operating expenses increased by €34 million
        compared to 2005, mainly due to the expansion costs in European Mail Networks,
        a VAT settlement with the Dutch tax authorities and the new TNT Post house
        style clothing and rebranding of TPG Post to TNT Post, partially offset
        by an €18 million release in respect of a lower estimate of the accrual
        for stamps sold but not yet used.
      2005/2004Our operating expenses increased by €149
        million (4.9%) in 2005 compared to 2004. Organic growth in European Mail
        Networks and acquisitions caused an increase in work |  | contracted out, partly offset by volume decreases in the
        business lines Mail Netherlands and Cross-border Mail. In 2004 costs of
        salaries benefited from a €9 million net positive one-off effect
        from a settlement of future wage guarantees and various social measures
        including social and pension contributions. The lack of this one-off effect
        in 2005, a €18 million increase due to the unwinding of a contract
        regarding liability for future wage guarantees in 2004, €80 million
        higher pension costs and €10 million restructuring costs in 2005
        caused an increase in salary costs, which could only partly be offset
        by savings (amongst others reflected in the decline in average FTEs
        equivalents from 43,825 in 2004 to 41,724 in 2005) in connection with
        our cost flexibility programme.
      MAIL OPERATING INCOME2006/2005In 2006 the mail business operating income decreased
        by €14 million (1.8%) compared to 2005, mainly due to the expansion
        of European Mail Networks and the continued volume decline in Mail Netherlands,
        and only partly offset by positive price-mix effects and our continued
        progress in improving productivity and cost control. The latter is mainly
        driven by our cost flexibility programme, which delivered additional savings
        of approximately €64 million in 2006, adding up to €298 million
        in estimated aggregated savings from the start of the programme in 2002.
        Furthermore, 2006 included €27 million restructuring costs in Mail
        Netherlands compared to €10 million in 2005. These effects were partly
        offset by €22 million book gains on disposals, €18 million release
        in respect of a lower estimate of the accrual for stamps sold but not
        yet used and book profit from the sale of real estate.
      In 2006, overall operating income of our mail division
        as a percentage of its operating revenues decreased to 18.7% compared
        to 19.6% in 2005.
      2005/2004The mail business operating income in 2005 decreased
        by€28 million (3.5%) compared to 2004, mainly
        caused by Mail Netherlands. The €28 million decline however, was
        affected by a net positive one-off effect of €9 million in 2004 from
        a settlement of future wage guarantees and various social measures including
        social and pension contributions, and€ 10
        million restructuring costs in 2005.
        The decline in operating income was caused by increased pension costs
        (€80 million) due to changes in key assumptions used, such as discount
        rate and attrition rates, and a €18 million salary cost increase,
        due to the unwinding of the contract regarding a liability for future
        wage guarantees, both at the end of 2004. This decline was partly offset
        by our continued progress in improving productivity and cost control,
        mainly driven by our cost flexibility programme, which delivered additional
        savings of approximately €89 million in 2005, adding up to €234
        million in estimated aggregated savings from the start of the programme
        in 2002.
      The results from acquisitions and disposals made in 2004
        and 2005 were approximately neutral to the overall change in operating
        income.
In 2005, overall operating income of our mail division
        as a percentage of its operating revenues decreased to 19.6% compared
        to 20.8% in 2004.
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| | DISCONTINUED
        OPERATIONS | | | CHAPTER
        5
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| | Trust
        and 
        empowerment make 
        TNT a great company.
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| 
| 
| 

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|CHAPTER
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| | TNT
      EXPRESS HONG KONG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
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| | Angela
      is one of those people you cant help but respect. Not the largest
      of people, she more than makes up for her stature through her intellect
      and drive. Add her energy and enthusiasm, sparked especially through conversations
      about her job, and you know why clients and staff alike are keen to work
      with her. Last year, she was one of only nine to receive the TNT Express
      Corporate Exceptional Behaviour Award. This is her first job after graduating
      from university in Canada. She must have had some good professors as shes
      making waves in Hong Kong already. Expect much from Angela.                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | Angela: Always
        say thank you. Always stay in touch with your network. And always, always
        trust yourself. It sounds simple, but in the relatively short time that
        Ive been working its certainly paid off for me. I think the
        trust yourself is probably the most important, especially
        with the variety I am faced with in my position. When I was promoted to
        Special Services Manager two years ago, my boss told me that I was going
        to have the most dynamic job within TNT. I have certainly not been disappointed.
      Special Services
        lives up to its name. Each of our products is interesting and demands
        a new approach. Ive sent out life-saving medical consignments via
        on-board courier and recently I was responsible for 32 sedan racing cars
        arriving safely from Australia to Shanghai for the Shanghai V8 Supercars
        Championship. I had to charter two 747 freighters for that one! Each enquiry
        requires you to think, think fast, and to create new options. |  | In my humble
        opinion, I think Ive got the best job in TNT! Special Services
        adds that extra bit of flavour to the TNT product range. Everything
        I do calls
        for that additional effort, huge creativity and somehow making maximum
        use of the resources we have at our disposal to meet the wishes of our
        clients. And they can be demanding, believe me!
      Several people
        have asked me why I am still at TNT. Surely, they say, you need to expand
        your horizons and discover whats out there while youre still
        young. The thing is - I dont want to! TNT gives me every possible
        freedom to develop myself. TNT management trusts that their employees
        have good intentions and that they will invest their best for the company.
        Of course, not everything goes right first time. But if you put in the
        effort, the rewards are there. Empowerment works.
      ANGELA CHIUTNT Express Hong Kong,
        Special Services Manager 32 years old, married | 
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|CHAPTER 5 | | | DISCONTINUED OPERATIONS | 48
|--------- | - | ----------------------- | --
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|On 6 December 2005 we announced a strategy
          to focus on our core competency of providing delivery services by expertly
          managing delivery networks and our intention of selling the logistics
          business. On 23 August 2006 we announced that we have signed a Sale
          and Purchase Agreement on the sale of the logistics business. On 4
          November
          2006 we completed the sale of the logistics division to affiliates
          of Apollo Management L.P. As is customary in transactions of this nature,
          we gave warranties and indemnities and, subject to certain exceptions,
          have agreed not to engage in the contract logistics business. On 30
          October
          2006 we announced the decision to divest our freight management business.
          On 16 November 2006 we signed a Sale and Purchase Agreement to sell
          our freight management business unit to the French logistics service
          provider
          Geodis SA. On 5 February 2007 we completed the sale. The total net
          proceeds are approximately €450 million. The book gain of the transaction
          is expected to be approximately €190 million. We have given warranties
          and indemnities which are customary for transactions of this nature.
          The Share Purchase Agreement also includes certain restrictions for
    TNT to compete with activities carried out by freight management.
    We refer to Note 8 of our consolidated financial statements
    for further information on the sale of logistics and freight management.
    Our logistics division was reported as discontinued operations/
    assets held for sale as at 31 December 2005. In our statement |  | of income for 2006, 2005 and 2004 we have presented
          the net result of our discontinued logistics business on a separate
          line Profit/(loss)
    from discontinued operations.
    Our freight management business is also reported as discontinued
        operations/assets held for sale. Consequently, in our statement of income
        for 2006, 2005 and 2004 we have presented the net result of our discontinued
        freight management business on a separate line Profit/(loss) from
        discontinued operations. We have restated the comparative figures
        for the 2005 and 2004 statements of income and cash flow to reflect the
    presentation of the freight management business as a discontinued operation.
    FINANCIAL REVIEW
    The condensed financial review shown hereafter, relates
        to both the logistics business and freight management business. The review
        will briefly focus on the statements of income and cash flow statements.
        It should be noted that the 2006 figures for the logistics business are
        as of and through 4 November 2006 (10 months) and are therefore not fully
    comparable to 2005 (12 months).
      COMBINED STATEMENTS OF INCOMEThe combined statements of income relate to the discontinued
    operations for our logistics and freight management businesses.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                     | Year ended at 31 December |  
|---------------------------------------------------- | ------------------------- | -
|                                                     |                           |  
|COMBINED STATEMENTS OF INCOME                        | 2006                      |  
|                                                     |                           |  
|                                                     | US$                       |  
|                                                     |                           |  
|Total operating revenues                             | 4,985                     |  
|                                                     |                           |  
|Other income                                         | (32                       | )
|                                                     |                           |  
|Cost of materials                                    | (282                      | )
|                                                     |                           |  
|Work contracted out and other external expenses      | (2,874                    | )
|                                                     |                           |  
|Salaries, pensions and social security contributions | (1,325                    | )
|                                                     |                           |  
|Depreciation, amortisation and impairments           | (18                       | )
|                                                     |                           |  
|Other operating expenses                             | (382                      | )
|                                                     |                           |  
|Total operating expenses                             | (4,881                    | )
|                                                     |                           |  
|Total operating income                               | 72                        |  
|                                                     |                           |  
|Net financial (expense)/income                       | (83                       | )
|                                                     |                           |  
|Results from investments in associates               | (59                       | )
|                                                     |                           |  
|Income taxes                                         | (22                       | )
|                                                     |                           |  
|Profit/(loss) for the year                           | (92                       | )
|                                                     |                           |  
|Post-tax result disposal assets held for sale        | (115                      | )
|                                                     |                           |  
|Profit attributable to minority interests            |                           |  
|                                                     |                           |  
|Profit/(loss) from discontinued operations           | (207                      | )
|                                                     |                           |  
|Attributable to:                                     |                           |  
|                                                     |                           |  
|Logistics business                                   | (202                      | )
|                                                     |                           |  
|Freight management business                          | (5                        | )
|                                                     |                           |  
|(in millions)                                        |                           |  

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            ANNUAL REPORT AND FORM 20-F

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|49 | DISCONTINUED OPERATIONS | | | CHAPTER 5
|-- | ----------------------- | - | ---------
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|DISCONTINUED OPERATING REVENUESIt should be noted that the 2006 figures for
        the logistics business are as of and through 4 November 2006 (10 months)
        and are therefore not fully comparable to 2005 (12 months). |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 



|                                | Year ended at 31 December | 
|------------------------------- | ------------------------- | 
|                                |                           | 
|DISCONTINUED OPERATING REVENUES | 2006                      | 
|                                |                           | 
|                                | US$                       | 
|                                |                           | 
|Logistics business              | 3,871                     | 
|                                |                           | 
|Freight management business     | 1,114                     | 
|                                |                           | 
|Total operating revenues        | 4,985                     | 
|                                |                           | 
|(in millions)                   |                           | 

|LogisticsOn a full year basis the 2006 revenues of our
        discontinued logistics business would be expected to have increased compared
        to 2005, mainly driven by increases in Italy and new sales contracts
        in China, South America, South East Asia and Australia. The increase
        in Italy is largely attributed to higher production across Fiats
        manufacturing facilities.
        In 2005 the revenues of the discontinued logistics
            business decreased by €25 million (0.7%) compared to 2004. The
            decrease was primarily due to contract terminations and lower volumes
            in Europe and due to the sale of our French operations in the fourth
            quarter of 2005. This was partly offset by a positive foreign exchange
            effect caused by the depreciation of the euro against other currencies.
        Freight managementIn 2006, revenue increased by €55 million
      (7%) compared to |  | 2005. This predominantly relates to increased revenues
            generated in the Nordics (Sweden).
        In 2005 operating revenues grew organically in all
            regions with the exception of the Americas. Growth in both air and
            ocean volumes contributed to the increase in operating revenues.
            The revenues from freight management Europe were positively influenced
            by new business. The revenues from freight management Americas were
            negatively influenced by the loss of one customer in North America
            and negative foreign exchange effects in South America.

      DISCONTINUED OPERATING EXPENSESIt should be noted that the 2006 figures for the logistics
        business are as of and through 4 November 2006 (10 months) and are therefore
        not fully comparable to 2005 (12 months).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                      | Year ended at 31 December |  
|------------------------------------- | ------------------------- | -
|                                      |                           |  
|DISCONTINUED
      OPERATING EXPENSES | 2006                      |  
|                                      |                           |  
|                                      | US$                       |  
|                                      |                           |  
|Logistics business                    | (3,783                    | )
|                                      |                           |  
|Freight management business           | (1,098                    | )
|                                      |                           |  
|Total operating expenses              | (4,881                    | )
|                                      |                           |  
|(in millions)                         |                           |  

|LogisticsOn a full year basis, the operating expenses
      for the discontinued logistics business would be expected to have increased
      compared to 2005. Operating expenses increased due to the higher business
      activities and certain non-recurring charges relating to the sale of our
      logistics business.
      In 2005 operating expenses increased by €27 million
          compared to 2004. This is significantly influenced by €18 million
          restructuring costs and €3 million impairment charges in France.
      Freight managementIn 2006 operating expenses were €54 million
        higher than 2005. This largely relates to the increase in work contracted
        out as a consequence of the increase in revenue. As a percentage of revenue
    these costs have increased marginally from 2005. |  | Salaries have increased due to new business and for
          improvements in Finance and Corporate sustainability. Amortisation
          expenses have reduced due to the former trademark being fully amortised
          in the fourth quarter of 2005.
      Freight management operating expenses have remained
    generally consistent as a percentage of revenues between 2005 and 2004.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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              ANNUAL REPORT AND FORM 20-F

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|CHAPTER 5 | | | DISCONTINUED OPERATIONS | 50
|--------- | - | ----------------------- | --
|         

|DISCONTINUED OPERATING INCOME AND PROFIT
    FOR THE YEAR
      LogisticsOn 4 November 2006 TNT completed the sale of
        the logistics division to affiliates of Apollo Management L.P. The total
        transaction value was €1,480 million on a cash and debt free basis.
        Taking into account deductions by the buyer for finance leases, pension
        and other employee benefits, and various costs for separation and rebranding,
        we received proceeds of €1,335 million, of which €15.5 million
        was received in the form of a 5% equity stake in Louis Topco Limited.In 2006 discontinued logistics operations resulted in an
        operating income of €43 million. Included in this income is a €35
        million loss in respect of a provision for onerous contracts. In the first
        quarter of 2006 the remainder of our French operations was sold to the
        French cargo transport operator Malherbe and Pierre-Michel Mendy/ Groupe
        Lapegue resulting in a total loss of €26 million, recorded in Other
        income. The loss in 2006 of €45 million on Result from
        investments in associates relates mainly to a €43 million asset
        impairment in respect of TNTs 20% equity interest in Global Automotive
        Logistics SAS.The post-tax transaction loss on disposal assets held for
        sale of the logistics business amounts to €87 million and includes |  | various deal related expenses and the portion of our
          cumulative translation adjustment that relates to our divested logistics
          business resulting in a charge of €12 million. For 2006 the total
          loss from discontinued operations related to the logistics business amounted
    to €153 million.
    The total amount of our results from discontinued logistics
        operations for 2005 includes the results of the sale of the majority
        of our French operations to Norbert Dentressangle and to Malherbe amounting
        to a loss of €102 million, pre-tax. The result of the sale was recorded
    in Other income.
    Freight managementIn 2006 profit decreased by €6 million compared
    to 2005. This largely relates to the costs associated with the sale of freight
    management.
    Due to the acquisition of our freight management business
        in August 2004, operating revenues and operating income for 2005 and
    2004 are not comparable.
      COMBINED CASH FLOW STATEMENTSIt should be noted that the 2006 figures for the logistics
        business are as of and through 4 November 2006 (10 months) and are therefore
        not fully comparable to 2005 (12 months).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                            | Year ended at 31 December |  
|------------------------------------------- | ------------------------- | -
|                                            |                           |  
|COMBINED CASH FLOW STATEMENTS               | 2006                      |  
|                                            |                           |  
|                                            | US$                       |  
|                                            |                           |  
|Net cash from operating activities          | (83                       | )
|                                            |                           |  
|Net cash used in investing activities       | (40                       | )
|                                            |                           |  
|Net cash used in financing activities       | 48                        |  
|                                            |                           |  
|Change in cash from discontinued operations | (75                       | )
|                                            |                           |  
|                                            |                           |  
|                                            |                           |  
|Cash at the beginning of the year           | 179                       |  
|                                            |                           |  
|Exchange rate differences                   | (3                        | )
|                                            |                           |  
|Change in cash from discontinued operations | (75                       | )
|                                            |                           |  
|Cash divested with sale Logistics business  | (63                       | )
|                                            |                           |  
|Cash at the end of the year                 | 38                        |  
|                                            |                           |  
|(in millions)                               |                           |  

|In 2006, the net cash from operating activities
          decreased compared to 2005 as a consequence of the loss from discontinued
    operation for our logistics business. |  | In 2005 net cash from operating activities was €225
        million lower compared to 2004, primarily due to the loss on disposal
        of the majority of our French operations and associated costs (€102
    million) combined with €44 million lower operating income.
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| | REPORT OF THE SUPERVISORY BOARD | | | CHAPTER 6
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| | High
        levels of service, 
        good responsiveness 
        and pressure-resistant, 
        tough staff.
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|CHAPTER 6 | | | REPORT OF THE SUPERVISORY BOARD | 
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| | MOTOROLA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
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| | After over
      15 years as a TNT client, Motorola in Germany uses all TNTs services
      except mail and with a focus on express road and air. Motorolas late
      night pick-up requirements from its distribution centre, frequently after
      10 p.m., mean it needs a reliable transport company that guarantees next-day
      deliveries throughout Central Europe. Only TNT meets this demand.                                                                                                                                                                                                                                                                                                                                                                                                                            | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | John Andersen: TNTs
        service with respect to late pick-ups and speed of next-day delivery in
        Central Europe is unmatched by any of its competitors. We need that kind
        of service and commitment in that important market. At the moment, there
        is no other supplier that offers that option. We perform reviews of all
        available suppliers each year so we know what we are talking about. While
        we also use other partners for our global transport requirements 
        TNT serves us primarily in Central Europe  we are certainly satisfied
        with our relationship with TNT. We would not have had such a long relationship
        with them if we were not. The level of service is high and the staffs
        responsiveness in the event of problems is excellent. |  | The transport
        market is not an easy one these days, with increasing competition from
        so many sources. Yet TNT has proven to be tough and resilient to market
        pressures.
      While possible areas
        of improvement include price and pro-activeness in unbidden suggestions
        for contract optimisation, Mr. Andersen is particularly pleased with the
        personal contact with TNTs personnel: An area where TNT scores
        highly in my books is its staff. Personal contact is important in any
        business relationship as this is the area where we can push and assist
        people in getting the things we need done. And TNT staff is certainly
        not fazed by setbacks. We accept that there are situations in which suppliers
        feel unable to meet clients demands and have to simply say no.
        And thats okay. Yet TNT always invests efforts to find a solution
        to any issue that arises.
      MR JOHN ANDERSENDirector Logistics
        EMEA
        Integrated Supply Chain | 
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|51 |  |  | CHAPTER 6
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|CHAPTER 6 | | | REPORT OF THE SUPERVISORY BOARD | 52
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|         

|COMPOSITION SUPERVISORY BOARDThe composition of the Supervisory Board changed in
            2006. Mr. R. King was appointed by the general meeting of shareholders
            on 20 April 2006 as a new member of the Supervisory Board. His knowledge
    and expertise in Asia are of great value to TNT.Both Mr. J.M.T. Cochrane and Mr. R.W.H. Stomberg were reappointed
    by the general meeting of shareholders for an additional four year term.As per the close of the annual general meeting of shareholders
        of 20 April 2007 the terms of Mr. R. Dahan, Mr. V. Halberstadt and Mr.
        W. Kok will expire; all three members are available for reappointment
    and have the support of the central works council.
    Mr. J.M.T. Cochrane, will resign as per 31 July 2007.
        Mr. Cochrane has been a Supervisory Board member since the demerger of
        TNT in 1988. The Supervisory Board is gratefull for his advice and wisdom,
        and his dedication over the years. The Supervisory Board will propose
        to the annual general meeting of shareholders to appoint Mrs. M. Harris,
        former partner of McKinsey & Company, as a new member of the Supervisory
    Board.
      COMPOSITION COMMITTEESThere were no changes to the composition of the committees
        in 2006. For an overview of the current composition of the committees,
    see page 59.
      INDUCTIONThe new member of the Supervisory Board, Mr. King,
          attended a full-day induction programme in June. Senior corporate directors
          went through the strategic, financial, legal and reporting affairs
          of TNT with Mr. King.
      MEETINGS OF THE SUPERVISORY BOARDIn 2006, the Supervisory Board held nine meetings with
        the Board of Management. The Supervisory Board also held five evening
        meetings, of which two were attended by the full Board of Management
        and three by the CEO only. Four of the evening meetings were concluded
        by private sessions of the Supervisory Board with no members of the Board
        of Management present. The chairman had frequent meetings with the CEO,
        and from time to time with other members of the Board of Management,
      in between the Supervisory Board meetings.
    The Supervisory Board also held three meetings by telephone.
        Most meetings were attended by the full Supervisory Board. There was
      no frequent absence of any of the members of the Supervisory Board.
    In February 2006, the Supervisory Board approved the amendment
        of our articles of association involving a decrease of our authorised
        capital and several technical amendments and approved the agenda for
        the extraordinary general meeting of shareholders held on 27 February
      2006.
    At the end of February 2006, the Supervisory Board discussed
        our 2005 financial statements and approved the 2005 full year dividend.
        The Supervisory Board discussed the management letter by our auditors,
      PricewaterhouseCoopers Accountants |  | N.V., and the result of the assessment by
      the Board of  Management of the structure and operation of
    our internal risk management and control systems.
    The Supervisory Board discussed the new Fraud Prevention
        Policy and approved the revised TNT Business Principles and Whistleblower
        Policy. In the same meeting, the Supervisory Board approved the 2005
        social responsibility report. The cancellation of shares purchased by
        TNT under the repurchase program announced on 6 December 2005 and the
        agenda for our annual general meeting of shareholders on 20 April 2006
    were also approved.
    In May, the Supervisory Board furthermore discussed the
        2006 first quarter results. The Supervisory Board also reviewed an update
        on contingency plans for pandemic and avian influenza. Jointly with the
        Board of Management, the Supervisory Board visited several operational
        sites of the mail business in June, including a printing facility of
        Cendris (Leidschendam, the Netherlands), a mail sorting centre (Leidschendam)
        and a mail distribution facility (The Hague, the Netherlands), and was
        briefed by local management on the processes. The Supervisory Board also
        held the annual strategy meeting together with the Board of Management,
        reviewing in particular the business strategies of the Mail and Express
    divisions.
    In July, the 2006 second quarter results and the half-year
        management letter by PricewaterhouseCoopers were discussed, and the Supervisory
        Board approved the 2006 interim dividend. In October, the 2006 third
        quarter results were discussed. The Supervisory Board also discussed
        an elaborate update on the structure and status of risk management, internal
        controls, integrity and compliance within TNT. In October and November,
        the Supervisory Board discussed new commercial and cost saving initiatives
        for the Dutch mail operations in response to changing market dynamics
    from increased competition and substitution.
    In December 2006, the Supervisory Board discussed the
        2007 budget plan with the Board of Management. The Supervisory Board
        also reviewed the companys talent management and succession planning.
        In the December evening meeting, the Supervisory Board evaluated with
        the CEO the functioning of the Board of Management and its individual
        members as well as the feed back by the Board of Management of the relationship
        with the Supervisory Board. Subsequently, the Supervisory Board discussed
        in a private session the functioning of the CEO and, based on an elaborate
        self-assessment, its own functioning and functioning of the committees,
        the performance of its individual members and its profile, composition
    and competence.
    Implementation of Focus on NetworksDuring
        the year 2006, the Supervisory Board spent ample time reviewing and monitoring
        the progress on the implementation of the
        refined strategy Focus on Networks, announced on 6 December
        2005. This strategy encompasses focus on the core competency of providing
        delivery services by managing transport networks, the intended divestment
    of the logistics business and a more optimal capital structure.
    The Supervisory Board allocated considerable time in meetings
        in March, May, June, and July to discuss the process of the controlled
        auction of the logistics business. In these meetings, the Supervisory
        Board reviewed and evaluated, amongst others, the selection of the investment
    bank advising TNT on the sales
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|53 | REPORT OF THE SUPERVISORY BOARD | | | CHAPTER 6
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|process, the profiles of the bidders, the bid prices,
          the finance capacities of the bidders and the comments on contractual
          documentation. Particular attention was paid to review the commitments
          by bidders relating to the employees and relating to the continuation
          of the business as a whole. In August, the Supervisory Board held two
          conference calls to approve the finalization of the negotiations with
          the final buyer Apollo, and to approve the agenda for the extraordinary
          general meeting of shareholders on 29 September. In October, the Supervisory
          Board was briefed about the progress on the completion process of the
    transaction. Completion of the transaction took place on 4 November.
      The Supervisory Board thanks the management and employees
      of the logistics business for their dedication and commitment during the
      sales process and wishes them success in the future under the new name
    CEVA Logistics.
    In view of Focus on Networks, the Supervisory
        Board reviewed various proposed growth initiatives. In February, the
        Supervisory Board approved the purchase of two new Boeing 747-400ERF
        freighters which will connect Asia and Europe. For the acquisition of
        the Chinese freight and parcels company Hoau, the Supervisory Board approved
        in February the signing of the framework agreement and in September the
        signing of the equity transfer agreement. In May, the Supervisory Board
        approved the acquisition of Speedage, an Indian domestic road express
        operator. After a first review in July, the Supervisory Board approved
        in October the acquisition of Mercurio, a Brazilian domestic road express
      operator.In May, the Supervisory Board reviewed and
      approved the proposal to simplify the group head office structure with
      a view to reducing
      overhead costs by €75 million.
    In May and October, the Supervisory Board discussed the
        position of the freight management business leading to the announcement
        to divest in October and, after approval by the Supervisory Board, the
        signing of the share purchase agreement with the French based logistics
        service provider Geodis in November 2006. Completion of this transaction
        took place on 5 February 2007. The Supervisory Board would also like
        to wish employees and staff active in freight management all success
      in the future.
    In May and June, the Supervisory Board discussed optimisation
        of our capital structure, and approved proposals for allocation of funds
        to growth initiatives and share buy back programmes. During the year
        the Supervisory Board reviewed TNTs contingency plans for pandemic
      and avian flu and other risks potentially impacting operations.
    The StateIn November 2006,
        the State of the Netherlands sold all of its shares in TNT, representing
        10.9% in TNTs share capital.
        The State also agreed to transfer its special share to TNT for free and
        to terminate the special control rights and the other arrangements that
        were related to the States shareholding. As a consequence hereof,
        the States capacity as shareholder in TNT has come to an end. The
        Supervisory Board is grateful to the State of the Netherlands for the
      constructive relationship over the years.
      MEETINGS OF THE COMMITTEESIn 2006, the audit committee met seven times. All meetings
      were attended by the CEO, CFO, internal auditor and external |  | auditor. On a quarterly basis, the audit
          committee held individual private conversations with the CEO, CFO,
          internal auditor and external auditor. The audit committee discussed
          the full
          year 2005 and half-yearly 2006 management letters as well as our 2005
          annual results and the 2006 first quarter, half year and third quarter
          results with our external auditor PricewaterhouseCoopers. It also reviewed
          press releases and analyst presentations related thereto. The audit
          committee also reviewed compliance with our Auditor Independence Policy
          and reviewed
          the reports by our internal auditors. The audit committee reviewed
          the TNT Reserves- and Dividend Guidelines and proposals for full year
          dividend
    2005 and interim dividend 2006.
      In February and July, the audit committee reviewed our internal
        control mechanisms and risk management processes. During the year the audit
        committee was updated about the progress of implementing of the requirements
        under Section 404 of the Sarbanes-Oxley Act. Regular updates were also
        given on integrity matters. The Audit Committee reviewed the revised TNT
        Business Principles and Whistleblower Policy and the TNT Fraud Prevention
        Policy. The audit plan 2006 was discussed with PricewaterhouseCoopers and
        the audit fee proposal for 2006 approved. In December the audit committee
    reviewed the budget plan 2007 and internal audit plan 2007.
    As previously disclosed, since August 2004, the company
        has been preparing an addendum to our original report to the UK tax authorities
        that covers other UK tax matters that were not the subject of the original
        investigation, and have been separately investigating the tax position
        of certain non-UK subsidiaries. As announced in September 2005, the investigations
        revealed the likelihood of illegal acts relating to certain past tax
        matters. On behalf of the Supervisory Board, the audit committee was
        asked to oversee these investigations. The audit committee retained an
        independent law firm, Gibson, Dunn & Crutcher LLP, to assist the audit
        committee in conducting a full, independent investigation and appointed
      Mr. Kooijman and Mr. Der Kinderen to lead the work on their behalf.
    In February 2006, the audit committee discussed the Gibson
        and Dunns report with respect to the investigation into whether
        illegal acts occurred at TNT, and the responsibility for such acts, in
        connection with certain past tax matters. The investigation determined
        that some illegal acts had taken place. The investigation further concluded
        that the integrity of present and past members of the Board of Management
        and current senior staff, reporting to the Board of Management, was not
      in doubt.
      The independent counsel, the audit committee and the
        Supervisory Board discussed several remedial recommendations of the independent
        counsel, including strengthening of controls and procedures and financial
        and tax staffing. The CEO was briefed by the chairman of the Supervisory
        Board and the chairman of the audit committee, as well as subsequently
        by the independent counsel on the results of the investigation, including
        staffing assessments and the remedial recommendations. TNTs external
        auditor, PricewaterhouseCoopers Accountants N.V., was also briefed on
        the investigation in detail by the independent counsel. PricewaterhouseCoopers
        subsequently discussed those results with the audit committee and Supervisory
        Board and supported the remedial actions. The Board of Management endorsed
        the
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|CHAPTER 6 | | | REPORT OF THE SUPERVISORY BOARD | 54
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|remedial actions, which were implemented in the course
        of 2006 under the supervision of the Supervisory Board.
      During the year the audit committee discussed with Mr.
        Kooijman the progress of the negotiations with various tax authorities
        and the effect on the estimated realistic range of contingent tax liabilities.
        On 20 April 2006, TNT announced that the estimated realistic range of
        its contingent tax liability reduced from between €150 million
        and €550 million, as disclosed in TNTs annual report
        for 2005, to between €100 million and €250 million,
        which TNT continues to believe to reflect the realistic range of the contingent
        liability.
      In 2006, the remuneration committee held five meetings
        including one meeting held by telephone. Early in the year, the remuneration
        committee discussed the amendments to the remuneration policy for the
        Board of Management, which amendments were adopted by the general meeting
        of shareholders on 20 April 2006. In mid-2006, the committee reviewed
        the proposal for the discretionary bonus incentive for Mr. Kulik regarding
        the sale of Logistics. In the second half of the year, the proposed amendments
        to the remuneration policy for 2007 were discussed, including the pension
        arrangements for the Dutch members of the Board of Management as well
        as some amendments to the long term equity plan.
      The nominations committee held three meetings in 2006.
        In January 2006, the committee discussed the list of potential candidates
        for the new vacancy for a member with Asian experience. In July and December,
        the nominations committee reviewed the Supervisory Board profile, composition
        and rotation plan. Also the profiles of the senior corporate directors
        at group head office were discussed. Special attention was paid to Human
        Resources and Legal Affairs.
      The public affairs committee met three times in 2006.
        The committee discussed national postal regulatory developments, including
        the proposed new Dutch postal law, and the status and various related
        subjects of European postal liberalisation. The public affairs committee
        reviewed our 2005 social responsibility report and the work plan for the
        2006 social responsibility report. In the second half of 2006, the committee
        reviewed the new commercial and cost saving initiatives for the Dutch
        mail operations.
      Each committee reported its findings and conclusions
        on a regular basis, both verbally and in writing, to the full Supervisory
        Board. Minutes of the audit committee meetings were prepared over-night,
        being available in draft to the full Supervisory Board the next morning
        prior to the regular Supervisory Board meeting.
      Each Supervisory Board members year of birth, current
        and former positions, number of shares and other supervisory board memberships
        held are presented in chapter 7. Also listed are the date and term of
        first appointment, current term of office and memberships of Supervisory
        Board committees.
      INDEPENDENCE OF MEMBERS OF THE SUPERVISORY
        BOARDThe Supervisory Board confirms that all members of the
        Supervisory Board are independent in the sense of best |                                                                                                                                                                         | practice provision III.2.2 of the Dutch corporate
      governance code. This means that none of the members of the Supervisory
      Board (or any partner or close relative):
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|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | has been an employee or member of the Board
      of Management of our company in the five years prior to appointment,                                                 
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | receives personal financial compensation from
      our company or an associated company other than the compensation received
      as member of the Supervisory Board,
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | has had an important business relationship
      with our company or a company associated with it, in the year prior to the
      appointment,                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | is a member of the management board of a company
      in which a member of the Board of Management is a member of the supervisory
      board,                        
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | holds at least 10% of the shares in our company,                                                                                                                       
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | is a member of the management board or supervisory
      board of a legal entity that holds at least 10% of our shares, or                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | has temporarily managed our company during
      the previous 12 months.                                                                                               
|COMPLIANCEThe Supervisory Board confirms that in
        2006 no decisions were taken by the Supervisory Board that did not comply
        with its by- laws.
      REMUNERATION POLICYFor the remuneration policy for members
        of the Board of Management see chapter 8; for the remuneration of members
        of the Board of Management and the Supervisory Board over 2006, see note
        19 to the consolidated financial statements.
      FINANCIAL STATEMENTSThis annual report and the 2006 consolidated financial
        statements, audited by PricewaterhouseCoopers Accountants N.V., were presented
        to the Supervisory Board in the presence of the Board of Management and
        the external auditor.PricewaterhouseCoopers report can be found on page
        103.
      The Supervisory Board recommends that the general meeting
        of shareholders adopts the 2006 consolidated financial statements of TNT.
        The annual general meeting of shareholders will be asked to release the
        members of the Board of Management from liability for the exercise of
        the management of the companys affairs and management. The appropriation
        of profit approved by the Supervisory Board can be found on page 178.
      Subject to adoption of the financial statements, a final
        dividend of €0.73 per ordinary share of €0.48 nominal value
        will be paid in respect of the 2006 financial year. An interim dividend
        of €0.26 has already been paid in 2006, so the total
        dividend per ordinary share in respect of 2006 will be €0.47.
      The Supervisory Board wishes to thank the Board of Management
        and all employees of TNT for their outstanding contributions in 2006.
      Supervisory Board Amsterdam, 26 February 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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| | CORPORATE GOVERNANCE | | | CHAPTER 7
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| | We appreciate
        TNTs 
        entrepreneurial spirit in 
        entering a new market 
        and the resulting market 
        competition.
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|CHAPTER 7 | | | CORPORATE GOVERNANCE | 
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| | OTTO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
| | With a
      history of cooperation between OTTO, a wholly-owned subsidiary of the Otto
      Group, and TNT Express dating back decades, the company has been using TNT
      in Germany for its sub-1000 grams catalogue delivery for some 4 years. Leveraging
      the synergies of the joint venture between its own delivery operation Hermes
      Logistik Gruppe and TNT Posts Germany-wide coverage, OTTO and TNT
      Post are together setting up new profiles and services in other domains.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
| | Dirk Hassenstein:
        In selecting TNT Post, it was important for us that we were able
        to create options comparable to the freight market for catalogue carriage
        under 1000 grams and the delivery of letters. TNT was one of the first
        organisations to cover the whole of Germany with high delivery quality
        and the capacity to satisfy our specific needs for high frequency, short
        timeframes and high circulation. At OTTO, we also appreciate the fact
        that TNT Post was prepared to enter a new market after years of monopoly
        by Deutsche Post. A reflection of our own organisation, we admire
        this
        entrepreneurial spirit as well as the resulting market competition. Of
        course, being a global operator ourselves, an added bonus is the fact
        that we can make use of an existing relationship and global services
        to
        meet the needs of our clients worldwide. |  | One of the highpoints
        of our relationship is that with the TNT Post staff themselves. We have
        found them very open-minded to our demands and needs. We are working together
        with great dedication and know-how to build up the structures required
        for delivering our letters and catalogues. This is a huge challenge. With
        the current 70% coverage, we have not yet met all our objectives, specifically
        those of geographic stability and stability over time. Yet we are continuously
        evaluating and aligning our targets and are convinced we will meet them
        in the near future. TNT Post has already shown that they are willing to
        put in the effort and that they are now a real alternative to Deutsche
        Post.
      One more thing.
        We believe that since TNT has sold its Logistics division, it has the
        opportunity to become a leading market player and accordingly we applaud
        the sale. It has convinced us that TNT is serious about the German market.
        We are confident that TNT Post will live up to its promise of developing
        a first class nationwide distribution network and look forward to a long-term
        relationship.
      MR DIRK HASSENSTEINCatalogue Dispatch
        Division Manager 
        Otto GmbH & Co KG | 
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|CHAPTER 7 | | | CORPORATE GOVERNANCE | 56
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|GENERAL
      Pursuant to the Enabling Act as currently in force,
          we are subject to the full Dutch large company regime. Under these
          rules, we are required to adopt a two-tier system of corporate governance,
          comprising a board of management and a supervisory board.
      In the two-tier corporate structure, the executive management
          is entrusted to the Board of Management under the supervision of the
          independent Supervisory Board. Both the Supervisory Board and the Board
          of Management are accountable to the general meeting of shareholders
          for the performance of their duties.
      BOARD OF MANAGEMENT
      Our company is managed by a Board of Management, which
          is responsible for the management of our company, our overall results,
          as well as our companys mission, vision and strategy. At present,
          our Board of Management consists of four members: a chief executive
          officer, a chief financial officer and two group managing directors.
          The management from each of our divisions is responsible for the day-to-day
          business decisions, jointly with the divisional management boards,
          and for the development and execution of the business strategy of the
          division within the framework set by our corporate strategy.
      Our Board of Management is firmly committed to managing
          our company in a structured and transparent fashion. Our aim is to
          provide stakeholders with a clear view on corporate decisions and decision-making
          processes. We have a divisional structure across countries and regions.
          Value-based management provides us with an additional framework for
          forward-looking management of the company based on objective criteria.
      Our reporting structure is in line with the management
          structure of the two divisions, and our corporate legal structure has
          largely been brought in line with our reporting structure. Responsibility
          for the design. implementation and the effectiveness of business controls
          lies with management. The effectiveness of our business controls is
          measured by management review, management self-assessment and internal
          audits conducted by our corporate audit services department. Management
          of designated business activities as well as the corporate audit services
          department report on the effectiveness of internal control over financial
          reporting and other operational controls to the Board of Management
          and the audit committee of the Supervisory Board.
      In performing its duties, the Board of Management acts
          in accordance with the interests of our company and the business connected
          with it and, to that end, is required to consider all appropriate interests
          associated with our company. The Board of Management must in due time
          provide the Supervisory Board with all information necessary for the
          proper performance of its duties. In addition, the Board of Management
          is required to provide the necessary means, allowing the Supervisory
    Board and its individual members to |  | obtain all information which is necessary
          for them to be able to function as a supervisory body of our company.
          In its communication with the Supervisory Board the Board of Management
          supports full transparency.
      Our Board of Management is responsible for complying
          with all relevant legislation and regulations, for managing the risks
          associated with our companys activities, for our financing and
          external communication. Our Board of Management is required to report
          related developments to, and discusses the internal risk management
          and control systems with our Supervisory Board and its audit committee.
      Representative authority, including with respect to
          the signing of documents, is vested in at least two members of the
          Board of Management acting jointly, as well as any other officers of
          our company as our Board of Management may appoint, subject to any
          restrictions imposed. The chief executive officer may exercise representative
          authority and sign documents in his individual capacity.
      Under the full large company regime, members of the
          Board of Management are appointed and can be suspended or dismissed
          by the Supervisory Board. The decision of the Supervisory Board to
          dismiss a member of the Board of Management can only be taken after
          the general meeting of shareholders has been consulted on the intended
          dismissal. Under these rules the Supervisory Board must, furthermore,
          approve certain resolutions by the Board of Management.
      Share ownership is not required to qualify as a member
          of the Board of Management.
      Our Board of Management has formed two committees to
          aid compliance with applicable corporate governance requirements: the
          disclosure committee and the ethics committee.
      The disclosure committee advises and assists our Board
        of Management to ensure that our disclosures in all filed reports are
        accurate, complete, timely and understandable and that they fairly present
        the condition of the company in all material respects.
      The ethics committee is appointed by the Board of Management
          to advise and assist in developing and implementing policies and procedures
          aimed at enhancing integrity and ethical behaviour and preventing fraud
          throughout TNT worldwide and monitoring compliance thereof. The ethics
          committee oversees and coordinates investigations following the Whistleblower
          Procedure and/or the Fraud Prevention Procedure. The ethics committee
          reports regularly to our Board of Management and on a half-yearly basis
          to the Supervisory Board.
      The by-laws of the Board of Management, together with
          other information on each member of our Board of Management, and the
          terms of reference of both the disclosure committee and the ethics
    committee can be viewed on our website.
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|57 | CORPORATE GOVERNANCE | | | CHAPTER 7
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|MEMBERS BOARD OF MANAGEMENT
    M.P. (Peter) Bakker (1961)
    Chief Executive OfficerPeter Bakker has been chief executive officer (CEO)
          since 1 November 2001. He joined Royal TNT Post (then called PTT Post)
          in 1991 and was appointed financial director of its parcels business
          unit in 1993. He was appointed financial control director of TNT Post
          in 1996 and became a member of the board of management of TNT Post
          in 1997. Since the demerger of TNT N.V. (then called TPG) from Koninklijke
          PTT Nederland N.V. until his appointment as CEO, he was
          chief financial officer and a member of the TNT Board of Management.
          Before joining TNT Post, Mr. Bakker worked for TS Seeds Holdings.Shares owned: 30,079.
      C.H. (Henk) van Dalen (1952)
      Chief Financial OfficerHenk van Dalen has been chief financial officer (CFO)
          since 1 April 2006 and a member of the Board of Management since 20
          April 2006. He started his career at DSM N.V. in 1976 where he held
          various human resources and general management positions at DSM HR,
          DSM Agro, DSM Research and DSM Polyethylenes. From 2000 until March
          2006 Mr. Van Dalen was a member of the board of management and CFO
      of DSM N.V.Shares owned: 0.
      H.M. (Harry) Koorstra (1951)
        Group Managing Director
            MailHarry Koorstra has been Group Managing Director Mail
          and a member of the Board of Management since 1 July 2000. He joined
          TNT Post (then called PTT Post) in 1991 as managing director of its
          then Media Service business unit and became a member of its Board of
          Management in 1997. Before joining the company, Mr. Koorstra worked
          for 15 years at VNU N.V., most recently as general director of its
          Admedia/VNU Magazine Group.
        Shares owned: 18,133.
      M.C. (Marie-Christine) Lombard (1958)
        Group Managing
            Director ExpressMarie-Christine Lombard has been Group Managing Director
          Express and a member of the Board of Management since 1 January 2004.
          She joined Jet Services in France in 1993. Upon our acquisition of
          Jet Services in 1999, Mrs. Lombard joined TNT (then called TPG) as
          the managing director of the domestic express business and from March
          2001 until 1 January 2004 was managing director of our international
          express business in France.Shares owned: 7,741.
      The business address of all members of the Board ofManagement is TNT N.V., Neptunusstraat 41-63, Hoofddorp,
      2132 JA, the Netherlands.
      Mr. Bakker is a member of the advisory board of ABN
          AMRO Bank N.V. and a member of the board of Foundation Moving the World.
          Mr. Van Dalen is a member of the supervisory board of Macintosh Retail
          Group N.V. and NIBC Holding N.V. Furthermore, he is a board member
          of the Foundation for Responsible Entrepreneurship and the Nationaal
          Fonds 4 en 5 mei and a member of the board of advisors of AIESEC
    Nederland and Arthur D. Little Netherlands. Mr. Koorstra is |  | chairman of the supervisory
          board of Hermans Holding B.V. He is also member of the executive committee
          and general board of the Confederation of Netherlands Industry and
          Employers (VNO NCW). Mrs. Lombard is a member of the supervisory board
          of Royal Wessanen N.V.
      The members of our Board of Management have no board
          positions other than those reflected above.
      Mr. J. G. Haars resigned as member of the Board of Management and CFO as per 31 March 2006. Mr. D.G. Kulik
          resigned as member of the Board of Management upon the completion of
      the sale of logistics as per 4 November 2006.
      The total number of ordinary shares held by members
          of the Board of Management as of 26 February 2007 is 55,953, amounting
          to approximately 0.013% of the outstanding share capital.
      REMUNERATIONFor detailed information concerning the remuneration
          of our Board of Management, see the remuneration report in chapter
          8 and note 19 of the consolidated financial statements. The remuneration
          report, which includes the remuneration policy for our Board of Management,
          can also be viewed on our website. The remuneration policy was initially
          adopted at the annual general meeting of shareholders held on 7 April
          2004. Amendments to the remuneration policy were subsequently adopted
      at the annual general meetings of shareholders held in 2005 and 2006.
      SUPERVISORY BOARD
      The Supervisory Board is charged with supervising the
          policies of the Board of Management and the general course of affairs
          of the company and the business connected with it, as well as assisting
          the Board of Management by providing advice. The Supervisory Board
          evaluates the main organisational structure and the control mechanisms
          established under the management of the Board of Management. The responsibility
          for proper performance of its duties is vested in the Supervisory Board
          as a whole. Members of the Supervisory Board may take positions different
          from those of the Board of Management.
      In performing its duties the Supervisory Board is charged
          with acting in accordance with the interests of our company and its
          affiliated businesses. It shall take into account the relevant interest
          of the companys stakeholders, and, to that end, consider all
          appropriate interests associated with the company. Members of the Supervisory
          Board perform their duties without mandate and independent of any particular
          interest in the business of the company. They should not support one
          interest without regard to the other interests involved. Our Supervisory
          Board is responsible for the quality of its own performance.
      Share ownership is not required to qualify as a member
          of the Supervisory Board. Under the large company regime members of
          the Supervisory Board are appointed by the general meeting of shareholders
          following nomination by the Supervisory Board. The general meeting
    of shareholders can, furthermore, dismiss
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|the Supervisory Board as a whole by an absolute majority
          of the votes cast representing at least one third of the issued capital.
          For further details on the appointment and dismissal of (members of)
          the Supervisory Board see articles 28 and 29 of our articles of association.
      Our articles of association and the by-laws of the Supervisory
          Board, together with other information on each member of our Supervisory
          Board, can be viewed on our website.
      MEMBERS SUPERVISORY BOARDJ.H.M. (Jan) Hommen (1943)Mr. Hommen is chairman of the Supervisory Board since
          April 2005. He was appointed as a member of the Supervisory Board on
          28 June 1998; his current term as member of the Supervisory Board expires
          in 2009. Mr. Hommen was formerly vice-chairman of the board of management
          and chief financial officer of Royal Philips Electronics N.V. and executive
          vice-president and chief financial officer of the Aluminium Company
          of America (Alcoa). He is a member of the supervisory boards of Royal
          Ahold N.V., ING Group N.V. and Campina B.V., chairman of the supervisory
          boards of Reed Elsevier N.V. and the Academic Hospital of Maastricht
          and chairman of the board of directors of TiasNimbas Business School
      of Tilburg University.Shares owned: 0.
      R.J.N. (Robert) Abrahamsen (1938)Mr. Abrahamsen was appointed as a member of the Supervisory Board on 9 May 2000. His term expires in
          2008. Mr. Abrahamsen is chairman of the supervisory boards of Optimix
          Vermogensbeheer N.V. and Trans Link Systems. Mr. Abrahamsen is member
          of the supervisory boards of Fluor Daniel B.V., PON Holdings B.V.,
          Havenbedrijf Rotterdam B.V., ANP, Madurodam B.V., Royal BAM Group,
          Vitens N.V. and Bank Nederlandse Gemeenten. He is a former member of
          the management board and chief financial officer of KLM Royal Dutch
          Airlines N.V. and senior executive vice-president of ABN AMRO Bank
      N.V.Shares owned: 0.
      J.M.T. (James) Cochrane (1944)Mr. Cochrane is vice-chairman of the Supervisory Board
          since 2 November 2001. He was appointed as a member of the Supervisory
          Board on 28 June 1998. He was reappointed after the annual general
          meeting of shareholders held in 2006 for a term of four years to expire
          in 2010. Mr. Cochrane is chairman of NHS Innovations London and the
          British Red Cross. He is a former director of Wellcome plc, responsible
          for international operations, a former executive director of Glaxo
          Wellcome plc and a former chairman of the board of Avidex Ltd. and
      SW London Strategic Health Authority.Shares owned: 0.
      R. (René) Dahan (1941)Mr. Dahan was appointed as a member of the Supervisory
          Board on 1 April 2003. His term expires in 2007. Mr. Dahan will be
          nominated for reappointment at the annual general meeting of shareholders
          to be held on 20 April 2007. Mr. Dahan is chairman of the supervisory
          board of Royal Ahold N.V., a member of the supervisory boards of AEGON
          N.V., a member of the international advisory board of the Instituto
    de Empresa Business School in Madrid and a member of the |  | advisory board of the Guggenheim
          Group in New York. He was formerly executive vice-president and director
          of Exxon Mobil Corporation and held various positions with its subsidiaries.Shares owned: 0.
      V. (Victor) Halberstadt (1939)Mr. Halberstadt was appointed as a member of
        the Supervisory Board on 28 June 1998. His current term expires in 2007.
        Mr. Halberstadt will be nominated for reappointment at the annual general
        meeting of shareholders to be held on 20 April 20. Mr. Halberstadt is
        professor of public finance at Leiden University, international advisor
        of Goldman Sachs Group Inc., non-executive director of PA Holdings Ltd
        and a non-executive director of RHJ International. Furthermore, he is
        a member of the supervisory boards of Royal KPN N.V. and Concertgebouw
        N.V. Mr. Halberstadt previously served amongst others as president of
        the International Institute of Public Finance, Crown-member of the Social
        and Economic Council and chairman of the Daimler Chrysler international
        advisory board. 
        Shares owned: 0.
      G. (Giovanna) Kampouri Monnas (1955)Mrs. Kampouri Monnas was appointed as a member
        of the Supervisory Board on 7 April 2005. Her term expires in 2009. Mrs.
        Kampouri Monnas is a member of the supervisory board of Randstad Holding
        N.V. and member of the board of directors of Puig SL. Formerly, she was
        president of the international division and member of the executive committee
        of Johann Benckiser GmbH and held various positions at Procter & Gamble
        in Greece and the United States. Prior to this, Mrs. Kampouri Monnas
        was urban development consultant for the Greek Ministry of Economic Affairs.Shares owned: 0.
      R. (Roger) King (1940)Mr. King was appointed as a member of the Supervisory
        Board on 20 April 2006. Mr. King is non executive director of Arrow Electronics,
        Inc. (USA) and Orient Overseas International Limited (Hong Kong). He
        is a standing committee member of the Chinese Peoples Consultative
        Conference of Zhijiang Provincial Committee and serves on various business
        and community committees. Mr. King is Adjunct Professor at Hong Kong
        University of Science and Technology. He is former president and chief
        executive officer of Sa Sa International Holdings Limited, former chairman
        and chief executive officer of ODS System-Pro Holdings Limited (Hong
        Kong), part of the CY Tung Group of Companies, and was managing director
        and chief operating officer of Orient Overseas International Limited.Shares owned: 0.
      W. (Wim) Kok (1938)Mr. Kok was appointed as a member of the Supervisory
        Board on 1 April 2003. His term expires in 2007. Mr. Kok will be nominated
        for reappointment at the annual general meeting of shareholders to be
        held on 20 April 2007. Mr. Kok is a non-executive director of Royal Dutch
        Shell plc and member of the supervisory boards of ING Group N.V., KLM
        Royal Dutch Airlines N.V. and Stork N.V. Mr. Kok was formerly Prime Minister
        of the Netherlands, Minister of Finance, member of parliament, and chairman
        of the Confederation of Dutch Trade Unions and the European Trade Union
        Confederation.Shares owned: 0.
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|S. (Shemaya) Levy (1947)Mr. Levy was appointed as a member of the Supervisory
      Board on 7 April 2005. His term expires in 2009. Mr. Levy is a member of
      the supervisory boards of Nissan, Renault Spain, Safran, Segula Technologies
      and Aegon N.V. Formerly, Mr. Levy was chief executive officer of Renault
      Trucks and, subsequently, executive vice-president and chief financial
      officer of Renault Group.Shares owned: 0.
      R.W.H. (Rolf) Stomberg (1940)Mr. Stomberg was appointed as a member of the
        Supervisory Board on 28 June 1998. His current term expires in 2010.
        Mr. Stomberg is chairman of Management Consulting Group plc and a non
    executive director of Smith & Nephew plc, Reed |  | Elsevier N.V., Reed Elsevier
          plc and Severstal. Mr. Stomberg is also chairman of the supervisory
          boards of Lanxess AG and Francotyp-Postalia AG, a member of the supervisory
          boards of Deutsche BP AG and Biesterfeld AG and chairman of the advisory
          board of Hoyer GmbH. Mr. Stomberg was formerly a managing director
          of British Petroleum Company plc, chairman of John Mowlem & Co.
          plc and chairman of Unipoly S.A, non executive director of Cordiant
          Communications Group plc and member of the supervisory board of Scania
          AG.Shares owned: 0.
      The business address of all members of the Supervisory
    Board is TNT N.V., Neptunusstraat 41-63, Hoofddorp, 2132 JA, the Netherlands.
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ADDITIONAL SUPERVISORY BOARD INFORMATION

|                  
|------------------
|Name              
|                  
|J.H.M. Hommen     
|                  
|R.J.N. Abrahamsen 
|                  
|J.M.T. Cochrane   
|                  
|R. Dahan          
|                  
|V. Halberstadt    
|                  
|G. Kampouri Monnas
|                  
|R. King           
|                  
|W. Kok            
|                  
|S. Levy           
|                  
|R.W.H. Stomberg   
|                  
|



REMUNERATION The remuneration of the members of the Supervisory Board is
  comprised of base compensation and variable compensation linked to attendance
  of the meetings of the committees of the Supervisory Board. The members of the
  Supervisory Board do not receive any compensation related to performance and/or
  equity and do not accrue any pension rights with our company. The members of
  the Supervisory Board do not receive any severance payment in the event of termination.
  We do not grant loans to any member of our Supervisory Board. Supervisory Board
      
      Base feeChairman
      60,000Member
      45,000Committees
      
      Meeting feeAudit & Remuneration
      Chairman
      2,500Member
      1,500Nomination & Public Affairs
      Chairman
      1,500Member
      1,000(in €)




EXPERTISE AND COMPOSITION OF THE SUPERVISORY BOARD The Supervisory Board consists of a minimum of seven and a
  maximum of twelve members. The Supervisory Board determines the number of members.
  At present, our Supervisory Board has ten members.
    The Supervisory Board has prepared a profile of its size and composition,
    taking account of the nature of our business and activities and the desired
    expertise and background of the members of the Supervisory Board. The Supervisory
    Board evaluates the profile annually and discusses the profile with the general
    meeting of shareholders and our central works council and when any amendments
    to the profile are made. According to the by-laws and the profile of the Supervisory
    Board, a person may be appointed to the Supervisory Board for a maximum of
    three terms of four years. Our articles of association also provide that members
    of the Supervisory Board shall retire periodically in accordance with a rotation
    plan drawn up by the Supervisory Board in order to avoid, as far as possible,
    a situation in which many reappointments occur simultaneously. Both profile
    and rotation plan can be viewed on our website.


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|In accordance with the Dutch corporate governance code,
          it is the intention of the Supervisory Board that its members will
          not hold more than five memberships in supervisory boards of Dutch listed
          companies (including our company). In this respect, a chairmanship
          counts twice.
      Since Mr. Hommens election as chairman of our
          Supervisory Board, caused by unforeseen circumstances in 2005, the
          number of his board memberships is not in line with the Dutch corporate
          governance code. At the time Mr. Hommen committed himself to, in due
          course, reducing the total number of board memberships from six to
          the maximum of five allowed under the code. By not standing for re-election
          in 2007 as member of the supervisory board of Royal Ahold N.V. this
          matter will be resolved.
      There is an agreed procedure for members of the Supervisory
          Board to obtain independent professional advice at the companys
          expense, if so required.
      For a description of our Supervisory Boards activities
          in 2006, see the report of the Supervisory Board under chapter 6.
      CHAIRMAN AND CORPORATE SECRETARYThe chairman of our Supervisory Board determines
        the agenda and presides over meetings of our Supervisory Board. The chairman
        is responsible for the proper functioning of our Supervisory Board and
        its committees. Furthermore, the chairman arranges for the induction
        and training programme for the members of our Supervisory Board and initiates
        the evaluation of the performance of the members of our Supervisory Board
        and our Board of Management.
      The chairman of our Supervisory Board may not be a former
          member of our Board of Management.
      Our Supervisory Board is assisted by our corporate secretary.
          All members of the Supervisory Board have access to the advice and
          services of the corporate secretary, who is responsible for ensuring
          that Supervisory Board procedures are followed and that the Supervisory
          Board acts in accordance with its statutory obligations under the articles
          of association. The corporate secretary is appointed and dismissed
          by the Board of Management, after the approval of the Supervisory Board
          has been obtained. The corporate secretary is assisted by a deputy
          corporate secretary.
      At TNT, the corporate secretary has been appointed as
          secretary to the Board of Management and the Supervisory Board and
          as central officer for the purpose of the TNT Rules concerning Inside
          Information.
      COMMITTEES OF THE SUPERVISORY BOARDThe Supervisory Board has formed an audit committee,
        a remuneration committee, a nominations committee and a public affairs
        committee from among its members. The committees operate pursuant to
        terms of reference established by the Supervisory Board according to
        the rules and regulations of the Dutch corporate governance code. The
    terms of reference of these committees can be viewed on our website. |  | Audit committeeThe audit committee is charged with assisting
      the Supervisory Board in advising on and monitoring, inter alia, the integrity
      of our financial statements, our system of internal business control and
      risk management, our financing and finance related strategies and tax planning.
      The audit committee has the authority to retain independent advisors as
      it deems appropriate, and the company provides funding for advisors employed
      by the audit committee.
      The audit committee consists of at least three members.
          All members of the audit committee must be members of the Supervisory
          Board who are determined by the Supervisory Board to be independent
          within the meaning of its by-laws and the applicable corporate governance
          rules as discussed below. A member of the audit committee may not simultaneously
          serve on the audit committees of more than two other companies unless
          the Supervisory Board determines that this simultaneous service would
          not impair the ability of such member to serve effectively on the audit
          committee. The audit committee and the remuneration committee may not
          consist of the same members.
      Each member of the audit committee must be financially
        literate and at least one member of the audit committee must have accounting
        or related financial management expertise. At least one member of the
        audit committee must be a financial expert as defined by the SEC. The
        Supervisory Board has determined that Mr. Abrahamsen qualifies as audit
        committee financial expert as defined in Item 16A of Form 20-F.
      Remuneration committeeThe remuneration committee is appointed by
        the Supervisory Board to propose the remuneration of the individual members
        of the Board of Management for adoption by the Supervisory Board, and
        to propose a remuneration policy, including schemes under which rights
        on shares are granted, for members of the Board of Management and to
        prepare a proposal for the remuneration of the individual members of
        the Supervisory Board, both for adoption by the general meeting of shareholders.
        Furthermore, the remuneration committee discusses the allocation of rights
        to shares in the companys capital to other senior management of
        the company.
      Nominations committeeThe nominations committee is appointed by the
        Supervisory Board to draw up selection criteria and appointment procedures
        for members of the Supervisory Board and members of the Board of Management,
        to set up procedures to secure adequate succession of members of the
        Board of Management and the assessment of such candidates and to make
        proposals for nominations, appointments and reappointments. At least
        annually the size and composition of the Supervisory Board and the Board
        of Management and the functioning of the individual members is assessed
        by the Nomination Committee.
      Public affairs committeeThe public affairs committee is appointed by
        the Supervisory Board to act as a sounding board and advisory committee
        for the Board of Management with respect to formulating, developing,
        monitoring and reporting on (i) our public affairs policy, governing
        the relationships between us and national and international (semi) public
    bodies, and (ii) our social and environmental policies.
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|61 | CORPORATE GOVERNANCE | | | CHAPTER 7
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CONFLICTS OF INTEREST OF BOARD MEMBERSThe Supervisory Board is responsible for deciding how to resolve
    conflicts of interest between members of the Board of Management, members
  of the Supervisory Board and/or the external auditor on the one hand and the
  company
  on the other hand. A member of the Board of Management or of the Supervisory
    Board is required to report immediately and provide all relevant information
    to the
  chairman of the Supervisory Board and to the other members of the Board of
    Management (if it concerns a member of that board) on any conflict of interest
    or potential
  conflict of interest that may be of material significance to the company and/or
    to the relevant member, including information concerning the relevant members
    spouse, registered partner or other life companion, foster child or relatives
    by blood or marriage up to the second degree. If the chairman of the Supervisory
    Board has a conflict of interest or potential conflict of interest that is
    of
  material significance to the company and/or to him, he is required to report
    this immediately to the vice-chairman of the Supervisory Board and provide
    all
  relevant information, including information concerning his spouse, registered
    partner or other life companion, foster child or relatives by blood or marriage
  up to the second degree. In the event of a conflict between our company and a member
    of our Board of Management, the company will be represented by another member
    of our Board of Management or a member of our Supervisory Board appointed
    by
  our Supervisory Board for this purpose. A decision to enter into a transaction involving a conflict
    of interest with a member of the Board of Management or a member of the Supervisory
    Board that is of material significance to the company or to the relevant
  member requires the approval of the Supervisory Board. The by-laws of the Board of Management and the Supervisory
    Board in addition include a provision that a member of the Board of Management
    or of the Supervisory Board shall not take part in any discussion or decision
    making that involves a subject or transaction in relation to which such member
  has a conflict of interest with the company. SECURITIES OWNED BY BOARD MEMBERSThe members of the Supervisory Board and Board ofManagement and our other senior management are subject to the
  TNT Rules concerning Inside Information, which contain rules of conduct to prevent
trading in our securities when holding inside information. Our Supervisory Board has adopted a policy concerning the
    ownership of and transactions in securities other than our securities by
    members of the
  Board of Management and the Supervisory Board. This policy is incorporated
    in the by-laws of the Board of Management and the by-laws of the Supervisory
    Board
  and requires that each member of the Board of Management and Supervisory Board
    gives periodic notice, at least quarterly, to our central officer of any
    changes
  in his or her holding of securities in Dutch listed companies. A member of
    the Board of Management or the Supervisory Board who invests exclusively
    in listed
  investment funds or who has




transferred the discretionary management of his or her securities
  portfolio to an independent third party by means of a written mandate is exempted
from compliance with these internal notification requirements. SHAREHOLDERS AND THEIR RIGHTS GENERAL MEETINGS OF SHAREHOLDERS
  Frequency and venueWe
    are required to hold a general meeting of shareholders within six months
    after the end of the financial year, among other things, to adopt the financial
    statements and to decide on any proposal concerning dividends. In application
    of Dutch law, the release from liability of the members of the Board of Management
    and the Supervisory Board for the performance of their respective duties
    during the financial year is also an item for the agenda of this meeting.
    However, this release only covers liability for matters reflected in the
    financial statements or otherwise disclosed to the general meeting of shareholders
prior to the adoption of the financial statements. Other general meetings of shareholders are held as often as
    the Board of Management or the Supervisory Board deem necessary and shall
in principle be convened in the following circumstances: 
    if shareholders jointly representing at least
      10% of the outstanding share capital make a written request to that effect
      to the Supervisory Board and the Board of Management, stating their proposed
      agenda in detail, or
    if the Board of Management proposes to take
      a decision that will result in a significant change in the identity or
      character of TNT or its business. General meetings of shareholders may only be held in Amsterdam,
The Hague, Hoofddorp or in the municipality of Haarlemmermeer (Schiphol). Agenda
  One or more shareholders holding shares representing
    at least 1% of our issued share capital or representing a value of €50
    million according to the official price list of Euronext Amsterdam N.V. has/have
    the right to request the Board of Management or the Supervisory Board to
    place items on the agenda of the general meeting of shareholders. Such a
    request has to be honoured by the Board of Management or the Supervisory
    Board provided that important company interests do not dictate otherwise
    and that the request is received by the Board of Management or the Supervisory
    Board in writing, at least sixty days before the date of the general meeting
of shareholders. Notice to convene
  General meetings of shareholders are
    convened by at least 15 days prior notice published in a nationally
    distributed daily newspaper and in the Official Price List of Euronext Amsterdam
N.V. Admission to and voting rights at the meeting
  Each shareholder
    has the right to attend general meetings of shareholders, either in person
or by written or electronic


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|proxy, to address the meeting and to exercise voting
          rights, subject to the provisions of our articles of association. An
          eligible shareholder has the aforementioned rights on the applicable
          record date set by the Board of Management, which date may in no event
          be earlier than seven days prior to the date of the meeting or so much
          earlier as will be allowed by law.
      Each of the shares in our capital carries the right
          to cast one vote. Unless otherwise required by Dutch law or our articles
          of association, resolutions are passed by a simple majority of votes
          cast by the shareholders present or represented at the meeting.
      Under our articles of association there are no limitations
          to the rights of Dutch, non-resident or foreign shareholders to hold
          or exercise voting rights in respect of our securities, and we are
          not aware of any such restrictions under Dutch corporate law.
      DIVIDEND RIGHTSWe pay dividends on profits or by exception
        out of the distributable part of our shareholders equity as shown
        in our financial statements. We may not pay dividends if the payment would
        reduce shareholders equity below the sum of the paid-up capital
        and any reserves required by Dutch law or our articles of association.
        Subject to certain exceptions, if a loss is sustained in any year, we
        may not pay dividends for that year and we may not pay dividends in subsequent
        years until the loss has been compensated for out of subsequent years profits.
      Under Dutch law, the right of a shareholder to receive
          a declared dividend lapses, in favour of the company paying the dividend,
          after five years from the date on which the dividend is made payable.
      Under our current articles of association, we first
          have to pay dividends on the special share equal to 7% of its nominal
          value each year provided that the special share is not owned by the
          company. If preference shares B have been issued and there are remaining
          profits available for payment of dividends, we then have to pay dividends
          on the paid-up portion of the nominal value of the preference shares
          B. Payment is made at a rate of the average 12-monthly EURIBOR (EURO
          Interbank Offered Rate), weighted to reflect the number of days for
          which the payment is made, plus a premium to be determined by the Board
          of Management, subject to the approval of the Supervisory Board, of
          at least one percentage point and at most three percentage points.
      The Board of Management then determines, with the approval
        of the Supervisory Board, which part of the remaining profits shall be
        appropriated to reserves. The profit that remains after appropriation
        is at the disposal of the general meeting of shareholders.
      The Board of Management may pass a resolution that has
          been approved by the Supervisory Board and, under our current articles
          of association, the holder of the special share that any dividend on
          ordinary shares be paid, at the shareholders option, wholly or
    partly in our ordinary shares rather than in cash. |  | The Board of Management may,
          with the prior approval of the Supervisory Board and subject to provisions
          of Dutch law, distribute one or more interim dividends.
      No dividend shall be paid on shares held by us in our
        own capital. Such shares shall not be included for the computation of
        the profit distribution, unless the Board of Management resolves otherwise,
        which resolution is subject to the approval of the Supervisory Board.
      Any change to our guidelines on additions to reserves
          and on dividends (the level and purpose of the addition to reserves,
          the amount of the dividend and the type of dividend) shall be dealt
          with and explained as a separate agenda item at the annual general
          meeting of shareholders. The same rule applies to any resolution to
          determine and pay dividends. The TNT Reserves and Dividend Guidelines
          can be viewed on our website.
      LIQUIDATION RIGHTSIn the event of our dissolution and liquidation,
        the assets remaining after payment of all debts and liquidation expenses
        are to be distributed in the following order of preference: first, to
        the holders of the special share and all outstanding preference shares
        B, the nominal amount paid up on these shares plus accumulated dividends
        for preceding years which have not yet been paid; and second, to holders
        of the ordinary shares in proportion to their shareholdings.
      CHANGES TO THE RIGHTS OF SHAREHOLDERSRights of shareholders may change pursuant
        to an amendment of the articles of association, a statutory merger or
        demerger within the meaning of Book 2 of the Dutch Civil Code or dissolution
        of the Company. A resolution of the general meeting of shareholders is
        required to effect these changes. Under our articles of association,
        such resolution may only be adopted upon a proposal of the Board of Management
        that has been approved by the Supervisory Board.
      MAJOR SHAREHOLDERSTo our knowledge we are not directly or indirectly
        owned or controlled by another corporation or by any government. Except
        as described under The Foundation Protection TNT and Preference
        Shares B below we do not know of any arrangements the operation
        of which might, at a subsequent date, result in a change in our control.
      As of 20 November 2006, the State of the Netherlands
          no longer qualifies as a major shareholder of our company. On that
          date, the State of Netherlands sold all of its remaining ordinary shares
          in TNT.More extensive information on our previous relationship
        with the State of the Netherlands and its termination is included in
        note 32 on page 156.
      As of 23 February 2007, we had not received any notification
          by the Netherlands Authority for the Financial Markets (AFM) that it
          had received a disclosure of a substantial holding in our company under
          the Dutch Act on the Disclosure of Major Holdings and Capital Interests
          in Securities-Issuing Institutions (Wet melding zeggenschap en kapitaalbelang
    in
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effectenuitgevende instellingen, Wmz 2006) nor do we know of
  any shareholder that would otherwise qualify as a major shareholder given his
  beneficial ownership of 5% or more of any class of the companys voting
  securities. The Wmz 2006 imposes a duty to disclose percentage holdings
  in the capital and/or voting rights in our company when such holding reaches,
  exceeds or falls below 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%.
  Such disclosure must be made to the AFM who would thereupon notify us. AUDITOR Our external auditor, PricewaterhouseCoopers Accountants N.V.,
    is appointed by our general meeting of shareholders. Our audit committee
    has
  the sole authority, subject to confirmation by our Supervisory Board, to recommend
    to our general meeting of shareholders the appointment or replacement of
    the
  external auditor. The audit committee is directly responsible for the compensation
    and oversight of the work of the external auditor on behalf of the Supervisory
    Board (including resolution of disagreements between management and the external
    auditor regarding financial reporting) for the purpose of preparing or issuing
    an audit report or related work. The audit committee is required to pre-approve
    all auditing and audit related services, and permitted non-audit services
    (including
  the fees and terms thereof) to be provided by the external auditor. The audit
    committee did pre-approve all services performed in 2006, except for some
    services
  which in the aggregate amount to around 1% of the total amount paid to the
  external auditor. Conflicts of interest and potential conflicts of interest
    between the external auditor and us are resolved in accordance with the terms
    of reference
  of the audit committee and in particular the following annexes thereto: the
  TNT Auditor Independence Policy and the TNT audit committee
  audit, audit-related, and non-audit services pre-approval policy, which
  can both be viewed on our website. At times we use our external auditor to provide services in
    cases where these services do not conflict with the external auditors independence.
  The TNT policy on auditor independence governs how and when we may engage our
  external auditor.
The audit committee grants year-long general pre-approval for
  certain routine services and specific pre-approval for additional services
or budget allocations. Significant non-audit services require a tender process,
and certain services are prohibited outright. In its approval-granting process,
the audit committee considers the applicable regulations and stock exchange
  rules and whether the external auditor is best suited to perform the services
effectively and efficiently. The audit committee also considers the ratio between
the total amount of fees for audit and audit related services and the total
  amount of fees for non-audit services. The audit committee requires a formal
written statement from the external auditor describing all relationships between
the external auditor and us. In principle, the lead (signing) partner and the
concurring (review) partner of the external auditor are rotated after a maximum
period of four years.




The audit committee and the Board of Management are required
  once every three years to conduct a thorough assessment of the functioning of
  the external auditor within the various entities and in the different capacities
  in which the external auditor acts. The next assessment will be held in 2007,
  and the main conclusions of this assessment will be communicated to the 2007
  annual general meeting of shareholders as required. Our internal auditor function, Corporate Audit Services, operates
  under the responsibility of our Board of Management and is subject to monitoring
  by the Supervisory Board, assisted by the audit committee. The Board of Management
  is required to ensure that the external auditor and the audit committee will
  be involved in drawing up the tasks of the internal audit function. The independent external auditor is required to attend the
  meetings of the Supervisory Board at which the financial statements and the
  audit report of the external auditor with respect thereto are discussed. See note 21 to the consolidated financial statements for the
  fees paid to PricewaterhouseCoopers and the distribution of the fees between
  audit related services and non-audit services. COMPLIANCE WITH GOVERNANCE CODES DUTCH CORPORATE GOVERNANCE CODEWe apply the principles and best practice provisions of the
  Dutch corporate governance code that are applicable to the Board of Management
  and the Supervisory Board, except for the two best practise provisions below
that are not fully applied: 
    provision II.2.7: maximum remuneration in
        the  event of dismissal of members of the Board of Management. See chapter
        8, page 72, and
    provision III.3.4: maximum number of Supervisory Board
    positions held by members of the Supervisory Board with Dutch listed companies.
    See chapter 7, page 60. On the pages referred to above we explain why we deviate from
  these best practise provisions. Material future (corporate) developments might
  justify further deviances from the Dutch corporate governance code at the moment
  of occurrence. Each substantial change in the corporate governance structure
  of the company and in the compliance of the company with the Dutch corporate
  governance code shall be submitted to the general meeting of shareholders for
  discussion. The full text of the Dutch corporate governance code can be
  viewed on our website, www.tnt.com. In addition to the Dutch corporate governance
  code we are subject to the New York Stock Exchange corporate governance rules
  and to the Sarbanes-Oxley Act. We are not subject to any other corporate governance
  code.


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|CHAPTER 7 | | | CORPORATE GOVERNANCE | 64
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|NEW YORK STOCK EXCHANGE CORPORATE GOVERNANCE
        RULES
      We comply with the corporate governance rules applicable
          to foreign private issuers listed on the New York Stock Exchange (NYSE),
          which include, inter alia, the provisions of the Sarbanes-Oxley Act.
          As a foreign issuer with American Depositary Shares listed on the NYSE,
          we are allowed to follow our home-country practices with respect to
          most corporate governance matters instead of those that apply to US
          domestic issuers, provided that we disclose any significant ways in
          which our corporate governance practices differ from listed domestic
          US companies under the NYSE listing standards.
      Like many Dutch public limited liability companies,
          we have a two-tier governance standard. As set out in more detail above,
          our Board of Management is comprised of executive directors under the
          supervision of our Supervisory Board, which is comprised of non-executive
          directors. Members of the Board of Management and other officers and
          employees cannot simultaneously act as members of the Supervisory Board.
          The Supervisory Board must approve certain specified decisions of the
          Board of Management.
      Both the Dutch corporate governance code requirements
          and the NYSE rules require that a majority of the members of a board
          of directors be independent, but the relevant definitions of independence
          differ in their details. In some cases, the Dutch requirement is stricter,
          such as by requiring a longer look back period for former
          executive directors, in others the NYSE is the stricter of the two,
          such as requiring a look back period for personal compensation
          generally and using a broader conception of what constitutes an affiliate.
          The NYSE listing standards also require that the external auditor is
          to be appointed by a companys audit committee. As discussed above
          on page 63, in accordance with Dutch law, our external auditor is appointed
          by the general meeting of shareholders and not by our audit committee.
          However, our audit committee has the sole authority to recommend such
          appointment subject to confirmation by our Supervisory Board.
      Our audit committee complies with the provisions of
          the NYSE listing standards applicable to foreign private issuers, and
          we believe that our variation from the standards applicable to US companies
          does not adversely affect the independence of our audit committee.
          In general, we believe that our current corporate governance practices
          are consistent in principle with the standards required of US companies
          listed on the NYSE.
      RELATED PARTY TRANSACTIONSUntil 20 November 2006 the State of the Netherlands
        was our largest shareholder, holding approximately 10.9% of our ordinary
        shares. In view of the transactions that we might have entered into with
        the State of the Netherlands and any of its instrumentalities, the by-laws
        of the Board of Management provided that any such transaction would not
        be deemed to be of material significance below a threshold of €22.5
        million. Until 20 November 2006 transactions with these parties above
        this threshold required the approval of our Supervisory Board. Furthermore,
        all transactions between us and the State of the Netherlands and any
        of its instrumentalities were required to be agreed on terms that are
    customary in the sector concerned. |  | THE FOUNDATION PROTECTION TNT AND PREFERENCE
        SHARES B
      Stichting Bescherming TNT (Foundation Protection TNT)
          was formed to care for our interests, the enterprises connected with
          us and all interested parties, such as shareholders and employees,
          by, among other things, preventing as much as possible influences which
          would threaten our continuity, independence and identity contrary to
          such interests. The Foundation Protection TNT (the Foundation) is an
          independent legal entity and is not owned or controlled by any other
          legal person.
      Pursuant to our articles of association, protective
          preference shares B may be issued to serve these interests. The preference
          shares B have a nominal value of €0.48 and have the same voting
          rights as our ordinary shares. There are currently no preference shares
          B issued, although we have entered into agreements with the Foundation
          for the placement to or acquisition by the Foundation of preference
          shares B under certain circumstances.
      Under these agreements, we have a put option to place
          a number of our preference shares B, not exceeding our total issued
          share capital before such issue (or, subject to prior approval by the
          general meeting of shareholders, such larger number as we may agree
          with the Foundation) with the Foundation, subject its ability
          to pay the purchase price. The Foundation has a credit facility in
          place to permit it to pay the purchase price. The Foundation TNT has
          a call option to acquire a number of preference shares B not exceeding
          the total issued amount of shares minus one and minus any shares already
          issued to the Foundation.
      The exercise price with respect to each of the options
          is the nominal value of €0.48 per preference share B, although
          upon exercise only €0.12 per preference share B is required to
          be paid. The additional €0.36 per preference share B is due at
          such time as we make a call for payment by resolution of our Board
          of Management, which resolution is subject to the approval of the Supervisory
          Board.
      In accordance with our current articles of association
          a general meeting of shareholders shall be convened ultimately two
          years after the first date of issuance of any preference shares B to
          the Foundation for the first time. The agenda for that meeting shall
          include a resolution relating tot the repurchase or cancellation of
          the preference shares B. Should the Foundation receive a demand for
          repayment under the credit facility referred to above, it may demand
          that a general meeting of shareholders be convened for the purposes
          stated above following receipt of such demand.
      The independent members of the board of the Foundation
          are J. den Hoed (chairman), S.C.J.J. Kortmann, J.H.M. Lindenbergh and
          R. Pieterse. With the members of the board of the Foundation, we share
          the view that the Foundation is independent in the sense referred to
          in Annex X to the General Rules of the Euronext Amsterdam Stock Market.
    The preference shares B are the only measure as described in that Annex.
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|BUSINESS PRINCIPLES AND WHISTLEBLOWER
        POLICY
      For our code of ethics, which includes our Whistleblower
          Policy, see chapter 9 on TNTs Business Principles.
      CONTROLS AND PROCEDURES
      INTERNAL RISK MANAGEMENT AND CONTROL
        SYSTEMS
      Our Board of Management is responsible for our system
          of internal risk management and controls and for reviewing their operational
          effectiveness. Our internal risk management and control systems are
          designed to identify significant strategic, operational, compliance
          and financial reporting risks. Nevertheless,
          because of their inherent limitations, the control systems described
          below, as well as those in the following sections, may not prevent
          or detect all misstatements, errors, fraud or violation of law or regulations.
          Neither can they provide certainty as to the achievement of our objectives.
      In 2003, we adopted the Committee of SponsoringOrganisations
          of the Treadway Commission (COSO) Internal Control - Integrated Framework
          as the foundation of our internal risk management and control systems.
          As a business with multiple locations, the redesign and execution of
          our internal risk management and control systems has been a major undertaking
          that has required considerable resources and organisational changes
          to achieve an appropriate and effective foundation on which to sustain
          and grow our business. The requirements of the U.S. Sarbanes-Oxley
          Act of 2002 (Sarbanes-Oxley) and the requirements of the Dutch corporate
          governance code, taking into account the recommendations of the Dutch
          corporate governance code Monitoring Commission (the Frijns Committee),
          have also been part of the redesign and execution. In addition in 2005,
          we self assessed and commissioned a review into our integrity and ethical
          controls and procedures. This review was carried out by external counsel
          and completed in early 2006. A number of recommendations following
          this process have been implemented by our Board of Management under
          the supervision of our Supervisory Board.
      Our process of design and execution of our current internal
          risk management and control systems has taken three years and included
          development of internal procedures and processes as well as the restructuring
          of functions to facilitate best practices. By establishing an appropriate
          structure and specifying a risk management, internal control, integrity
          and compliance framework for our operational units, the Board of Management
          has established the internal environment for appropriate risk management
          and internal control. The TNT business principles and group policies
          define the tone at the top with regard to ethical behaviour
          and doing business. Strategies have been established for every division
          and operational unit and translated into clear objectives, amongst
          others, with regard to business, markets, financial results, human
          resources and sustainability. The objectives are reviewed in the Annual
          Strategic Review for the group and at our operational units. Performance
    and compliance are monitored regularly in discussions between the appropriate |  | management and the Board of
          Management and supported and monitored by regular internal audits.
      The Board of Management is satisfied with the progress
          that has been made, but recognises that development, implementation
          and execution of our internal risk management and control systems require
          continuous improvement and focused attention and remains committed
          to reviewing and monitoring their appropriateness and operational effectiveness
          going forward. We have established measures relating to the general
          control environment as well as tools for monitoring the control environment
          (e.g. letters of representation signed by all managing and finance directors
          of our group entities, divisional and group level employees that report
          directly to the Board of Management, our internal audit function, and
          monitoring duties of our divisional audit committees). In addition,
          there is a system of controls over financial reporting, including amongst
          others our internal auditors review and the review and report
          of our disclosure committee.
      We can demonstrate examples of progress by referring
          to the three categories of internal controls that the Board of Management
          previously identified as significant deficiencies as indicated in our
          previous annual report. These categories related to 1) our entity-level
          control framework and in particular US GAAP knowledge, 2) financial
          reporting on tax, and 3) controls within and around the use of electronic
          templates that directly relate to the creation, monitoring and review
          of our financial statements. The substantial education and awareness
          programme which we rolled out in the first quarter of 2006, as well
          as focused management attention, has resulted in each of these areas
          being addressed satisfactorily before 31 December 2006.
      Throughout 2006 we have spent considerable time and
          resources documenting and testing the operational effectiveness of
          our internal control over financial reporting to comply with our obligations
          under Section 404 of Sarbanes-Oxley and to comply with (or, if appropriate
          to explain the deviations from) the Dutch corporate governance code
          and the recommendations of the Frijns Committee. We have developed
          and rolled out to all of our operational units world wide a framework
          of entity-level controls. This latter framework includes an integrity
          awareness and training programme, enhanced and more robust group-wide
          policies and procedures and group-wide internal control awareness training
          which complement our internal risk management and control systems.
      The output of our efforts to strengthen our internal
          risk management and control systems has resulted in a group-wide risk
          management framework with processes to identify and, where applicable,
          mitigate 1) risks to our strategy and operations, 2) risks presented
          by the regulatory and compliance environments in which we operate,
          and 3) risks related to financial exposures and financial reporting.
      Additionally, based on our assessment, we determined
          that there were no material weaknesses (as defined by the Public Company
          Accounting Oversight Board Auditing Standard 2) in our management report
          on internal control over financial reporting as of 31 December 2006.
          We are therefore able to confirm that our internal control over financial
          reporting was adequate and effective as of 31 December 2006, the time
    of its assessment.
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|Our independent auditors are obligated
          under the standards of the Public Company Accounting Oversight Board
          to consider our internal control over financial reporting as a basis
          for designing their auditing procedures for the purpose of expressing
          their opinion on our consolidated financial statements. We have discussed
          our own assessment of our control and risk management framework and
          in particular our internal control over financial reporting with our
          independent auditors. Our independent auditors concur with our conclusion
          in relation to our assessment of internal control over financial reporting
          as of 31 December 2006, as disclosed in the previous paragraph. Their
          report is included in Chapter 12 on page 103.
      DISCLOSURE CONTROLS AND PROCEDURESAs of 31 December 2006, under the supervision
        and with the participation of our chief executive officer and chief financial
        officer, we evaluated the effectiveness of the design and operation of
        our disclosure controls and procedures. Based on this our chief executive
        officer and chief financial officer concluded our disclosure controls
        and procedures were effective as of 31 December 2006.
      REPORTING REQUIREMENTS UNDER SECTION
        II.1.4 OF THE DUTCH CORPORATE GOVERNANCE CODE TAKING INTO ACCOUNT THERECOMMENDATIONS OF THE FRIJNS COMMITTEE
        ON THE APPLICATION THEREOF AND REPORTING REQUIREMENTS UNDER SECTION 404
        OF SARBANES-OXLEY
      The concept of internal risk management and control
          systems as used in the Dutch corporate governance code varies significantly
          from the concepts of disclosure controls and procedures and internal
          control over financial reporting under the US Securities Exchange
          Act of 1934, as amended, and the related SEC rules. Specifically the
          Dutch corporate governance code requires us to examine strategic, operational,
          regulatory, compliance and financial risks.
      The Board of Management has reviewed, analysed and prioritised
          the strategic, operational, regulatory, compliance and financial risks
          to which we are exposed and has reviewed our control environment for
          the year ended 31 December 2006. The outcome of this review and analysis
          has been shared with the audit committee and the Supervisory Board
          and has been discussed with our independent auditors. Our current view
          on key risks is summarised in chapter 10.
      With respect to financial reporting, the Frijns Committee
          has stated that it considers application in full of Section 404 of
          Sarbanes-Oxley meets the Dutch requirements in respect of the internal
          control objective and financial reporting. The Report of Management
          on Internal Control Over Financial Reporting is stated below.
      REPORT OF MANAGEMENT ON INTERNAL CONTROL
        OVER FINANCIAL REPORTING
      Our management is responsible for establishing and maintaining
          adequate internal control over financial reporting for the company.
    Internal control over financial reporting is a process, |  | designed under the supervision
          of a companys chief executive officer and chief financial officer,
          to provide reasonable assurance regarding the reliability of financial
          reporting and the preparation of financial statements for external
          purposes in accordance with generally accepted accounting principles
          and includes those policies and procedures that: 1) pertain to the
          maintenance of records that in reasonable detail accurately and fairly
          reflect the transactions and dispositions of the assets of a company;
          2) provide reasonable assurance that transactions are recorded as necessary
          to permit preparation of financial statements in accordance with generally
          accepted accounting principles, and that receipts and expenditures
          of the registrant are being made only in accordance with authorisations
          of a companys management and directors; and 3) provide reasonable
          assurance regarding prevention or timely detection of unauthorised
          acquisition, use or disposition of a companys assets that could
          have a material effect on its financial statements.
      Because of its inherent limitations, internal control
          over financial reporting may not prevent or detect misstatements. Also,
          projections of any evaluation of effectiveness to future periods are
          subject to the risk that controls may become inadequate because of
          changes in conditions, or that the degree of compliance with the policies
          or procedures may deteriorate.
      Under the supervision, and with the participation of
          our management, including our chief executive officer and chief financial
          officer, we have conducted an evaluation as of 31 December 2006 of
          the effectiveness of our internal control over financial reporting
          based on the framework in Internal Control  Integrated Framework
          issued by COSO. Based on this evaluation, management has concluded
          that the companys internal control over financial reporting was
          effective as of 31 December 2006.
      PricewaterhouseCoopers Accountants N.V., the independent
          auditors that audited the financial statements included in this annual
          report, has audited this assessment of the effectiveness of our internal
          control over financial reporting as of 31 December 2006; their report
    is included in Chapter 12 on page 103.
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| | REMUNERATION REPORT | | | CHAPTER 8
|

| | Teamwork
        and a personal 
        touch are the keys to a 
        successful team.
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|CHAPTER 8 | | | REMUNERATION REPORT | 
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      POST HAMBURG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
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| | Aygül
      radiates energy and drive and you need only a single conversation with her
      to understand why she is proving such a success in a challenging job. In
      November 2005, starting entirely on her own, she took on the task of setting
      up TNT Posts Hamburg operations. In a metropolitan area spanning 750
      km2 and some 1.8 million inhabitants, thats no mean task.
      After creating a team of over 400 staff within a 6-week period, deliveries
      started in January 2006 with new contracts coming in each week.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
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| | Aygül: The
        months setting up the depot were an absolute rollercoaster and without
        doubt the most intense of my career to date. Although I had a good position
        at Deutsche Telekom at the time, I loved the idea of setting up something
        new. My first task was to create the team. Sometimes we had 10 interviews
        a day, with a five-minute break between candidates. I didnt have
        time to think so I had to rely on gut feeling and common sense. Unless
        people connect, theres no chance of success. So far things have
        worked out better than I could have hoped for. Seeing the harmony that
        already exists within the team has really increased my self confidence.
      Self confidence is
        something she needs at the moment. Now that the teams in place,
        were concentrating on optimising our processes and eliminating any
        problems. Cost-cutting, sales and expanding our delivery network are critical.
        One of the things I have been most amazed about at TNT is the |  | trust the organisation
        has in its staff. Of course they take my track record into account, but
        I am currently also involved in looking at companies that would be of
        interest to us for purchase to expand our delivery coverage. I guess its
        one of the advantages working for a company as large as TNT that this
        is possible.
      So how has she managed
        to set up this sort of operation within such a short period of time? Aygül:
        Teamwork, teamwork, teamwork and a personal touch. In the same way
        TNT has trusted me to do my job, I trust my staff. I believe that if you
        empower people and give them the feeling that their work makes a difference,
        you will get the most out of them, they will enjoy their work and they
        will feel appreciated. Of course its not going to work 100% of the
        time, but if they feel connected to the company, if you can forge a feeling
        of personal responsibility, a team is far more likely to succeed.
      AYGÜL ÖZKANDepot Manager TNT Post
        Hamburg 
        35 years old, married, 1 child | 
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|CHAPTER 8 | | | REMUNERATION REPORT | 68
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INTRODUCTION The remuneration of the members of the Board of Management is
  the responsibility of the Supervisory Board. The remuneration committee is appointed
  by our Supervisory Board to assess and propose the remuneration policy for members
  of the Board of Management and to prepare the proposal for the remuneration
  of the individual members of the Board of Management.The remuneration policy is adopted by the general meeting of
  shareholders. Material changes to the policy are submitted to the meeting for
  adoption. The remuneration committee is made up of at least three members
  of the Supervisory Board and is chaired by the vice chairman of the Supervisory
  Board. In 2006 the remuneration committee comprised Mr. J.M.T. Cochrane (chairman),
  Mrs. G. Kampouri Monnas, Mr. W. Kok and Mr. R.W.H. Stomberg. No member of the
  remuneration committee is a member of the management board of another Dutch
  listed company and no member of the remuneration committee is a member of the
  audit committee. During 2006, the remuneration committee met five times. The
  chief executive officer was invited for all meetings except for meetings at
  which his terms and conditions were discussed. The role of secretary of the
  committee is fulfilled by a representative of our corporate human resources
  department. The remuneration committee used professional advice from the
  following independent external advisors: 
    Allen & Overy LLP provided legal advice
      on employment related matters,
    Towers Perrin and Hewitt Associates advised
      on remuneration market practice and equity based compensation and provided
      the valuations used for long term incentives,
    Petercam Bank Nederland B.V. advised on our
      total shareholder return performance compared to our peer group,
    Ernst & Young provided tax advice relating
      to the employment of the US-based member of the Board of Management, and
    Wilfred Klaassen Holding B.V. provided advice
      relating to the change of pension arrangements of the Dutch members of the
      Board of Management. The advisors do not advise the members of the Board of Management
  personally on their remuneration. This report sets out the policies on the remuneration of the
  members of the Board of Management. For the detailed disclosure of the remuneration
  paid to individual members of the Board of Management, see note 19 of the consolidated
  financial statements. OBJECTIVE OF THE REMUNERATION POLICYThe objective of the remuneration policy is to attract, motivate
    and retain qualified members of the Board of Management of the highest calibre,
    with an international mindset and background essential to the successful leadership
    and effective management of a large global company. The members of the Board
    of Management are rewarded accordingly; an important




part of their remuneration is based on performance of the company.
  The remuneration structure for the Board of Management is therefore designed
  to balance short term operational performance with the long term objectives
  of the company and value creation for its shareholders. REMUNERATION ELEMENTS AND MARKET ALIGNMENT The remuneration for members of our Board of Management consists
    of three elements: 1.
    Fixed base salary.2.
    Variable compensation, linked
      to performance, consisting of:a.
    a short term incentive component, andb.
    a long term incentive component.3.
    Pension arrangements. The target level for total direct compensation, consisting
    of base salary and at target short and long term variable compensation
    (numbers 1 and 2 above), is benchmarked against the European reference market
    for executive directors of multinational companies. The European market is
    defined as the composite markets of Belgium, France, Germany, Italy, the Netherlands,
    Switzerland and the United Kingdom. This reference market reflects companies
    with comparable revenue, number of employees and international character. There has not been any adjustment of the level of the fixed
  base salary, and the at target levels for the short term and long
  term incentives have not been adjusted for the Board of Management since 2004.
  As a result, the remuneration of the Board of Management is currently below
  the European reference market. Under the current policy we will increase the
  base salary and at target levels of the short term and long term
  incentive for all members of the Board of Management for 2007. At the same time,
  we will also rebalance the pay mix of the remuneration package, so that the
  total direct compensation for 2007 is increasingly performance driven compared
  to the 2006 package, in line with the current market trend of emphasis on performance
  related pay. Below are summarised and described the features of the current
  policy, the adjustments to the remuneration as of 2007 under the current policy
  and the proposed adjustments to the current policy for each component, insofar
  as applicable. BASE SALARYIn order to align the current base salaries to the European reference
  market, the base salaries of all members of the Board of Management will be
  increased by 5% for 2007. VARIABLE COMPENSATIONWe consider variable compensation to be an important part of
  the remuneration package for the members of the Board of Management. Therefore,
  a substantial part of the total direct compensation of the members of the Board
  of Management consists of variable compensation on performance. The bonus targets
  and performance conditions reflect the key drivers for




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value creation and medium to long term growth in shareholder
  value, as well as drivers for the realisation of our mission-related goals.
  The challenge for the Board of Management is to achieve sustainable performance
  for both the short term and the long term. Compared to 2006 we will increase in 2007 the level of both
  short term and long term incentives. A description of features of the short
  term incentive and long term incentive for 2007 follows below. Short term incentive: cash bonusThe short term incentive scheme for the members of the Board
  of Management reflects the accountability for our annual budgets and our mission
  by rewarding both financial and non-financial performance as required for sustainable
  results. TargetsThe Supervisory Board sets the targets for the mission-related
  incentive plan at the beginning of each financial year.For 2007 the following targets will apply: 
    Financial targets:
    economic profit,
    earnings, and
    revenue growth. Since growth is a key target of our strategy, revenue growth
  has been added in the 2007 target setting with economic profit and earnings
  being continued from 2006. Depending on the tasks and responsibilities of each
  individual member of the Board, the financial targets are related to group or
  division performance. See table below. 
    Non-financial targets:
    exceeding customers expectations: continued
      improvements in our relations with customers, which are measured through
      customer satisfaction surveys and by assessing the relationship with our
      customers in person,
    instilling pride in our people: continuous
      improvement in engaging our staff, which is measured through employee engagement
      surveys, and
    sharing responsibility for our world implementing
      the agreed Social Responsibility standards: making a difference to our environment.
      This can be accounted for by our global initiatives to reduce the emission
      of CO2and our involvement with the United Nations World Food
      Programme.




The Supervisory Board will designate specific projects and initiatives
  to each member of the Board of Management for which the individual member will
  be personally responsible. Weighting of the targets 2007For 2007 the weighting of the financial and non-financial targets
  revert to the 2005 levels. The achievement of financial targets will account
  for 70% of the bonus (2006: 80%) and the non-financial targets for 30% of the
  bonus (2006: 20%). Pay out level for the short term incentiveThe bonus based on financial targets will be calculated using
  a sliding scale between the minimum target level and the stretch
  target level. Below the minimum required performance, the bonus
  for financial performance is zero. Realisation of the stretch target
  or more, results in the maximum bonus that can be earned. Depending on the realised
  performance, the level of the bonus payable will be determined as follows: 
    minimum performance
      results in a bonus pay out of:
    60% annual base salary for members of the
      Board of Management (2006: 50%),
    70% annual base salary for Chief Executive
      Officer (2006: 50%),
    target performance
      results in a bonus pay out of:
    70% annual base salary for members of the
      Board of Management (2006:60%),
    80% annual base salary for Chief Executive
      Officer (2006: 60%),
    stretch performance
      results in a bonus pay out of:
    100% annual base salary for members of the
      Board of Management (2006: 75%),
    120% annual base salary for Chief Executive
      Officer (2006: 75%). All targets are measured separately. The realisation of each
  target can result independently in bonus payments. TNT does not disclose the
  targets required, as this qualifies as commercially sensitive information. The bonus for non-financial performance does not have a sliding
  scale. The Supervisory Board allocates the non-financial bonus based on the
  achievement of individual targets of the Board of Management and determines
  the associated pay-out. The bonus for 2007 as percentage of the base salary at different
  performance levels is set out below for each member of the Board of Management.




|                          |                   |                       |                       |                       
|------------------------- | ----------------- | --------------------- | --------------------- | ----------------------
|                          | Financial targets | Non-financial targets |                       | Total range           
|                          |                   |                      
|                          | Earnings target   |                       | Revenue growth target | Economic profit target
|                          |                   |                       |                       |                       
|                          | minimum           |                       | target                |                       
|                          |                   |                       |                       |                       
|Peter Bakker 1            | 33%               |                       | 40%                   |                       
|                          |                   |                       |                       |                       
|Henk van Dalen 1          | 28%               |                       | 35%                   |                       
|                          |                   |                       |                       |                       
|Harry Koorstra 2          | 11%               |                       | 14%                   |                       
|                          |                   |                       |                       |                       
|Marie-Christine Lombard 2 | 11%               |                       | 14%                   |                       
|                          |                   |                       |                       |                       

|1 | The financial targets for the chief executive
      officer and the chief finanicial officer are set in terms of earnings and
      revenue growth from continuing operations.                                                                  
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | The financial targets for the group managing
      directors consist of targeted earnings from continuing operations of the
      company as a whole and of internal targeted economic profit and revenue
      growth of the relevant division.



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|CHAPTER 8 | | | REMUNERATION REPORT | 70
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To bring our short term bonus scheme more in line with market
  practice, the bonus share matching plan will no longer be applied as of 2007.
  Under the bonus share matching plan 25% of any short term bonus payable to members
  of the Board of Management was paid out in shares at the then current market
  value with accompanying right on matching shares, if at least 50% of the shares
  is retained for a period of three years. In compliance with the Dutch corporate
  governance code, the members of the Board of Management may not sell their matching
  shares before the earlier of five years from the date of grant or the end of
  the employment, although any sale of shares for the purpose of using the proceeds
  to pay for the tax relating to the grant of these shares is exempted. These
  bonus shares are held in trust by our share administrator. Any bonus payable
  under the short term incentive scheme in 2007 will be paid out entirely in cash. Long term incentive: performance sharesIn order to align the objectives of the Board of Management to
  the value-creation objectives of the shareholders, members of the Board of Management
  are awarded conditional rights on our shares under the Performance Share Plan.
  The vesting of performance shares is conditional on the achievement after three
  years of a certain total shareholder return. Total shareholder return is defined
  for this purpose as the return to shareholders from investing in shares, in
  terms of both share price appreciation and dividends, assuming reinvestment
  of dividends. Shares granted to our Board of Management via our equity plans
  without financial consideration must be retained for a period of at least five
  years after grant or until at least the end of employment if this period is
  shorter, unless it can be demonstrated to our corporate secretary that their
  sale is prompted by required tax payments with respect to these shares. The value of the total of shares granted to the members of
    the Board of Management under the Performance Share Plan is benchmarked on
    a yearly basis against market practice, using the European market for executives
    as reference. The number of shares to be granted is calculated by dividing
    the available amount by the share price on the day following the announcement
    of first quarter results. For 2007 the at target and grant value
    of the performance shares will be increased by 44% for the Chief Executive
    Officer and by 49% for the members of the Board of Management. This increase
    also compensates for the loss of the bonus matching shares. Introduction of a customised indexWhile respecting the current rules of the Performance Share
    Plan, the Supervisory Board has introduced a customised index for the measurement
    of our total shareholder return. For the vesting of the performance shares
    granted prior to 2007 we compared our total shareholder return against two
    benchmarks, each representing 50% of the performance shares: (a) the AEX index
    of Euronext Amsterdam N.V. and (b) a peer group of direct competitors (UPS,
    FedEx and DPWN).The current performance scheme has
    been replaced by a scheme based on a customised index. Reasons for this adjustment
    are:





    the previous performance scheme did not take
      into account any differences in risk profile of the participating companies,
    the limited number of direct competitors compared
      to the original performance scheme. In the new index all AEX companies and direct competitors (UPS,
  Deutsche Post AG, Fedex and Austria Post) are weighted (50%-50%) on the basis
  of a comparability study in which the various risk profiles of the individual
  companies are taken into account. Starting in 2007 the total shareholder return
  of the performance shares granted, will be compared against this customized
  index. The performance shares in 2007 will vest following a gradual scale of
  0% -150% (2006: 0% -120%) of the base allocation depending on our total shareholder
  return performance during the three financial years starting with the year in
  which they are granted.During the vesting period, the total shareholder return data
  are compiled by an external data provider, based on objective data, and reported
  quarterly. After three years, the final performance of the company compared
  to the performance of the peer group in the customised index determines the
  number of shares to be vested. The remuneration committee advises the Supervisory
  Board on the basis of the sliding performance range set out below. % difference company performanceversus customized index
      % of base allocation ofperformance shares that vest≥ + 20%
      
      150.0%+ 10%
      
      112.5%0%
      
      75.0%− 10%
      
      37.5%≤ − 20%
      
      0% PENSION ARRANGEMENTSOur policy is that pension arrangements should be in line with
  local practice in the country of residence of the relevant member of the Board
  of Management. The pension arrangements for all members of the Board of Management
  include entitlement to a pension in the event of illness or disability and a
  spouses/dependants pension on death. We revised the pension policy for our Dutch members of the
    Board of Management to reflect the developments in society with respect to
    pension rights and to align the policy more closely to the new policy for
    our employees in the Netherlands under the collective labour agreement (CAO). In the 2007 annual general meeting of shareholders the following
  changes in the pension policy will be submitted for adoption. As of 2007, we
  will move the current Dutch members of the Board of Management from a final
  pay scheme to a career average scheme accrued at pension. The main features
  of the career average scheme are: 
    pensionable age at 65,
    pensionable income is based on annual base
      salary only,
    annual accrual rate for the old-age pension
      is 2.25%,
    offset for state pension at fiscal minimum,
    the benefits are indexed during accrual,
    no employee contribution.




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|The current Dutch members will receive a compensation
        for the loss of the early retirement scheme as of the age of 62, which
        could be used for a life course saving scheme. The current Dutch members
        of the Board of Management are also offered an allowance against the shortfall
        caused by the change of pension systems.
      New Dutch members of the Board of Management will be
        offered a career average pension scheme.
      OVERVIEW COMPENSATION & BENEFITS 2006
      The table below gives an overview of the three elements
        of the compensation and benefits calculated for 2006 for each member of
        the Board of Management. |  |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  | 



|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|------------------------------------------- | ----------- |  | ---------- |  | ----------- |  | ----------- |  | ----------- |  | ------------- | 
|                                            | Base salary |  | Accrued    |  | as % of     |  | Accrual for |  | as % of     |  | Pension       | 
|                                            |             |  | short term |  | base salary |  | long term   |  | base salary |  | related costs | 
|                                            |             |  | incentive  |  |             |  | equity      |  |             |  |               | 
|                                            |             |  |            |  |             |  | incentive   |  |             |  |               | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|Peter Bakker                                | 900,000     |  | 741,067    |  | 82%         |  | 353,658     |  | 39%         |  | 121,825       | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|Henk van Dalen 1                            | 450,000     |  | 378,000    |  | 84%         |  | 40,842      |  | 9%          |  | 314,968       | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|Harry Koorstra                              | 600,000     |  | 507,639    |  | 85%         |  | 177,617     |  | 30%         |  | 113,725       | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|Marie-Christine Lombard                     | 600,000     |  | 484,914    |  | 81%         |  | 206,775     |  | 34%         |  | 276,000       | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|Total                                       | 2,550,000   |  | 2,111,620  |  |             |  | 778,892     |  |             |  | 826,518       | 
|                                            |             |  |            |  |             |  |             |  |             |  |               | 
|(in €)
      1 Employed as of 1 April 2006. |            
|                                           

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|For more detailed information on each element, see note
        19 of our consolidated financial statements.
      TERM OF APPOINTMENT AND TERM OF EMPLOYMENT
      Members of the Board of Management are appointed for
        a period of four years. On expiry of the four-year term, a member of the
        Board of Management may be reappointed for successive terms of four years
        each. In the case of a proposed reappointment the performance of the candidate
        as a member of the Board of Management is taken into account. The Supervisory
        Board has agreed with the members of the Board of Management that as of
        2004, each year a member of the Board of Management will step down and
        be eligible for reappointment for a new four-year term according to the
        reappointment plan. Details on each member appointment(s) are set out
        below. |  |  | 



|                        |                  |            |              |  |                 |            
|----------------------- | ---------------- | ---------- | ------------ |  | --------------- | -----------
|                        | Employed since   | Term of    | Board member |  | Year of         | Term of    
|                        |                  | employment | since        |  | (re)appointment | appointment
|                        |                  |            |              |  |                 |            
|Peter Bakker            | 14 October 1991  | Indefinite | 1998         |  | 2004            | Four years 
|                        |                  |            |              |  |                 |            
|Henk van Dalen          | 1 April 2006     | Indefinite | 2006         |  | 2006            | Four years 
|                        |                  |            |              |  |                 |            
|Harry Koorstra          | 1 October 1991   | Indefinite | 2000         |  | 2005            | Four years 
|                        |                  |            |              |  |                 |            
|Marie-Christine Lombard | 15 December 1999 | Indefinite | 2004         |  | 2004            | Four years 
|                        |                  |            |              |  |                 |            
|                       
|

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|CHAPTER 8 | | | REMUNERATION REPORT | 72
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SEVERANCEThe contractual termination arrangements for the members of
    the Board of Management are as follows: 
    notice period:six months,
    the contractual severance payments other
      than related to change of control:one year base salary or a maximum
      of two years base salary in the first four-year term, if one year is considered
      to be unreasonable. Contracts entered into prior to 2004 will remain unaltered.
      For members of the Board of Management who are not residents of the Netherlands,
      we follow local market practice for that part of the base salary earned
      in the country of residence,
    severance payments in case of change of
      control:the sum of the last annual base salary and pension contribution
      plus the average bonus received over the last three years, multiplied by
      two. LOANSWe do not grant loans to any member of our Board of Management.


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Back to Contents   BUSINESS PRINCIPLES AND SOCIAL RESPONSIBILITY
      |
      CHAPTER 9 
      Its
          all about 
          communication and 
          enjoying being with 
          others. 2006 ANNUAL REPORT AND FORM 20-F     Back
    to Contents  CHAPTER 9
      |
      BUSINESS PRINCIPLES AND SOCIAL RESPONSIBILITY
      4 TNT
        POSTJohn
        looks like a postman. He dresses smartly, always has a smile on his face
        and radiates a down-to-earth nature that immediately calls to mind reliability.
        He exercises that same nature in his job. When hes not delivering
        letters and parcels in his hometown of Nieuwegein, he is planning the
        rounds of others or acting as contact person for the OC, part of the national
        Works Council responsible for employee surveys related to company processes.
        His company TNT Post is undergoing some fundamental changes and not all
        his colleagues understand the necessity of what is going on. He considers
        it his responsibility to maintain a good atmosphere within the team and
        is always ready to talk about and explain developments to those around
        him.John: I am
          a connector by nature. One of my ambitions at work is to ensure that
          the various characters within our team, and on a larger scale within
          the branch office, mould together as well as possible. With the changes
          within Post, full-time postmen are going through a hard time. Some of
          them feel that the post delivery staff, who are not full-time and cost
          less, are taking their jobs. They forget the underlying reasons why
          the changes are necessary. I help them to understand.
      
      Ive
          been with the company for 22 years now. If youre going to head
          out into the cold every morning, you have to love the interaction with
          people. What I like most about it is that there are new challenges and
          new experiences every day. Add the fact that you get the respect from
          those around you  everybody knows the postman in their area 
          and youll understand why I like getting up each morning. That
          TNT looks after us helps too, of course. Even now that matters are a
          little tougher, they are doing their best to explain what is going on.
          Like a huge family, there are many different parts, each with their
          own interests and specialties yet all with the same mentality 
          doing our jobs as well as we can.
        JOHN TEN HEUVELTNT Post - Postman,
          work planner and contact for the OC 
          40 years old, married, 2 children 2006 ANNUAL REPORT AND FORM 20-F    Back to Contents      Back to Contents      Back to Contents






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|CHAPTER 9 | | | BUSINESS PRINCIPLES AND SOCIAL RESPONSIBILITY | 74
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|Set out below are our TNT Business Principles, which we
        seek to comply with in everything we do, as well as a description of our
        social responsibility policy and partnership with the United Nations World
        Food Programme.
      TNT BUSINESS PRINCIPLES
      We are committed to sound business conduct and we therefore
        manage our business according to our company standards and these TNT Business
        Principles.
      We also support the principles of the United Nations
        Global Compact on human rights, employment standards, the environment
        and anti-corruption.
      PRINCIPLES THAT GUIDE OUR COMPANYLegal and international regulationsWe comply with the laws, rules and regulations of the countries
        in which we conduct business.
      Public reporting and communicationOur financial statements, public reporting documents and
        other public communication provide full, fair, accurate, timely and understandable
        disclosure of TNTs position in accordance with relevant laws and
        generally accepted accounting principles and standards.
      We comply with all applicable laws and accounting rules,
        financial reporting requirements and requirements of the securities exchanges
        on which TNT is listed.
      We maintain open and transparent communication with our
        customers, employees, shareholders and society, while giving due respect
        to confidentiality.
      Public activitiesWe do not intervene in party political matters, nor do
        we make gifts or donations to political parties.
      Where it concerns our business, we  as a company
         voice opinions on social, environmental, regulatory or other matters
        that may affect our shareholders, customers, employees and the world.
      SafetyWe provide all employees with safe and healthy working
        conditions.
      We comply with relevant safety laws and regulations,
        and deploy policies that prevent, identify and eliminate hazards across
        our company and operations. Safety representatives and improvement groups
        exist throughout our company.
      We strive to adopt best practices and to exceed legal
        safety requirements. We continually measure and assess our safety performance. |  | PRINCIPLES THAT GUIDE OUR PEOPLEEmployeesWe seek to attract, develop, reward and retain outstanding
        individuals who appreciate the value of acting as a team.
      We create equal opportunities for all our employees,
        without regard to age, disability, ethnicity, gender, marital status,
        race, religion or sexual orientation.
      We do not condone unfair treatment of any kind. We treat
        all people with consideration and respect.
      We are committed to the Investor in People standard.
      Individual conductCONFLICTS OF INTERESTEmployees may not take business opportunities for themselves
        that belong to TNT. Our employees must report to management any transaction
        or relationship that could reasonably be expected to give rise to a conflict
        of interest.
      COMPANY ASSETSOur employees may not use company assets for unauthorised
        personal benefit. We do not tolerate fraud, theft, loss through recklessness
        or waste of company assets.
      GIFTS AND ENTERTAINMENTOur employees must avoid improper personal benefits for
        themselves or family members that result from their association with TNT.
        Employees may not accept gifts or entertainment that might appear to place
        them under obligation.
      BRIBESOur employees and agents may not pay or accept bribes to
        gain or render orders, services or financial or other benefits. Our employees
        and agents must immediately turn down and report any attempt at or opportunity
        for bribery.
      FACILITATING PAYMENTSIn certain circumstances, small cash sums or small gifts
        may be appropriate if customary and necessary to expedite or secure the
        performance of routine governmental action and permitted under applicable
        laws of the relevant jurisdiction. However, such payments  referred
        to as facilitating payments  should be avoided whenever possible.
        Prior to making such payments, there must be consultation with the ethics
        committee on behalf of the TNT Board of Management. All facilitating payments
        must be fairly and accurately recorded and accounted for.
      PRINCIPLES THAT GUIDE OUR BUSINESSCustomersWe strive to provide the most reliable and efficient solutions
        in the transfer of our customers goods and documents.
      We safeguard property and information entrusted to us
        by customers and other parties.
      CompetitionWe believe in open and fair competition.
      We do not use unethical practices as a means to obtain
        competitive advantage. We will not use information acquired
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|75 | BUSINESS PRINCIPLES AND SOCIAL RESPONSIBILITY | | | CHAPTER 9
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|through illegitimate activity to the detriment of competitors
        or other parties.
      Business associates and agentsThe TNT Business Principles guide our decisions to do business
        or to partner with others. To the fullest extent possible, we require
        our business associates to observe the TNT Business Principles. We expect
        our agents  individuals or organisations that legally represent
        TNT  to comply with the principles.
      PRINCIPLES THAT GUIDE OUR RELATIONSHIP
        WITH OUR WORLDSocial responsibilityTo carry out our business, we use resources that impact
        society and the environment. We support and strive to implement developments
        that can lead to sustainable environmental and social benefits.
      We strive to use finite resources carefully. We incorporate
        environmental risk management into our decision-making. We review and
        regularly report on progress in social responsibility.
      We invest in society around the world, putting our resources
        to use in areas related to our business. Our social investment aims to
        promote the best outcome for our partners, stakeholders and our business.
      APPLICATION OF THESE PRINCIPLESThe TNT Business Principles apply to all TNT controlled
        companies and joint ventures and TNT employees. TNT expects its agents
        to comply with the TNT Business Principles.
      The TNT Board of Management is responsible for adopting,
        communicating and enforcing the TNT Business Principles. Our internal
        audit, integrity, risk management and security functions support the board
        in monitoring compliance.
      Any change in the principles or waiver of provisions
        may be made only by the TNT Board of Management with approval from the
        TNT Supervisory Board. Such changes will be promptly disclosed at www.tnt.com.We will not penalise employees for loss of business resulting
        from adherence to the TNT Business Principles, for pointing out a breach
        or suspected breach of these principles, or for taking any lawful action
        with regard to a breach or suspected breach.
      All employee decisions must be made with full recognition
        and in compliance with these TNT Business Principles.
      Violation of these principlesViolation of the TNT Business Principles can lead to disciplinary
        measures, dismissal and, where laws are broken, civil or criminal prosecution.
      TNT Whistleblower PolicyWe encourage TNT employees to promptly report any breach
        or suspected breach of any law, regulation, the TNT Business Principles
        or other company policies and procedures or any other alleged irregularities. |  | We investigate reports promptly and with strict confidentiality,
        and we will not retaliate or undertake action against employees for filing
        a report or assisting another employee in doing so. However, intentionally
        making a false whistleblower report will lead to disciplinary action.
      You can find the TNT Whistleblower Policy (and related
        procedure) at www.tnt.com.
      TNT SOCIAL RESPONSIBILITY POLICYOur social responsibility policy sets forth our aspirations for environmental
        care and community involvement.
      We are a global business that strives to improve our
        social and environmental impact on communities around the world. We aspire
        to help meet the needs of the current generation without producing a poorer
        world for our children by compromising the ability of future generations
        to meet their own needs.
      We are committed to communicating and building a dialogue
        with internal and external stakeholders about our challenges and accomplishments
        in achieving our sustainable development and environmental management
        goals. Our aim is to be as transparent as possible in social responsibility,
        while offering comparability to our competitors performance.
      We hold an annual competition to celebrate the best internal
        initiatives and results in the field of sustainable development and environmental
        management.
      Since 2003, we have been actively involved in the World
        Economic Forums logistics and transport sector corporate citizenship
        initiative. Our aim is to enhance the reputation of the sector and ourselves.
        We have initiated stakeholder dialogues as part of the Governors meeting
        at the World Economic Forum in 2005. The consolidated results have led
        to a special chapter of the Global Reporting Initiative with industry
        specific key performing indicators, which we will include in our 2006
        social responsibility report. The stakeholder dialogues emphasise the
        need to reduce the negative impact of our industrys activities on
        the environment and to encourage suppliers and subcontractors to comply
        with social responsibility standards.
      In 2005, we entered the Dow Jones Sustainability Index
        as leader of the industrial transportation industry. In 2006 we have retained
        our industry leadership.
      We are strongly focused on integrating a range of international
        standards throughout the group. We ask various organisations to assess
        our progress. PricewaterhouseCoopers provides external verification of
        our reporting data. Agencies and institutes like AccountAbility, the VBDO
        (Dutch Association of Investors for Sustainable Development) and Dutch
        Sustainability Research benchmark our performance against other companies.
        All provide feedback as to how we can improve our performance. Based on
        the feedback on last years
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full-year social responsibility report, our main focus areas
    this year have included: 
    developing and agreeing targets with a focus
      on our priorities: Environment, Health & Safety, Customers and Employees,
    developing a code of conduct for our suppliers,
    organising dialogues with subcontractors,
      and
    integrating social responsibility into our
      internal audits. We have learned from our stakeholder dialogues that our environmental
    performance is a key concern for our stakeholders. We have accordingly developed
    a new initiative, named Driving Clean, which is aimed at purchasing
    environmentally-friendly vehicles and by researching possibilities for retrofitting
    our current fleet with soot filters. This programme, for which we are partnering
    with the United Nations Environmental Programme, has been launched in 2006. We reflect our progress and future plans in our 2006 social
    responsibility report. Our social responsibility report has been prepared
    in accordance with the 2002 Global Reporting Initiative Guidelines. It represents
    a balanced and reasonable presentation of our organisations economic,
    environmental and social performance. Our 2006 social responsibility report
    can be viewed on our website www.tnt.com.  PARTNERSHIP WITH UNITED NATIONS WORLD FOOD
    PROGRAMME In December 2002, the United Nations World Food Programme
    (WFP) and TNT launched a groundbreaking partnership aimed at a single common
    goal: fighting world hunger. WFP is the worlds largest humanitarian
    aid agency. Annually, WFP provides food aid to an average of 90 million people,
    including 56 million hungry children, in more than 80 countries. As the United
    Nations logistics arm for humanitarian aid, it coordinates with other United
    Nations agencies, governments and non-governmental organisations to deliver
    food to the right place, at the right time.
    The partnership with WFP forms the cornerstone of our commitment to the community
    on a global scale. The dedication and enthusiasm of our employees is helping
    the WFP take on one of the greatest logistical challenges of all: helping
    to feed the world. In May 2006, more than 750,000 TNT and WFP personnel with their
  friends and families, participated for the third time in Walk the World,
  a sponsored walk encompassing over 100 countries. Our partnership with WFP consists of three levels of engagement
  and resulted in the following achievements in 2006: 
      knowledge transfer: applying our knowledge
        to enhance, for example, the WFPs supply chain management capabilities,
        increase its fleet management systems and provide air operations training
        for its officials. In total we invested €2.7 million in these kind
        of projects,





      hands-on support: providing organisational
        expertise and assistance in order to respond to emergencies more effectively.
        In 2006 we contributed to WFPs response to emergencies in Pakistan,
        Indonesia, Lebanon and Togo by offering transport services, warehousing
        and specialised personnel deployed in direct support of the WFP. Total
        investment in hands-on support has been over €2 million,
      awareness & fundraising: helping raise
        awareness and funds for WFP. A number of our employees volunteered to
        spend three months building kitchens, latrines and classrooms, among other
        projects, as part of the WFPs Global School Feeding Campaign. In
        2006, our employees raised more than €1.9 million in cash donations
        for the agencys school feeding projects. We are also helping the
        WFP to attract additional funds, new corporate partners and to increase
        awareness in both the public and private sector. The total amount invested
        in this category of projects has been €2.4 million. In 2006, we invested a total of €8.1 million in the partnership
  with WFP. A total of €7.1 million came in the form of in-kind services
  and knowledge transfer projects and €1 million as a cash donation to a
  foundation established by our company to support WFP School Feeding Programmes.


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Back to Contents  RISK FACTORS
      |
      CHAPTER 10 
      I have
          been in services
          for a great deal of
          my working life and
          would not know how
          to do things better.
          My compliments. 2006 ANNUAL REPORT AND FORM 20-F    Back
    to Contents  CHAPTER 10
      |
      RISK FACTORS DEBITELFollowing
        a successful pilot for the delivery of their invoices, debitel has been
        a TNT client since 2004. Printing invoices from a central printer centre,
        debitel needed a single carrier. While other suppliers offered only regional
        solutions, TNT now provides its client with nationwide coverage in Germany
        through its network of fully-owned and partner companies. debitel claims
        to be highly satisfied.Alfred Prasch: There
          are a lot of companies offering delivery services these days, but only
          TNTs portfolio met the demand for our 3.5 million shipments we
          send out each month. In contrast to standard postal carriers and their
          huge, bureaucratic organisations, TNT offers flexibility and can respond
          quickly to any market changes or issues that arise.
        As the ultimate
          test, I like to find out what happens to our deliveries personally and
          have followed a delivery from printing to the doorstep. That way I fully
          understand the system. I have to say I am impressed with the setup.
          Yet both debitel and TNT know that an operation of this size is never
      
      100% faultless,
          much as we would like it to be. The up-side is that when we have issues
          to solve, TNT staff have always been open, honest and fair, and listen
          to what we have to say. So far, we have solved every challenge weve
          come across in developing our partnership.
        Asked whether there
          is anything that can be improved: Not really. TNT has good contacts,
          good processes and good prices. A note regarding the latter, however.
          Price will always play a role in our choice of supplier. On the other
          hand, we understand the balance between quality and cost. You get what
          you pay for and we are satisfied with what we have.
        MR ALFRED PRASCHInformation Technology
          Service Manager 
          debitel AG, Stuttgart 2006 ANNUAL REPORT AND FORM 20-F     Back to Contents      Back to Contents      Back to Contents  77
      CHAPTER 10




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Any of the following risks could have a material adverse effect
  on our financial position, results of operations, liquidity and the actual outcome
  of matters to which the forward-looking statements contained in this annual
  report refer. The risks described below are not the only risks that we are facing.
  There may be additional risks to the ones described below of which we are currently
  unaware. These risks may be common to most companies. There may also be risks
  that we now believe are immaterial, but which may ultimately have a material
  adverse effect as described above. For further information on forward-looking
  statements see the notice on forward-looking statements on page VI of this annual
  report. For further information on our internal risk management and control
  systems see chapter 7. The increasing substitution of alternatives for our mail
    delivery services could reduce the revenues and profitability of our mail
    business and adversely affect our revenues and profitability.Our mail business is an integral part of our total business
    and during 2006 represented 40.4% of our group operating revenues and 59.6%
    of our group operating income. Our postal mail business delivers information
    such as letters and bank statements as well as printed matter such as direct
    mail and periodicals. Technologies such as e-mail and internet (e.g. electronic
    banking) can be used to send or make available such information faster and,
    in many cases, at a lower price than traditional mail services. Due to increased
    substitution, among other factors, traditional mail volumes in the Netherlands
    have decreased in recent years, and we expect this downward trend in mail
    volumes to continue in the next few years. An increase in the use of these
    substitute technologies would likely result in a further decrease in the use
    of our traditional mail services. If substitution continues on a large scale,
    it could adversely affect the volumes, revenues and profitability of our mail
    business and our company as a whole. The further liberalisation of the Dutch and EU postal
    markets could adversely affect our revenues and profitability.In the Netherlands, the process of liberalisation of the postal
    market, which began in the late 1980s, is continuing. This presents a number
    of risks to our mail business. Pursuant to the EU Postal Directive, as of
    1 January 2006 the restriction that reserved the provision of letters up to
    100 grammes exclusively to us (the reserved postal services) was reduced to
    50 grammes. On 13 April 2006 the Dutch government decided to fully liberalise
    the postal market in the Netherlands in 2008 on the condition that there is
    a level playing field with the British and German postal markets. The Dutch
    government also agreed upon the proposal for a new Dutch Postal Act. The proposal
    for a new Dutch Postal Act follows the vision of the Dutch Minister of Economic
    Affairs on the postal market in the Netherlands, which was published in 2004.
    As discussed in greater detail in chapter 13, this new Dutch Postal Act addresses
    a number of issues that are directly relevant to our business, including price
    controls and the scope of the mandatory postal services. The new Dutch Postal
    Act may adversely affect our business, revenues and profitability. For example,
    a possible expanded role for OPTA, the Supervisory Authority for Post and
    Telecommunications in the Netherlands, in controlling our price determination
    for competitors might have an adverse effect on our competitive position.
    The Dutch cabinets decision to fully liberalise the postal market in
    the




Netherlands and the proposal for a new Dutch Postal Act still
  await approval of the Dutch parliament. The new Dutch Postal Act is expected
  to be discussed by parliament during the course of 2007.The new Dutch government
  could have a revised vision for the new Dutch Postal Act. The governmental vision
  could, for example, accelerate further liberalisation of the Dutch and EU postal
  markets leading to unequal market conditions compared to the United Kingdom
  and Germany; increase price control; or cause changes in requirements of the
  Universal Service Obligation. Any of these may adversely affect our business,
  revenues or profitability. On 18 October 2006 the European Commission published its proposal
  to amend the EU Postal Directive. The European Commission proposes to fully
  liberalise the EU postal market per 1 January 2009. The European Commission
  believes that there are alternative methods, other than the current reserved
  area, to finance the Universal Service Obligation (USO). The proposal abolishes
  the reserved area as a USO financing mechanism, but allows for a wide variety
  of other methods, such as tendering, public funds, compensation funds and universal
  service requirements. The European Commission also opts for a model that leaves
  the Member States the discretionary powers to decide upon the scope of the USO.
  The new EU Postal Directive may adversely affect our European Mail Networks
  business. For example, if the new EU Postal Directive provides for insufficient
  guarantees, Member States can abuse national USO regulation to protect their
  national operators. The proposal of the European Commission awaits approval by
  the Council of Ministers and the European Parliament. The EU decision-making
  process is likely to take around one and a half years. Intensifying competition may put downward pressure on
    prices and could have an adverse effect on our revenues and profitability.We compete with many companies and services on a local, regional,
    European and international level. Our competitors include the incumbent postal
    operators of other nations in Europe, Asia, Australia and the United States,
    motor carriers, express companies, logistics service providers, freight forwarders,
    air couriers and others. We expect competition to intensify in the future
    in all of our core business areas.Targeted, aggressive actions by competitors may negatively
    impact our prices. In the Netherlands, our present market share in the mail
    business results from being the former government-operated monopoly. We expect
    our market share to erode due to serious competition and, in the longer term,
    the continuing liberalisation of the Dutch mail regulatory regime. In Europe,
    we continue to face strong competition in both our mail and express businesses.
    Our strategy focuses on a differentiated product and price approach and the
    quality of services related to price rather than on price discounts. Nevertheless,
    increased competition may force prices for our services down and thus cause
    our revenues and profits to decrease. The trends towards liberalisation of European postal markets
  may also result in further consolidation within the mail and express businesses
  as competitors seek to expand into newly opened geographic markets and former
  state postal monopolies enter into acquisitions or alliances in order to


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expand the range and geographic coverage of their services.
    Consolidation within our businesses may result in increased competition and,
    as a consequence, adversely affect our business, revenues and profitability.For example in August 2006, the major Dutch banks, several
    health insurers and some other large companies, each responsible for sending
    high volumes of mail, pooled their interests and set up the Vereniging
    Grootgebruikers Postdiensten (VGP), an organisation to represent their
    mutual interests in the addressed mail market. The VGP claims to represent
    approximately 14% of the addressed mail market. This could adversely affect
    our mail divisions revenue. A sustained economic downturn could adversely affect our
    business and financial condition.Developments and trends in the world economy may have a material
    adverse effect on our financial condition and/or results of operations. Because
    our express delivery business has high fixed costs and greatly depends on
    high volume to recover such costs, a global economic downturn could have a
    material adverse effect on the results of our express delivery business, and
    this would adversely affect the results of our business as a whole. In addition,
    a continued economic downturn could lead to our customers asking for price
    reductions that could adversely affect our margins. A slow economy may also
    result in a continued decline in demand for direct mail in the Netherlands. Unfavourable decisions of competition authorities concerning
    joint ventures, acquisitions or divestments could restrict our growth, strategic
    progress, profitability and ability to compete in the market for our services.As a part of our strategy to focus on our core business, from
    time to time we seek alliances with or acquire shares in companies that complement
    our core business, or we divest part of our business. Any approval of a joint
    venture, an acquisition or a divestment of shares or a business by competition
    authorities may contain certain restrictions or conditions with respect to
    the intended transaction. We may not be able to implement a transaction as contemplated
    in compliance with any restrictions or conditions imposed by the Merger Task
    Force of the European Community or national competition authorities, and these
    restrictions or conditions may negatively affect the revenues and profitability
    of our businesses. If we are unable to implement a foreseen transaction under
    the restrictions or conditions applicable, or if the intended transaction
    is prohibited, we may be unable to develop alternative approaches. This would
    have an adverse effect on our ability to pursue our focus on our core business. Compliance with regulations may result in a significant
    cost increase and limit our flexibility in operating our business and negatively
    affect our costs and profitability.We are subject to a wide variety of complex and stringent aviation,
    transportation, environment, employment and other laws and regulations in
    the Netherlands, the EU and the other jurisdictions where we operate. Existing
    regulations are subject to constant revision, and new regulations are constantly
    being adopted. The interpretation and enforcement of such laws and regulations
    vary and could limit our ability to provide our




services in certain markets. It is uncertain whether existing
    laws and regulations or future regulatory, judicial and legislative changes
    will have a material adverse effect on us, whether national or international
    regulators, competition authorities or third parties will raise material issues
    with regard to our compliance or non-compliance with applicable laws and regulations,
    or whether other regulatory activities will have a material adverse effect
    on our business, revenues and profitability. For example, in our express businesses, we operate various
  types of aircraft throughout Europe and we started a direct service between
  Europe and China in January 2007. As a result we are required to comply with
  a wide variety of international and national laws and regulations. In some of
  the markets in which we operate, regulations have been adopted (or proposed)
  which impose night-time take-off and landing restrictions, aircraft capacity
  limitations and similar measures in order to address the concerns of local constituencies. We rely on night-time operations at our Liège, Belgium
    air express hub for some of our international express business. A curtailment
    of night-time take-offs and landings at any of our key facilities, such as
    Liège, would likely harm our business. Some governments have imposed
    stringent new security measures on air carriers that could result in additional
    operating costs. Our failure to comply with or the costs of complying with
    existing or future government regulation, could negatively affect our revenues
    and profitability. In addition, existing or future regulation on transport
    of goods may negatively affect our ability to perform our services to our
    customers or may increase the costs of providing our services. In our mail
    business in the Netherlands, from time to time discussions come up whether
    or not we should provide access to our mailboxes as a collecting point for
    our competitors. Our competitors currently focus on large volume clients and
    do not compete in the consumer market. Change in this view of competitors
    and support of this view by the regulator could negatively affect our costs
    and profitability. We are exposed to various global and local risks that
    may have a material adverse effect on our financial condition and results
    of operations.We operate around the globe and provide a worldwide service
    with facilities in many countries, which means that we are confronted with
    complex legal and regulatory requirements in many jurisdictions. These include
    tariffs, trade barriers and requirements relating to withholding taxes on
    remittances and other payments. Our international operations are also exposed
    to local business risks and challenges. We face potential difficulties in
    staffing and managing local operations, succession coverage of key individuals
    and talent management. We are exposed to the credit risks of local customers
    and distributors. In many of the jurisdictions in which we operate, in particular
    emerging markets such as China, India, Brazil and Russia, aspects of the developing
    legal system (including the inability to enforce contracts, the lack of an
    independent and experienced judiciary, and similar factors) create an uncertain
    environment for investment and business activity. These difficulties will
    increase as we pursue our strategy to expand our operations to new markets.
    Our overall success as a global business depends, in part, on our ability
    to succeed in different economic, social, political and legal conditions.
    We may not succeed in developing and implementing policies and strategies


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that are effective in the locations where our business is conducted.
  Failure to do so may have a material adverse effect on our financial condition
  and results of operations. We are exposed to currency and interest rate fluctuations
    that could have an adverse effect on our results and financial condition as
    well as on the comparability of our financial statements.A significant part of our total revenues and our operating
    expenses as well as our assets and liabilities are denominated in currencies
    other than euro. As we expand our international operations, we expect that
    an even greater portion of our revenues, costs, assets and liabilities will
    be denominated in non-euro currencies. The exchange rates between these currencies
    and the euro may fluctuate substantially. As a result, currency fluctuations
    could have a material adverse effect on our results and financial condition
    in any given reporting period and may affect the comparability of our financial
    statements from period to period. Part of our borrowings and leases are against floating interest
  rates. These floating interest rates may fluctuate substantially and could have
  a material adverse effect on our results and financial condition in any given
  reporting period. Although we generally enter into hedging arrangements and other
  contracts in order to attempt to reduce our exposure to currency and interest
  fluctuations, these measures may be inadequate or may subject us to increased
  operating or financing costs. A decline in the value of the euro could reduce the value
    of your investment in TNT and any dividends received.Since its introduction on 1 January 1999, the value of the
    euro relative to the dollar has fluctuated widely. Fluctuations in the exchange
    rate between the US dollar and the euro will affect the US dollar equivalent
    of the euro price per American Depositary Share (ADS) and the US dollar value
    of any cash dividends. If the value of the euro relative to the US dollar
    declines, the market price of our ADSs is likely to be adversely affected.
    Any decline in the value of the euro would also adversely affect the US dollar
    amounts received by shareholders on the conversion of any cash dividends paid
    in euro on our ADSs. A downgrade in our credit rating may increase our financing
    costs and harm our ability to finance our operations and acquisitions, which
    could negatively affect our revenues and profitability.A downgrade in our credit rating may negatively affect our
    ability to obtain funds from financial institutions, retail investors and
    banks and increase our financing costs by increasing the interest rates of
    our outstanding debt or the interest rates at which we are able to refinance
    existing debt or incur new debt. On March 10, 2006, Standard & Poors
    Ratings Service (S&P) lowered its corporate credit ratings on TNT to A-
    long-term / A-2 short-term from A/A-1.
    On 25 September 2006 S&P issued an updated Issuer Credit Rating. S&P
    maintained the TNT corporate credit ratings on A- long-term /
    A-2 short-term. The S&P outlook is negative. On 27 March 2006
    Moodys




Investors Service downgraded the issuer and senior unsecured
  debt ratings of TNT N.V. to A3 from A2, and the CP rating
  of TNT Finance BV, 100% owned and guaranteed finance subsidiary of TNT, to Prime-2
  from Prime-1. On 12 July 2006 Moodys Investors Service issued an updated
  TNT credit opinion. The issuer and senior unsecured debt ratings of TNT N.V.
  continued to be A3, and the CP rating of TNT Finance BV was kept
  at Prime-2. The Moodys outlook for the ratings is stable. We depend on a number of infrastructure facilities for which
    we have limited or no comparable back-up facilities, so if operations were
    disrupted at one or more of these facilities, our business and results of
    operations would suffer.A portion of our infrastructure is concentrated in single locations
    for which we have limited or no comparable back-up facilities or very expensive
    fall back scenarios in the event of a disruption of operations. An example
    of this is our European express air hub in Liège, Belgium. The operation
    of our facilities involves many risks, including power failures, the breakdown,
    failure or substandard performance of equipment, the possibility of work stoppages
    or civil unrest, natural disasters, catastrophic incidents such as airplane
    crashes, fires and explosions and normal hazards associated with operating
    a complex infrastructure. If there were a significant interruption of operations
    at one or more of our key facilities and operations could not be transferred
    or only at very high costs to other locations we might not meet the needs
    of our customers, and our business and operating results would be adversely
    affected. Incidents resulting from our transport of hazardous materials
    or a major incident involving our sorting centres, warehousing facilities,
    air or road fleet may adversely affect our revenues, profitability and reputation.We transport hazardous materials for a number of our customers
    in the automotive, biomedical and chemical industries. The hazardous consignments
    include airbags, batteries, paint, blood samples, medical substances, dry
    ice and chemicals. As part of our express, freight management and mail services,
    we may also transport hazardous or dangerous goods without having been notified
    about the nature of the goods we transport. We face a number of risks by transporting
    these materials, such as personal injury or loss of life, severe damage to
    and destruction of property and equipment and environmental damage. Incidents
    involving these materials could result from a variety of causes including
    sabotage, terrorism, accidents or the improper packaging or handling of the
    materials. If a significant incident occurred our operations could be disrupted
    and we could be subject to a wide range of potentially large civil and criminal
    liabilities. This could negatively affect our revenues and profitability.
    A significant incident, particularly a well-publicised incident involving
    potential or actual harm to members of the public, could also hurt our reputation.


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As an owner and operator of a large fleet of aircraft and trucks
  we are involved in activities which expose us to liability in the case of a
  major air or road incident, not only for our employees, facilities and third
  party property, but also for the general public. An incident involving one of
  our aircraft or vehicles could cause significant loss of life and property and
  could adversely affect our reputation and the price of our shares. A major incident caused by hazardous materials could lead to
  additional measures or restrictions imposed on us by local or governmental authorities.
  Such additional measures or restrictions could disrupt our processes and may
  adversely affect our revenues, profitability and reputation. We may not accurately forecast our future infrastructure
    requirements, which could result in excess capacity or insufficient capacity
    and negatively affect our revenues and profitability.In order to maintain our market position and grow our business
    we must make large on-going investments in infrastructure such as aircraft,
    trucks and depots. We base our infrastructure investments on forecasts of
    our future capacity requirements. It may be difficult to forecast accurately
    our future requirements, since they are based on a large number of factors,
    including factors beyond our control such as general economic conditions and
    changes in governmental regulation. As a consequence, there may be a mismatch
    between our investment and our actual requirements. If we underestimate our
    future capacity requirements we will not be able to meet the needs of our
    customers and could lose business, market share, revenues and profits. If
    we overestimate our future needs, or if major contracts are cancelled by customers,
    we will experience costly excess capacity and this could adversely affect
    our profitability. Strikes, work stoppages and work slowdowns by our employees
    and the terms of new collective labour agreements could negatively affect
    our revenues and profitability.The success of our business also depends upon avoiding strikes,
    work stoppages and slowdowns by our employees. Industrial action by large
    unions or even relatively small but key groups of our employees, such as airline
    pilots, could seriously disrupt our operations. Industrial action may occur
    for reasons unrelated to our collective labour agreements with a particular
    union or group of employees. For example, our employees may refuse crossing
    picket lines established by other unions from other companies. Our collective
    labour agreement with approximately 57,000 employees in the Netherlands is
    subject to a renewal in October 2007. If we are not able to renew this agreement
    or other key agreements with our employees, and a strike, work stoppage or
    work slowdown occurs, our revenues and profitability could be adversely affected. Our business may be negatively affected by the terms of collective
  labour agreements that we conclude with our employees. These terms could include
  increases in compensation and employee benefits, work rules less flexible than
  those of our competitors, and limitations on future workforce reductions and
  other factors that make our




workforce less mobile. Our profitability could suffer if we
  are not able to conclude collective labour agreements on satisfactory terms
  with our employees. The integration of our newly acquired businesses involves
    significant challenges and costs and may not be successful, which could adversely
    affect our results of operations.We have entered into a number of significant acquisitions in
    recent years with growth through acquisitions remaining a key element of our
    strategy. We have also announced the acquisition of several other companies
    which will be finalised in 2007. The integration of newly acquired businesses
    involves inherent costs and uncertainties that include the effect on the acquired
    businesses of integration into our organisation and culture and the availability
    of and demands on management resources to oversee the integration and manage
    the newly acquired businesses. The integration of the international companies
    we have acquired has resulted in significant challenges and costs in the areas
    of accounting, finance, operations, IT, strategy and human resources. If an
    existing or future integration effort is delayed or is not successful we may
    incur additional costs, the value of our investment in the acquired company
    may decrease significantly and our growth strategy may not be successfully
    achieved. Any material delays, unexpected costs or other problems encountered
    in connection with integrating newly acquired businesses could have an adverse
    effect on our revenues and profitability. Changes in market conditions and/or relationships with our
    joint venture partners may require us to revise our strategies, which could
    adversely affect our results of operation.Changes in market conditions may lead us to revise the strategies
    in which businesses were acquired or joint ventures were concluded. Revised
    strategies may lead us to demerge these businesses or end these joint ventures.
    The resulting employment reduction and other significant restructuring costs
    could impact our profitability. The legal concept of limited liability for loss or damage
    of goods we carry is increasingly being challenged and this may result in
    increased exposure to claims.We transport goods under the conditions of the international
    conventions in respect of the carriage of goods by air (the Warsaw Convention)
    and by road (the CMR Conventions). These conventions contain provisions that
    limit our liability in the event that we lose or damage shipments belonging
    to our customers. In the past this principle was generally accepted as normal
    business practice, but in recent years the courts and regulators in an increasing
    number of jurisdictions are more sympathetic to allegations of gross
    negligence or lack of due care, thereby setting aside the
    principles of limited liability. This trend exposes us to more and increased
    loss and damage claims. Furthermore, a number of major customers are no longer
    prepared to accept these established limits of liability and these factors,
    together with the increased value of the goods we carry, have resulted in
    a significant increase in our financial exposure to claims. If this trend
    continues, it could adversely affect our profitability.


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|CHAPTER 10 | | | RISK FACTORS | 82
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Determination that our subcontractors were to be considered
    our employees would affect our current business model, causing our operating
    expenses to rise and our net income to suffer.In various jurisdictions, we use subcontractors to perform
    aspects of our business, such as picking-up and delivering parcels, as is
    common practice in our industry. In certain jurisdictions, the authorities
    have brought criminal and/or civil actions alleging that our subcontractors
    or their employees are to be regarded as our own unregistered employees. If
    these allegations were upheld by a court, we would incur, in addition to criminal
    fines, costs such as social security contributions, wage taxes and overtime
    payments in respect of such employees. Subcontractors could also bring civil
    actions seeking the recharacterisation of subcontractor relationships in employment
    contracts. If these actions were successful, our operating expenses would
    rise and our net income would suffer. Our ongoing taxation investigations and analyses may end
    in material additional liabilities that could adversely affect our financial
    position, results and cashflows.In early 2004 our audit committee, on behalf of our Supervisory
    Board, conducted an independent investigation regarding representations made
    to the UK tax authorities and to our independent auditors, PricewaterhouseCoopers,
    with respect to certain UK tax matters originally arising in the late 1990s
    relating to one of our UK subsidiaries. In August 2004 we submitted a report
    to the UK tax authorities pursuant to a procedure under UK law designed to
    ensure full disclosure of all relevant information to the UK tax authorities.
    In the first quarter of 2005 we reached a settlement with the UK tax authorities
    in relation to those matters without any further negative impact on our tax
    position in 2005. As previously disclosed, since August 2004, we have been preparing
  an addendum to our original report to the UK tax authorities that cover UK tax
  matters that were not the subject of the original investigation. In 2006 we
  submitted a substantially advanced draft of available information and related
  tax conclusions required by the UK tax authorities and started discussions with
  them on these tax matters. The major issue being discussed with the UK tax authorities
    concerns whether some of our non-UK subsidiaries might have been resident
    in the United Kingdom prior to the acquisition of TNT Limited in December
    1996 and, if so, whether capital gains tax would have been due if the tax
    residency of those subsidiaries later moved to another European country.After having investigated the matter we are of the opinion
    that the relevant subsidiaries were never UK resident But even if they were
    seen to be UK resident, we believe that the imposition of such a capital gains
    tax would be impermissibly discriminatory under EU law. Our opinion has been
    and is supported by strong external specialist advice. We have been in discussion with the UK tax authority to come
  to an agreement on these issues. While to date no assessments




relating to the item under discussion have been raised, the
  UK tax authority will issue initial assessments, as we understand it, as a matter
  of procedure, before they and we can effectively continue to seek an agreed
  solution. TNT will appeal against the initial assessments. The amounts raised
  in such initial assessments could exceed the realistic range of our estimated
  total contingent liability as disclosed below. It is customary in the UK with
  respect to such initial assessments that the actual obligation for payment will
  be deferred during the litigation and appeal period until either an agreement
  is reached or a final assessment is raised. On the basis of our ongoing discussions
  with the UK tax authorities and the strength of our position, we currently expect
  either these matters to be settled in 2007 or if necessary litigation to be
  commenced. We currently believe that it is unlikely that we will incur
  an additional liability related to the above matters beyond what we have accrued
  to date. We disclosed in our 2005 annual report an estimate of a realistic
  range to reflect our total contingent liability, including potential penalties
  and interest, of €150 - €550 million, based on a probability-weighted
  assessment of our estimated total theoretical liability. In April 2006 we disclosed
  that we reduced the range to €100 - €250 million which we continue
  to believe to be the realistic range to reflect our contingent liability. This
  range represents some 25-30% of the non-probability weighted estimated theoretical
  maximum liability - in the highly unrealistic scenario where all of our tax
  positions under investigation or analysis were successfully challenged, any
  expected initial assessments were unsuccessfully challenged by us, we and all
  relevant tax authorities were unable to reach any settlement whatsoever, and
  all of our positions were rejected by all relevant courts. We believe this is
  highly unlikely. Our estimate involves a series of complex judgments about past
    and future events and relies on estimates and assumptions. Although we believe
    that the estimates and assumptions supporting our positions are reasonable
    and are supported by external advice, our ultimate liability in connection
    with these matters will depend upon the assessments raised, the result of
    any negotiations with the relevant tax authorities and the outcome of any
    related litigation.If the actual taxes, penalties and interest imposed exceed
    the amounts we have accrued, it could adversely affect our financial position,
    results and cash flows. Our restructurings of operations and other measures we take
    to reduce costs, including forced lay-offs, may not achieve the results we
    intend and may adversely affect our revenues and profitability.From time to time we restructure, redesign or integrate various
    aspects of our operations in an effort to achieve cost savings, flexibility
    and other efficiencies. Our restructuring of operations and other cost reducing
    measures may not achieve the results we intend and may invoke restructuring
    and other costs and changes to our business that adversely affect our revenues
    and profitability. New initiatives as described in our Masterplans may require
    forced lay-offs. If we are not able to reach agreement with Unions on these
    Masterplans, our profitability could suffer due to delays in or not reaching
    planned savings.


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A downturn in capital markets may decrease the value of
    investments made in these markets for our pension schemes and a decline in
    interest may increase the fair value of our pension liabilities, which in
    turn could require significant additional funding by us.Our main Dutch defined benefit pension scheme has total assets
    of over €4 billion, some of which are funded by investments held in equities
    with a view to benefiting from capital appreciation. The value of these securities
    may be volatile and a downturn in the capital markets could significantly
    reduce the value of these assets. In addition a decline in interest may increase
    the fair value of our pension liabilities. Should the coverage ratio of assets
    divided by liabilities fall below the minimum funding requirements prescribed
    by De Nederlandsche Bank (DNB), into which the Independent Supervisory Authority
    for Pensions and Insurance was merged during 2004, we will be required to
    increase our contributions to the funds. If the assets were to lose a substantial
    amount of their value or if, as a result of a decline in interest, our liabilities
    would substantially increase, or both, we might be required to make large
    payments into the funds, which would adversely affect our liquidity over a
    number of years. Employee misconduct could result in financial losses, the
    loss of clients and fines or other sanctions by the governments of the countries
    in which we do business.We may be unable to prevent our employees from engaging in
    misconduct, fraud or other improper activities that could adversely affect
    our business and reputation. Misconduct could include the failure to comply
    with applicable law or our business principles, or a breach of confidentiality.
    The precautions we take to prevent and detect this activity may not be effective.
    Our investigations of suspected fraudulent activity could expose us to additional
    sanctions if an investigation is ineffective or hampered by local legal restrictions.
    As a result of employee misconduct, we could face fines and penalties imposed
    by governments in the countries in which we do business. Any such fines or
    penalties could lead to adjustments to our financial statements and resulting
    liabilities which could reduce our profitability. In addition, negative publicity
    in relation to employee misconduct could negatively affect our reputation,
    harm our ability to recruit employees and managers and reduce our revenues. Changes in markets and our business plans have resulted
    and may in the future result in substantial write-downs of the carrying value
    of our assets, thereby reducing our net income.Our regular review of the carrying value of our assets(including
    our intangible, tangible and financial fixed assets) has resulted, from time
    to time, in significant impairments, and we may in the future be required
    to recognise additional impairment charges. Events in the markets where we
    conduct our businesses, including significant declines in stock prices, market
    capitalisations and credit ratings of market participants, as well as our
    ongoing review and refinement of our business plans, have resulted and may
    result in further substantial impairment write-downs of our intangible or
    other assets at any time in the future. In addition, we have been and may be required in the future
    to recognise increased depreciation and amortisation charges if




we determine that the useful lives of our fixed assets are
  shorter than we originally expected. Such changes would have the effect of reducing
  our net income. Increased security and anti-terrorism requirements could
    impose substantial costs on us, especially at TNT Express.As a result of increased concerns about global terrorism and
    aviation security, governments and airline operators around the world are
    adopting or are considering adopting stricter security requirements that will
    increase operating costs for businesses, including those in the transportation
    industry. For example, in October 2006 the European Union adopted new rules
    enhancing many of the security requirements for air cargo on both passenger
    and all-cargo aircraft. We cannot fully determine the effect that these new
    rules or changed policies will have on our cost structure or our operating
    results. It is reasonably possible, however, that these rules or other future
    security requirements for air cargo carriers could impose material costs on
    us. We face risks related to health epidemics and other outbreaks
    of contagious diseases, including Pandemic Influenza, avian influenza, or
    avian flu, and SARS.Our business could be adversely affected by the effects of
    avian flu, SARS or another epidemic or outbreak. Since 2005 the World Health
    Organisation and other health monitoring bodies have reported outbreaks of
    a highly pathogenic avian flu, caused by the H5N1 virus, in certain regions
    of Asia and Europe. In 2005 and 2006, there have been reports on the occurrences
    of avian flu in various parts of China, Indonesia, Thailand and other South
    East Asian countries, including a few confirmed human cases. An outbreak of
    avian flu in the human population could result in a widespread health crisis
    that could adversely affect the economies and financial markets of many countries,
    particularly in Asia. Additionally, any recurrence of SARS, a highly contagious
    form of atypical pneumonia, similar to the occurrence in 2003 which affected
    China, Hong Kong, Taiwan, Singapore, Vietnam and certain other countries,
    would also have similar adverse effects. These outbreaks of contagious diseases,
    and other adverse public health developments in China, would have a material
    adverse effect on our business operations. These could include our ability
    to ship consignments or otherwise make deliveries of products originating
    in China, as well as temporary closure of our offices or other facilities.
    Such closures or travel or shipment restrictions would severely disrupt our
    business operations and adversely affect our financial condition and results
    of operations. We have not yet adopted any written preventive measures or
    contingency plans to combat any future outbreak of avian flu, SARS or any
    other epidemic.




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|CHAPTER 10 | | | RISK FACTORS | 84
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Our operations and earnings are subject to risks related
    to the impact of climate change.We believe that concern about climate change will
    lead to government action that will require us to further manage emissions
    from our ground and air fleet. As such, there is a risk to future operations
    and a compliance risk for existing facilities and our fleet, if we are not
    able to demonstrate adequate emissions management. Realisation of these risks
    could have an adverse impact on our operational performance and financial
    position.






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| | OTHER FINANCIAL INFORMATION ON THE
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| | Because
        I try to lead
        by example, people are 
        willing to work hard 
        for me.
|- | ------------------------------------------------------------------------------------------------------------
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|CHAPTER 11 | | | OTHER FINANCIAL INFORMATION ON THE COMPANY | 
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| | TNT
      EXPRESS UK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
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| | Jon has
      something of a complex character. When you first meet him, he is extremely
      polite and reserved, even a little shy. It makes you wonder how he manages
      to lead a team of 20 people. Then, if you happen to be in his vicinity when
      he receives a problem phone call from work, it all becomes clear. Out of
      the blue, he reveals another side of the English character  the bulldog.
      Hard as nails, hell fight until he gets what he wants. Maybe thats
      why he was able to deal with a situation none of us would wish upon our
      worst enemies. Driving to a customer in July 2005, Jon found himself in
      the immediate vicinity of the worst terrorist attack ever to hit London.
      Instead of heading straight home like many of us would have done, Jon continued
      and completed his work for the day, coordinating the collection of cheques
      and internal mail for The Royal Bank of Scotlands 250 London branches.
      He still talks about it as if it was nothing. Typically English. | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
| | Jon: Sure it
        was scary. The whole mobile phone network went down immediately so I didnt
        know where my friends and family were. But then we had our job to do.
        We had to get to the banks branches. After assessing the number
        of drivers available, the first thing to do was to devise and coordinate
        an emergency plan. The first problem was the fact that many of the roads
        were cordoned off. We used motorbikes to make one collection at the end
        of the day from every branch. The cheques were consolidated and trunked
        to two alternative clearing houses - one 50 miles away. While one group
        of drivers manned the trunk runs, the others set out across the city to
        make the collections. In the end, we managed to reach all but four of
        the branches. For those four, we tried to explain to the police what we
        had to do but they werent having any of it.                                                                                               |  | Throughout the
        day, I was in touch via my hotel phone with people from the bank, including
        some that I didnt know. Turns out they were Senior Directors who
        were worried that their customers would be dissatisfied. I think they
        might have understood if we had told them that we were unable to collect
        their cheques that day, but the team worked hard, under tough conditions.
        In the end, there was a tense instance at around 9:20 p.m. before we received
        a phone call saying that everything got through. That was a good moment.
        I am told that RBS still talks about it with their customers. Yes, Im
        pretty sure theyre impressed with what we did for them that day!

      JON STOCKTONTNT Express
        UK, Contract General Manager Royal Bank of Scotland Contract, 34 years
        old, married, 3 children | 
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|CHAPTER 11 | | | OTHER FINANCIAL INFORMATION ON THE COMPANY | 86
|          

|This chapter provides some other financial information
        on the company, in addition to the information set out in chapter 12,
        in particular with regard to cash flow, liquidity, capital resources and
        critical accounting policies.
       On 6 December 2005 we announced a strategy to focus on
        our core competency of providing delivery services by expertly managing
        delivery networks and our intention of selling the logistics business.
        On 23 August 2006 we announced that we have signed a Sale and Purchase
        Agreement on the sale of the logistics business. On 4 November 2006 we
        completed the sale of the logistics division to affiliates of Apollo Management
        L.P. On 30 October 2006 we announced the decision to divest our freight
        management business. On 16 November 2006 we signed a Sale and Purchase
        Agreement to sell our freight management business unit to the French logistics
        service provider Geodis SA. On 5 February 2007 we completed the sale. |  | We refer to Note 8 of our consolidated financial statements
        for further information on the sale of logistics and freight management.
       Our logistics division was reported as discontinued operations/
        assets held for sale as at 31 December 2005. In our statement of income
        for 2006, 2005 and 2004 we have presented the net result of our discontinued
        logistics business on a separate line Profit/(loss) from discontinued
        operations.
       Our freight management business is also reported as discontinued
        operations/assets held for sale. Consequently, in our statement of income
        for 2006, 2005 and 2004 we have presented the net result of our discontinued
        freight management business on a separate line Profit/(loss) from
        discontinued operations. We have restated the comparative figures
        for the 2005 and 2004 statements of income and cash flow to reflect the
        presentation of the freight management business as a discontinued operation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FINANCIAL CONDITION

|                                                                                                         | Year ended and position at 31 December |  
|-------------------------------------------------------------------------------------------------------- | -------------------------------------- | -
|                                                                                                         |                                        |  
|                                                                                                         | 2006                                   |  
|                                                                                                         |                                        |  
|                                                                                                         | US$                                    |  
|                                                                                                         |                                        |  
|BALANCE SHEETS                                                                                           |                                        |  
|                                                                                                         |                                        |  
|Non-current assets                                                                                       | 4,985                                  |  
|                                                                                                         |                                        |  
|Current assets                                                                                           | 2,800                                  |  
|                                                                                                         |                                        |  
|Assets held for sale                                                                                     | 540                                    |  
|                                                                                                         |                                        |  
|Total assets                                                                                             | 8,325                                  |  
|                                                                                                         |                                        |  
|Equity                                                                                                   | 2,650                                  |  
|                                                                                                         |                                        |  
|Non-current liabilities                                                                                  | 2,127                                  |  
|                                                                                                         |                                        |  
|Current liabilities                                                                                      | 3,355                                  |  
|                                                                                                         |                                        |  
|Liabilities related to assets classified as held for sale                                                | 193                                    |  
|                                                                                                         |                                        |  
|Total liabilities and equity                                                                             | 8,325                                  |  
|                                                                                                         |                                        |  
|Net return on equity 1(%)                                                                                | 33.4                                   |  
|                                                                                                         |                                        |  
|Equity as % of total liabilities and
      equity                                                        | 31.8                                   |  
|                                                                                                         |                                        |  
|CASH FLOW STATEMENTS CONTINUING OPERATIONS                                                               |                                        |  
|                                                                                                         |                                        |  
|Net cash from operating activities                                                                       | 1,131                                  |  
|                                                                                                         |                                        |  
|Net cash used in investing activities                                                                    | 1,409                                  |  
|                                                                                                         |                                        |  
|Net cash used in financing activities                                                                    | (2,840                                 | )
|                                                                                                         |                                        |  
|Changes in cash and cash equivalents                                                                     | (300                                   | )
|                                                                                                         |                                        |  
|CASH FLOW STATEMENTS DISCONTINUED OPERATIONS                                                             |                                        |  
|                                                                                                         |                                        |  
|Net cash from operating activities                                                                       | (83                                    | )
|                                                                                                         |                                        |  
|Net cash used in investing activities                                                                    | (40                                    | )
|                                                                                                         |                                        |  
|Net cash used in financing activities                                                                    | 48                                     |  
|                                                                                                         |                                        |  
|Changes in cash and cash equivalents                                                                     | (75                                    | )
|                                                                                                         |                                        |  
|(in millions, except percentages)                                                                        |                                        |  
|1 The profit attributable to the equity holders of the
      parent as a percentage of the total equity. |                                        |  

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|87 | OTHER FINANCIAL INFORMATION ON THE
        COMPANY | | | CHAPTER 11
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CASH FLOW DATA

Cash and cash equivalents (excluding discontinued operations)
  totalled €297 million at 31 December 2006 (€559 million 31 December
  2005). For more detailed information on cash flows from discontinued operations
  we refer to chapter 5. The following table provides a summary of cash flows from
  continuing operations for the past three years:


|                                                        | Year ended at 31 December |  
|------------------------------------------------------- | ------------------------- | -
|                                                        |                           |  
|                                                        | 2006                      |  
|                                                        |                           |  
|                                                        | US$                       |  
|                                                        |                           |  
|NET CASH FROM OPERATING ACTIVITIES                      |                           |  
|                                                        |                           |  
|Cash generated from operations                          | 1,766                     |  
|                                                        |                           |  
|Interest paid                                           | (263                      | )
|                                                        |                           |  
|Income taxes paid                                       | (372                      | )
|                                                        |                           |  
|NET CASH USED IN INVESTING ACTIVITIES                   |                           |  
|                                                        |                           |  
|Net cash used for acquisitions and disposals            | 1,657                     |  
|                                                        |                           |  
|Net cash used for capital investments and disposals     | (413                      | )
|                                                        |                           |  
|Net cash used for other investing activities            | 165                       |  
|                                                        |                           |  
|NET CASH USED IN FINANCING ACTIVITIES                   |                           |  
|                                                        |                           |  
|Net cash used for dividends and other changes in equity | (2,609                    | )
|                                                        |                           |  
|Net cash from debt financing activities                 | (231                      | )
|                                                        |                           |  
|                                                        |                           |  
|                                                        |                           |  
|CHANGES IN CASH AND CASH EQUIVALENTS                    | (300                      | )
|                                                        |                           |  
|(in millions, except percentages)                       |                           |  

NET CASH FROM OPERATING ACTIVITIES2006The net cash from operating activities decreased
    by €112 million from €969 million in 2005 to €857 million in
    2006. After correction of the gross up in 2006 of interest paid by €89
    million, due to a new set up of our cash pool structure and fully offset by
    the same amount of interest received, and correction of the repayment of €162
    million of taxes in 2005 relating to previous years, the net cash from operating
    activities would have increased by €139 million compared to 2005. The increased cash generated from operations reflects an improved
  profit before income taxes of €77 million compared to 2005. In 2006 profit
  before income taxes contributed €1,223 million and €1,541 million
  if adjusted for the non-cash impact of depreciation, amortisation and impairments,
  an increase of €92 million or 6.3% compared to 2005 (€1,449 million). The changes in pension liabilities of €110 million (2005:
  121; 2004: 256) reflects the total non-cash charges for the defined benefit
  pension schemes of €120 million, lowered by our total cash contributions
  of €230 million to various pension funds. The majority of the cash contributions
  are for our Dutch employees who fall under our collective labour agreement.
  Of the total cash contribution an amount of €107 million is for pensions
  which fall under the transitional plan of our Dutch collective labour agreement
  and which are directly paid by TNT (see note 10 to our consolidated financial
  statements). In total the cash contributions are €34 million lower than
  last year, mainly due to €59 million lower contributions as prescribed
  by the minimum funding requirements of DNB, and a reduced number of eligible
  employees.




In 2006 the other provisions increased as a consequence
  of a higher provision for claims and indemnities compared to last year of €64
  million. This reflects amongst others the disposal of various businesses. In 2006 the net working capital increased by €90 million
  compared to an increase of €178 million in 2005. The increase is mainly
  a result of organic growth and acquisitions. The movements in net working capital
  cannot be directly reconciled to the balance sheet as a consequence of the treatment
  of the logistics business as a discontinued operation as at the end of 2005
  and the freight management business as at 31 December 2006. The total cash out flow for interest paid in 2006 is €199
  million. In 2006 interest paid increased by €89 million, due to new cash
  pool structure. This largely explains the variance in interest paid compared
  to 2005. Interest paid also includes interest on our long term borrowings of
  €53 million, interest payments of  €25 million relating to an increase of short term debt,
  realised hedge costs on foreign exchange hedges of €17 million and interest
  paid on taxes of €7 million. Interest and similar expenses in the statements of income amounted
  to €246 million. The difference with the interest paid can be explained
  mainly by interest expense of €21 million relating to our discontinued
  logistics and freight management business (included in financing relating to
  our discontinued operations) an increased accrual for interest related to late
  tax payments of €14 million and interest expenses relating to fair value
  adjustments on hedges of 9 million.


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|CHAPTER 11 | | | OTHER FINANCIAL INFORMATION ON THE COMPANY | 88
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The cash outflow of the total tax payments amounted to €282million (2005: 125; 2004: 403).The net amount of income
  taxes paid in 2005 includes €162 million repayments by the Dutch tax authority
  of taxes over previous years after it was concluded that preliminary payments
  were too high. 2005In 2005 net cash provided by operating activities
    was €969 million, which is an increase of 40.4 % compared to 2004 (€690
    million). Profit before income taxes contributed €1,146 million,
  or €1,449 million if adjusted for the non-cash impact of
  depreciation, amortisation and impairments, an increase of €61 million
  or 4.4% compared to 2004 (€1,388 million). The changes in pension liabilities of €122 million reflect
    the total non-cash charges for the defined benefit pension schemes of €141
    million, lowered by our total cash contributions of €165 million to various
    pension funds, the majority of which for our Dutch employees, who fall under
    our collective labour agreement, plus our cash contributions of €98 million
    for pensions, which fall under the transitional plan of our Dutch collective
    labour agreement and which are directly paid by TNT (see note 10 to our consolidated
    financial statements). In total the cash contributions are €169 million
    lower than last year, mainly due to contributions of €142 million related
    to the Personal Senior Arrangement in 2004 and due to €32 million lower
    contributions as prescribed by the minimum funding requirements of DNB, which
    amounted to €59 million in 2005. The non-cash impact of €52 million from other provisions
    included provisions related to employee benefits mainly in express, provisions
    taken for the uninsured part of the damage caused by major fires in three
    different warehouses in the United States, Spain and the United Kingdom, increased
    provisions for employer liability in the United Kingdom and reorganisation
    provisions, mainly in mail. Working capital increased by €178 million in 2005, compared
  to a decrease of €15 million in 2004. Most of the increase of the accounts
  receivable position related to an increase of trade receivables by €143
  million due to a combination of additional revenue and increased debtor days.
  Trade payables negatively impacted the cash flow by €85 million as a result
  of a decrease of creditor days compared to last year. Other current liabilities
  increased by €54 million, including higher accruals for subcontractors
  and claims. Interest and similar expenses in the statements of income amounted
  to €117 million, including non-cash hedge results of €21 million. The cash outflow for interest paid totalled
  €80 million. Income taxes paid was €125 million. The net amount of
  income taxes paid included €162 million repayments by the Dutch tax authority
  of taxes over previous years after it was concluded that preliminary payments
  were too high and due to a decrease of the Dutch statutory tax rate from 34.5%
  in 2004 to 31.5% in 2005.




2004In 2004, net cash provided by operating activities
    was €690 million. Profit before income taxes contributed €1,092 million,
  or €1,388 million if adjusted for the non-cash impact of
  depreciation, amortisation and impairments. The changes in pension liabilities of €256 million reflect
    the total non-cash charges for the defined benefit pension schemes of €89
    million, the non-cash costs related to the Personal Senior Arrangement of
    €87 million and total cash payments of €432 million. Cash contributions
    to various pension funds, the majority of which are for our Dutch employees
    who fall under our collective labour agreement, and the pension plan payments,
    which fall under the transitional plan, totalled €290 million, of which
    €91 million was contributed as prescribed by the minimum funding requirements
    of DNB. The remaining cash contribution of €142 million related to the
    Personal Senior Arrangement. The non-cash impact of €13 million from other provisions
  was primarily the result of additions, which were partly offset by releases
  and withdrawals. Working capital decreased by €15 million in 2004. The
  favourable movements of inventory, other current assets, trade payables and
  other current liabilities were partly offset by an increase of accounts receivable,
  due to an increase of trade receivables of €38 million. The cash outflow for interest paid totalled €85 million.
  Income taxes paid was €403 million. NET CASH USED IN INVESTING ACTIVITIES 2006In 2006, the total payments net of cash for acquisitions
    of group companies amounted to €89 million. Most acquisitions took place
    in our express division (€58 million), the largest being ARC India Private
    Ltd., India (€32 million), TG Plus Transcamer Gomez S.A.U., Spain (€22
    million) and ISH Nocni Express, Czech Republic (€3 million). Mail acquired
    for a total amount of €31 million, mainly related to PostCon Deutschland
    GmbH, Germany (€12 million), CBS City Briefservice GmbH, Germany (€4
    million), Mail Express GmbH, Germany (€3 million), Ridas Sicherheits-
    und Handelsgesellschaft m.b.H, Germany (€3 million), TWM Italia Srl.,
    Italy (€2 million) and Turbo P.O.S.T. GmbH, Germany (€1million)
    (we also refer to note 28 of our Consolidated financial statements). The investments in associated companies primarily related to
  additional capital contributions in Logispring Investment Fund Holding B.V.
  and amounted to €20 million. On 4 November 2006, we completed the sale of the majority of
  our logistics division to Louis Topco Limited, a company formed and managed
  by Apollo Management International L.P. The proceeds from the transaction amount
  to €1,335 million.


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|89 | OTHER FINANCIAL INFORMATION ON THE
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Furthermore, the following investments have been sold during
    2006: 
    100% of the outstanding shares in Cendris
      Document Management B.V. (€19 million),
    100% of the outstanding shares in ID Company
      Fashion B.V. (€8 million),
    our 50% shareholding in Mailprofs Employment
      B.V. (€2 million) and
    other disposals for an amount of €1 million. In 2006, capital expenditures on property, plant and equipment
  amounted to €277 million (2005: 230; 2004: 217). Of this amount, €200
  million (2005: 140; 2004: 136) related to the express business, €74 million
  (2005: 80; 2004: 75) related to mail, and €3 million (2005: 10 ; 2004:
  6) to non-allocated. The capital expenditures on intangible assets of €103
  million (2005: 80; 2004: 59) mostly related to software. In 2006, net capital
  expenditures were funded primarily by cash generated from operations. Proceeds from the sale of property, plant and equipment in
  2006 totalled €65 million (2005: 43; 2004: 14), which mainly related to
  the sale of several buildings from TNT Real Estate B.V. and TNT Real Estate
  Development B.V.(€44 million). In 2005 the proceeds from the sale of property,
  plant and equipment related to several buildings from TNT Real Estate B.V. and
  TNT Real Estate Development B.V. (€23 million) and buildings and equipment
  from the joint venture Postkantoren B.V. (€7 million) in the mail segment
  and equipment in our express operations in the United Kingdom (€4 million). Proceeds from the disposal of intangible assets in 2006 amounted
  to €2 million (2005: 2; 2004: 2). In 2006 interest received amounted to €111 million of
  which  €89 million is due to new cash pool structure. This largely
  explains the variance in interest received compared to 2005. Interest received
  also includes interest on short term deposits and bank balances of €12
  million and realised hedge income on foreign exchange hedges of €6 million. Interest and similar income in the statements of income amounted
  to €199 million. The total cash in flow for interest received is €111
  million. The difference between interest income and interest received can be
  mainly explained by interest income of €74 million relating to our discontinued
  logistics and freight management business (included in financing relating to
  our discontinued operations) and interest income relating to fair value adjustments
  on hedges of €9 million, also not having a cash effect. 2005In 2005, the total payments for acquisitions of
    group companies amounted to €35 million and no cash was acquired as part
    of the total acquisitions. Most acquisitions took place in our mail division
    (€30 million), the largest being Euro Mail B.V. (€18 million), the
    remaining shares in Circular Distributors (€6 million) and Rheinkurier
    GmbH (€3 million). Express acquired for a total amount of €5 million,
    mainly related to Door-to-Door d.o.o. and Asinus d.o.o. and the remaining
    share of our business in Israel. During 2005 all proceeds or payments related
    to acquisitions were in cash. The investments in associated companies primarily
    related to additional capital contributions in one of our associates and amounted
    to €13 million.




During 2005, we disposed our interest in Global Collect B.V.
  for a negative amount of €5 million, which consists of the total consideration
  received of €4 million and €9 million cash that was divested with
  the disposal. During 2005 all proceeds or payments related to disposals were
  in cash. The disposal of associated companies related to disposal of Postal
  Preference Service Limited in the mail segment and Mistral Air in the express
  segment. The net cash generated by other investing activities included  €16 million mainly attributable to settling net balances
  relating to our disposal of Global Collect B.V. Interest and similar income
  amounted to €117 million of which €75 million was related to non-cash
  interest from our discontinued logistics business. The cash inflow for interest
  received totalled €40 million. No dividends were received during 2005. In 2005, capital expenditures on property, plant and equipment
  amounted to €230 million (2004: 217). Of this amount €80 million (2004:
  75) related to mail, €140 million (2004: 136) to express and €10 million
  (2004: 6) to non-allocated. The capital expenditures on intangible assets of
  €80 million (2004: 59) mostly related to software. In 2005, capital expenditures
  were funded primarily by cash generated from operations. Proceeds from the sale of property, plant and equipment in
  2005 totalled €43 million (2004: 14), which mainly related to several buildings
  from TNT Real Estate B.V. and TNT Real Estate Development B.V. (€23 million)
  and buildings and equipment from the joint venture Postkantoren B.V. (€7
  million) in the mail segment and equipment in our Express operations in the
  United Kingdom (€4 million). The net cash generated by other investing activities totalled  €16 million (2004: 165) and is mainly attributable to
  settling net balances relating to our disposal of Global Collect B.V. Interest
  and similar income amounted to €117 million (of which €72 million
  was related to our discontinued logistics business), the cash inflow for interest
  received totalled €40 million. No dividends were received during 2005. 2004In 2004, we acquired group and associated companies
    for a total amount of €196 million, which consisted of total amounts
    paid of €206 million and €10 million cash acquired. The payments
    were primarily attributable to the acquisition of Wilson (€190 million).
    We also made several smaller acquisitions in our mail division for an amount
    of €14 million, including the remaining shares of Höfinger GmbH and
    the establishment of the joint venture Cendris BSC Customer Contact B.V.,
    and in our express division for an amount of €2 million. During 2004
    all proceeds or payments related to acquisitions were in cash. The investments
    in associated companies of €11 million primarily related to additional
    capital contributions in one of our associates of €10 million. During 2004, we also disposed of interests in two small group
  companies for which €1 million cash was received and included the divestment
  of €1 million of cash. During 2004 all proceeds or payments related to
  disposals were in cash. In 2004, capital expenditures on property, plant and equipment
  amounted to €217 million. Of this amount €75 million related to mail
  and €136 million to express. The capital expenditures on intangible assets
  of €59 million mainly related to software.


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|CHAPTER 11 | | | OTHER FINANCIAL INFORMATION ON THE COMPANY | 90
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The net cash generated by other investing activities included  €165 million, of which €160 million was attributable
  to the settlement of a $435 million cross currency interest rate swap, which
  provided a hedge against US dollar denominated assets. In 2004 interest received
  amounted to €33 million and no dividends were received. NET CASH USED IN FINANCING ACTIVITIES 2006Under our share buy back programme announced on 6 December
  2005 we purchased 27.8 million of our ordinary shares in 2006 for an amount
  of €769 million. An additional payment of €17 million was made for
  shares being purchased during the last three business days of 2005. Under our
  share buy back programme announced on 6 November 2006 we purchased 27.6 million
  of our ordinary shares (of which 18.2 million shares were bought from the State
  of the Netherlands) for a total amount of €887 million, of which €881
  million was paid in 2006. The remaining amount was paid in 2007. Additional to the share buy back programs above, an additional
  outflow of €79 million occurred relating to the purchase of 2,700,000 ordinary
  shares to cover our obligations under the existing management option plans and
  share grants. A final cash dividend over 2005, amounting to €173 million
  or  €0.41 per ordinary share and a cash interim dividend for
  2006 of €109 million or €0.26 per ordinary share were paid in 2006. TNT received cash payments of €52 million (2005: 16) for
  the exercise of employee stock options in 2006. The increase results from the
  accelerated vesting of logistics participants and an increase in the number
  of regular exercises. The total repayments relating to long term borrowing of €53
  million (2005: 2; 2004: 16) related mainly to repayments of bank loans. The
  scheduled payments on aircraft leases and other leases amount to €10 million
  (2005: 4 million; 2004: 9 million). Movements in short term liabilities resulted in a net cash
  inflow of €162 million (2005 (outflow): 50; (outflow) 2004: 37). The total
  repayments to short term borrowings mainly relates tot the repayment of the
  bilateral bullet loan agreement maturing in 2006 of €129 million, to a
  decrease of bank overdrafts of  €32 million and to repayments on short term leases of
  €4 million (2005: 47, 2004: 0) offset by a cash inflow relating to short
  term liabilities of €328 million (2005: 14; 2004: 8), of which €287
  million relates to our commercial paper program and €41 million to an increase
  of bank facilities. The net cash out flow used in financing our discontinued logistics
  and freight management businesses amounted to €276 million (2005 outflow:
  21; 2004 inflow: 135). This mainly relates to the repayment of €215 million
  of the Canadian dollar denominated, syndicated facility that was signed in May
  2001 before completion of the sale of our logistics business to Apollo.




2005In 2005, a cash outflow of €259 million was included as
  consideration for the repurchase of 13.1 million shares from the State of the
  Netherlands. These shares were delivered by the State of the Netherlands as
  a result of a purchase agreement signed in September 2004. Under our share buy
  back programme announced on 6 December 2005 we purchased 9,020,000 of our ordinary
  shares for an amount of  €231 million. As at 31 December 2005, we paid €214
  million relating to 8,372,000 shares with the remainder of the amount being
  paid in January 2006. An amount of €16 million was received as a result of the
  exercise of options and share grants. Movements in long term borrowings resulted in a net cash inflow
  of €26 million. The total proceeds from long term borrowing of €34
  million consist mainly of a €14 million additional issuance of the 3.875%
  2015 Eurobond, a €13 million increase in bank loans, and a €6 million
  income from finance leases. A total of €6 million of repayments to long
  term borrowings related, amongst others, to a €4 million scheduled payment
  on aircraft leases and other leases, and to a €2 million repayment of bank
  loans. Movements in short term liabilities resulted in a net cash
  outflow of €50 million. The total repayments to short term borrowings mainly
  related to repayments on aircraft leases and other leases of €47 million
  and to a cash outflow of €20 million regarding hedge transactions, partly
  offset by a cash inflow relating to short term liabilities of €14 million. A final cash dividend over 2004, amounting to €168 million
  or  €0.37 per ordinary share and a cash interim dividend for
  2005 of €100 million or €0.22 per ordinary share were paid in 2005.
  The final dividend for 2005 of €0.41 per share resulted in an aggregate
  €173 million payment made in April 2006. In 2005 the net cash flow used in financing our discontinued
  operations amounted to €21 million. 2004In 2004, €151 million was paid as consideration for the
  repurchase of 7.6 million shares from the State of the Netherlands. An amount
  of €3 million was received as a result of the exercise of options and share
  grants. Movements in long term borrowings resulted in a net cash outflow
  of €11 million. The acquired long term liabilities of €14 million
  include €9 million of finance leases and €5 million of interest bearing
  liabilities. A total of €25 million in repayments of long term liabilities
  related, amongst others, to scheduled repayments on aircraft leases and other
  leases of €9 million and to various other movements in non-interest bearing
  liabilities. The cash outflow relating to short term financing of €37
  million includes €8 million regarding hedge transactions and various other
  repayments of loans within our express and mail divisions.


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|91 | OTHER FINANCIAL INFORMATION ON THE
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A final cash dividend for 2003, amounting to
    €142 million, and a cash interim dividend for 2004 of €95 million
    were paid in 2004. The final dividend for 2004 of €0.37 per share resulted
    in an aggregate €168 million payment made in April 2005. In 2004 the net cash flow generated from financing
    of discontinued operations amounted to €135 million.






DETAILED INFORMATION ON CAPITAL
  EXPENDITURES AND PROCEEDS

|                                                    | Year ended at 31 December | 
|--------------------------------------------------- | ------------------------- | 
|                                                    |                           | 
|                                                    | 2006                      | 
|                                                    |                           | 
|                                                    | US$                       | 
|                                                    |                           | 
|Property, plant and equipment                       | 366                       | 
|                                                    |                           | 
|Other intangible assets                             | 136                       | 
|                                                    |                           | 
|Total capital expenditures                          | 502                       | 
|                                                    |                           | 
|Proceeds from sale of property, plant and equipment | 86                        | 
|                                                    |                           | 
|Disposals of other intangible assets                | 3                         | 
|                                                    |                           | 
|Total proceeds                                      | 89                        | 
|                                                    |                           | 
|Net cash used for capital expenditures and proceeds | 413                       | 
|                                                    |                           | 
|(in millions)                                       |                           | 

Our capital expenditure on property, plant and equipment and
    other intangible assets by segment for the years 2006, 2005 and 2004 was as
    follows:


|                           | Year ended at 31 December | 
|-------------------------- | ------------------------- | 
|                           |                           | 
|                           | 2006                      | 
|                           |                           | 
|                           | US$                       | 
|                           |                           | 
|Express                    | 347                       | 
|                           |                           | 
|Mail                       | 145                       | 
|                           |                           | 
|Non-allocated              | 10                        | 
|                           |                           | 
|Total capital expenditures | 502                       | 
|                           |                           | 
|(in millions)              |                           | 



The capital expenditures shown in the above table are excluding
  the new finance leases, as they do not lead to cash flows. The finance leases
  consisted of the acquisition of the first Boeing 747-400 ERF (€110 million)
  and €30 million of other finance leases. EXPRESS2006Capital expenditure on property, plant and equipment and other
  intangible assets by our express business totalled €263 million in 2006,
  which was an increase of 36% compared to 2005. During 2006, capital expenditures on other intangible assets
  totalled €63 million and related primarily to the enhancements to our international
  shared systems and development of the financial systems (back office) software
  (€14 million).




Some of the larger express capital expenditures in 2006 included
  replacement of assets at UK Fashion warehouse (€41 million), replacement
  depots and vehicles in the United Kingdom (€40 million), Air and Road hub
  investments in the European Network (€8 million) and the new Italian hub
  in Piacenza (€7 million). 2005Capital expenditure on property, plant and equipment and other
  intangible assets by our express business totalled €194 million in 2005,
  which was an increase of 13% compared to 2004. During 2005, capital expenditures on other intangible assets
  totalled €54 million and related primarily to the development of financial
  systems (e-back office) software (€22 million), and further enhancements
  to our international shared systems.


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Some of the larger express capital expenditures in 2005 included
    fleet replacements in the United Kingdom (€12 million) and Australia
    (€5 million), the expansion of the air hub in Liège (€10
    million) and the road hub in Duiven (€7 million), depots in Stockholm
    (€5 million) and Preston (€4 million) and the remaining investments
    in the new headoffice for France in Lyon (€3 million). 2004Capital expenditure on property, plant and equipment and other
    intangible assets by our express business totalled €172 million in 2004.
    The capital expenditure related to depots, hubs and warehouses, depot equipment
    used in operations, including fleet expansions and replacements, and information
    technology, communication and other operational equipment, including automated
    sorting systems. During 2004, capital expenditures on other intangible assets
  totalled €29 million and related primarily to the development of financial
  systems (e-back office), software, and further enhancements to our international
  shared systems. Some of the larger express capital expenditures in 2004 included
    the investments for warehouse and IT related to our pan-government archiving
    contract in the United Kingdom (€10 million), a new headoffice for France
    in Lyon (€10 million), the replacement of trailers and tractor units
    in the United Kingdom (€7 million), depots in Stockholm (€6 million),
    Birmingham (€3 million) and Enfield (€3 million) and the first investments
    in the expansion of the air hub in Liège (€4 million). MAIL2006Capital expenditure on property, plant and equipment and other
    intangible assets by our mail division totalled €110 million in 2006,
    which was an increase of 8% compared to 2005. The main capital expenditures
    in 2006 related to machinery & equipment (€41 million), IT (€46
    million) and housing (€13 million). The remaining €20 million of
    capital expenditure is related to various smaller projects.Significant investments were made in trucks & trailers
    (€12 million) and in sequence sorting machines and sequence sorting software
    in the Netherlands (€8 million) and elsewhere in Europe (€5 million). 2005Capital expenditure on property, plant and equipment and other
    intangible assets by our mail division totalled €102 million in 2005,
    which was an increase of 4% compared to 2004. The main capital expenditures
    in 2005 related to machinery (€24 million), software (€19 million),
    hardware (€9 million), and housing (€17 million). The remaining
    €33 million of capital expenditure related to various smaller projects.Significant investments were made in the sorting and
    distribution process, with a total amount of €19 million invested in
    sequence sorting machines and sequence sorting software and €10 million
    invested in housing following the restructuring of operations in the Netherlands. 2004Capital expenditure on property, plant and equipment and other
  intangible assets by our mail division totalled €98 million in 2004. The
  main capital expenditures in 2004 related to




machinery (€22 million), software (€19 million),
    hardware (€12 million) and housing (€11 million). The remaining
    €34 million of capital expenditure related to various smaller projects.Significant investments were made in the sorting process,
    with a total amount of €23 million invested in sequence sorting machines
    and sequence sorting software and €6 million invested in tray cart unloaders. LIQUIDITY AND CAPITAL RESOURCES The companys capital resources include funds provided
  by our operating activities and capital raised in the financial markets. As regards
  the former, the company generates strong cash flows from operating activities
  of €857 million in 2006 (2005:  €969 million: 2004: €690 million). As with any global
  organisation, these operating cash flows are affected by economic and business
  trends. A significant portion of our operating cash flows are derived from our
  mail division, particularly from operations in the Netherlands. Amongst other
  factors, the impact of electronic substitution on mail volumes, postal regulations
  in the Netherlands and the pace of postal liberalisation in Europe continue
  to affect those cash flows, although it is not possible to predict what the long
  term cash flow effects will be. Although cash requirements for capital expenditure fluctuate
    from year to year, depending on the extent of strategic capital projects,
    they have been well covered by operating cash flows. Specifically, the ratio
    of cash from operating activities to net capital expenditure was 2.7 in 2006,
    3.7 in 2005 and 2.7 in 2004. This ratio is calculated as follows: net cash
    provided by operating activities divided by the sum of capital expenditure
    on other intangible assets, disposals of other intangible assets, capital
    expenditure on property, plant and equipment and disposals of property, plant
    and equipment, all as stated in our consolidated cash flow statements. We
    expect these operating cash flows to continue to cover our capital expenditure
    requirements in the foreseeable future. We believe our working capital generates
    sufficient liquidity to cover our requirements. For any acquisitions or buy back of shares that exceed the
  companys immediate cash resources, the company would seek to raise capital
  in the financial markets by means of bank borrowings and private or publicly
  traded debt. For very substantial transactions, if required we would also consider
  issuing equity in order to maintain an investment grade around BBB+. Given the
  strength of our financial position, credit ratings, and bank relationships, we
  do not foresee an inability to access a wide range of capital markets including
  equity, public debt, private debt and bank borrowing. We monitor and manage
  key financial ratios that are consistent with a strong credit rating. There are
  no aspects of our current capital structure that we believe would trigger a
  material increase in the cost of our debt or access to capital markets. For details on the interest rates charged on our more significant
  long term loans as well as the maturity of our long term loans and commitments,
  see notes 13 and 29 to our consolidated financial statements.


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|93 | OTHER FINANCIAL INFORMATION ON THE
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We do not hold or issue financial instruments for trading purposes,
  nor do we allow our subsidiaries to do so. For details on our use of financial
  derivatives for hedging purposes, see notes 3, 6, 13 and 14 to our consolidated
  financial statements. Off-balance sheet itemsOther than guarantees and other similar arrangements that could
  be considered off-balance sheet and that are disclosed in this annual report,
  we have no off-balance arrangements. CASH AND NET DEBTCashAt 31 December 2006, our total cash position amounted to  € 297 million. Included in the €297 million
  of total cash was  €74 million of restricted cash (2005: 140) held mainly
  by joint ventures and our insurance captives. The cash held in joint ventures
  is considered to be restricted by virtue of the fact that we require the agreement
  of our joint venture partners before we are able to access this cash. Our total
  cash position was primarily denominated in euro. EurobondThe fair value of long term interest bearing debt, net of current
  portion, has been estimated by calculating the discounted value of the loan
  portfolio using an estimated yield curve, appropriate for the contract terms
  in effect at the end of the year. The carrying amounts of current portion of
  long term debt approximate their fair value. In 2001, TNT N.V. issued a €1 billion 5.125% Eurobond
  2008. In 2005 €354 million of the €1 billion 5.125% Eurobond 2008
  was exchanged for €386 million of a new 10-year 3.875% Eurobond 2015. At
  the time of the exchange, the 2015 bond was increased with an additional €14
  million to an outstanding total amount of €400 million. After the exchange
  the nominal value of the 5.125% Eurobond is €646 million, and the nominal
  value of the 3.875% Eurobond amounts to €400 million. The total €1,046 million (2005: 1,046) of Eurobonds is
  measured at amortised cost of €1,015 million (2005: 1,011). A fair value
  adjustment of positive €11 million (2005: 2) has been reflected in the
  amortised cost value to adjust the amortised cost value to the carrying amount
  of €1,004 million (2005: 1,009). Finance leasesTotal debt on finance leases consist of financial lease contracts
    on buildings (depots), trucks and airplanes. The net market value of the long
    term portion of these leases amounted to €143 million. Interest rate swapsTNT has €500 million (2005: 500) of interest rate swaps
  outstanding for which we receive fixed interest and pay floating interest. These
  interest rate swaps act as a hedge against the fair value interest rate risk
  of our 5.125% December 2008 Eurobond. The market value of these instruments
  amounted to negative €11 million as at 31 December 2006 (2005: -2). In December 2004, we entered into €500 million of forward
    starting interest rate swaps whereby we will receive floating interest and
    pay fixed interest. These flows of interest




exchanges under the forward starting interest rate swaps will
    start per December 2008 and will end in June 2015. Due to the June 2005 exchange
    for the new 3.875% 2015 Eurobond, we have decided to unwind €400 million
    of outstanding forward starting interest rate swaps whereby we paid the market
    value of €12 million. Because the forward starting interest rate swap
    has been designated as a cash flow hedge, the market value will stay in equity
    until December 2008 and will be straight-line amortised to income until December
    2015.The nominal value of the remaining forward starting interest rate swap
    agreed upon in December 2004 and starting per December 2008 amounts to €100
    million. In June 2006, we entered into another €500 million of
    forward starting interest rate swaps whereby we will receive floating interest
    and pay fixed interest. These flows of interest exchanges under the forward
    starting interest rate swaps will start per December 2008 and will end in
    June 2015. The market value of the above mentioned long term outstanding
    forward starting interest rate swaps totaling €600 million, amounts to
    €8 million as at 31 December 2006 (2005: 5). As all forward starting
    swaps have been designated as cash flow hedges, the market value movements
    have been included in equity. In 2006 we entered into $445 million of (forward starting)
    interest rate swaps whereby we will receive floating interest and pay fixed
    interest. These interest rate swaps act as a hedge against the cash flow interest
    rate risk of future lease terms with respect to the new acquired Boeing 747s.
    In December 2006 a $152 million forward starting interest rate swap was unwound
    whereby we paid the market value of €5 million. Because the swap has
    been designated as a cash flow hedge, the market value will remain in equity
    and will be straight-line amortised to income over the lease term of the related
    Boeing 747. The market value of the remaining $293 million (forward starting)
    interest rate swaps amounted to net €3 million negative as at 31 December
    2006. The fair value of the swaps is being classified under other financial
    fixed assets €1 million and other current liabilities €4 million.
    As the swaps have been designated as cash flow hedges, the market value movements
    have been included in equity. CREDIT FACILITIES At 31 December 2006 TNT had the following committed facilities: 
    Multicurrency Revolving Facility of €1,000
      million;
    Multicurrency Revolving Facility of €600
      million. At 31 December 2006, our long term credit ratings were A-(negative
  outlook) by Standard & Poors and A3 (stable outlook) by Moodys. CASH OBLIGATIONSAt 31 December 2006, our gross interest bearing borrowings,
    including finance lease obligations, totalled €1,566 million (2005: 1,284),
    of which 92% (2005: 94%) was at fixed rates of interest and €1,183 million
    (2005: 1,071) represented long term debt. We had operating lease commitments
    of €909 million (2005: 1,251).


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The following table shows the maturity of these amounts:

|                                     |       |  |                  |  |              |  |              |  |               | 
|------------------------------------ | ----- |  | ---------------- |  | ------------ |  | ------------ |  | ------------- | 
|                                     | Total |  | Less than 1 year |  | 1 to 3 years |  | 4 to 5 years |  | After 5 years | 
|                                     |       |  |                  |  |              |  |              |  |               | 
|Total interest bearing borrowings    | 1,566 |  | 383              |  | 674          |  | 29           |  | 480           | 
|                                     |       |  |                  |  |              |  |              |  |               | 
|Rent and operating lease commitments | 909   |  | 222              |  | 345          |  | 167          |  | 175           | 
|                                     |       |  |                  |  |              |  |              |  |               | 
|Total contractual cash obligations   | 2,475 |  | 605              |  | 1,019        |  | 196          |  | 655           | 
|                                     |       |  |                  |  |              |  |              |  |               | 
|(in € millions)                      |       |  |                  |  |              |  |              |  |               | 



GUARANTEES Total guarantees at 31 December 2006 were €348 million
  (2005: 267; 2004: 350). Of these guarantees, TNT issued corporate guarantees
  up to the amount of €183 million (2005: 99; 2004: 164). Banks and other
  financial institutions issued guarantees up to the amount of €165 million
  (2005: 147; 2004: 127). The obligations under the bank guarantees have been
  secured by our company or its subsidiaries.




Of the amount of €348 million, financial guarantees amounted
  to €211 million (2005: 191) and were mainly issued in connection with our
  obligations under lease contracts, custom duty deferment, airline cargo services,
  credit lines and insurance contracts. Operating guarantees amounted to €137
  million (2005: 76) and were mainly issued in connection with mailing and other
  service performance contracts.


|AMOUNTS OF COMMITMENTS EXPIRATION BY PERIOD |       |  |                  |  |              |  |              |  |               | 
|------------------------------------------- | ----- |  | ---------------- |  | ------------ |  | ------------ |  | ------------- | 
|                                            | Total |  | Less than 1 year |  | 1 to 3 years |  | 4 to 5 years |  | After 5 years | 
|                                            |       |  |                  |  |              |  |              |  |               | 
|Guarantees                                  | 348   |  | 134              |  | 7            |  | 25           |  | 182           | 
|                                            |       |  |                  |  |              |  |              |  |               | 
|(in € millions)                             |       |  |                  |  |              |  |              |  |               | 



CONTINGENCIES OPERATING LEASE COMMITMENTSOur total operating lease commitments at the end of the year
  were €909 million (2005: 1,251). The total commitments as at 31 December
  2006 relating to capital expenditure were €150 million (2005: 16). SHARE BUY BACKUnder the €1,000 million repurchase programme, announced
  on 6 November 2006 (also refer to note 9), we purchased shares for a total amount
  of €113 million after 31 December 2006. As at 23 January 2007, we have
  completed this repurchase programme. UNCONDITIONAL PURCHASE COMMITMENTSAt 31 December 2006 we had unconditional purchase commitments
  of €58 million (2005: 100), which were primarily related to various service
  and maintenance contracts. INCOME TAXESMultinational groups the size of TNT are exposed to varying
  degrees of uncertainty related to tax planning and regulatory reviews and audits.
  We account for our income taxes on the basis of our own internal analyses, supported
  by external advice. We continually monitor our global tax position, and whenever
  uncertainties arise, we assess the potential consequences and either accrue
  the liability or disclose a contingent liability in our financial statements,
  depending on the strength of our position and the resulting risk of loss. In 2006, TNT continued to investigate and analyse its global
    tax position As a result we currently estimate a range of €100 - €250
    million to reflect the realistic range of our total contingent liability in
    this regard.




In early 2004 our audit committee, on behalf of our Supervisory
    Board, conducted an independent investigation regarding representations made
    to the UK tax authorities and to our independent auditors, PricewaterhouseCoopers,
    with respect to certain UK tax matters originally arising in the late 1990s
    relating to one of our UK subsidiaries. In August 2004 we submitted a report
    to the UK tax authorities pursuant to a procedure under UK law designed to
    ensure full disclosure of all relevant information to the UK tax authorities.
    In the first quarter of 2005 we reached a settlement with the UK tax authorities
    in relation to those matters without any further negative impact on our tax
    position in 2005. As previously disclosed, since August 2004, we have been preparing
  an addendum to our original report to the UK tax authorities that cover UK tax
  matters that were not the subject of the original investigation. In 2006 we
  submitted a substantially advanced draft of available information and related
  tax conclusions required by the UK tax authorities and started discussions with
  them on these tax matters. The major issue being discussed with the UK tax authorities
    concerns whether some of our non-UK subsidiaries might have been resident
    in the United Kingdom prior to the acquisition of TNT Limited in December
    1996 and, if so, whether capital gains tax would have been due if the tax
    residency of those subsidiaries later moved to another European country. After
    having investigated the matter we are of the opinion that the relevant subsidiaries
    were never UK resident But even if they were seen to be UK resident, we believe
    that the imposition of such a capital gains tax would be impermissibly discriminatory
    under EU law. Our opinion has been and is supported by strong external specialist
    advice.


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We have been in discussion with the UK tax authority to come
  to an agreement on these issues. While to date no assessments relating to the
  item under discussion have been raised, the UK tax authority will issue initial
  assessments, as we understand it, as a matter of procedure, before they and
  we can effectively continue to seek an agreed solution. TNT will appeal against
  the initial assessments. The amounts raised in such initial assessments could
  exceed the realistic range of our estimated total contingent liability as disclosed
  above. It is customary in the UK with respect to such initial assessments that
  the actual obligation for payment will be deferred during the litigation and
  appeal period until either an agreement is reached or a final assessment is
  raised. On the basis of our ongoing discussions with the UK tax authorities
  and the strength of our position, we currently expect either these matters to
  be settled in 2007 or if necessary litigation to be commenced. In late 2005 and early 2006 our audit committee conducted an
  independent investigation with respect to whether illegal acts occurred in connection
  with certain past tax matters. Although the investigation concluded that such
  acts had occurred, it was determined in February 2006 that no provision or contingent
  liability was required as a result of this investigation. We have also analysed the tax positions of some of our subsidiaries
  with respect to other countries. Our investigations and analyses concerned,
  among other things, the substance and implementation of tax structures set up
  in connection with the acquisition, in December 1996 (prior to our formation
  in 1998), by our former parent company of the Australian company TNT Limited
  through a UK subsidiary, and the integration and structuring of those and related
  businesses after our demerger in 1998. In early 2006 we actively discussed these
  structures with the relevant tax authorities and have reached an agreement on
  these matters. As part of a pilot publicly announced by the Dutch Ministry
  of Finance, we signed a compliance covenant with the Dutch tax authorities in
  early 2006 to self-assess and transparently discuss our past, present and future
  tax issues with the Dutch tax authorities. The Dutch tax authorities have agreed,
  in turn, to take a clear position on such issues swiftly. In 2006 all relevant
  past matters presented and discussed have been concluded upon by the Dutch tax
  authorities and agreed with us. We have fully accrued the expected cost in our financial statements
  for 2006 of all of the matters described above, whether agreed or expected to
  be agreed. From the extensive review to date of our global tax position, on
  the basis of the facts and circumstances as currently known, the advice received
  from external advisors and the discussions we have had with various tax authorities
  some of which are still ongoing, we currently believe that it is unlikely that
  we will incur an additional liability beyond what we have accrued to date. Our
  interpretation of past facts and circumstances and relevant tax laws and regulations
  may be open to challenge or as stated above lead to tax assessments being raised.
  In addition it is not certain that litigation can be avoided in all cases. However,
  our positions have been and are supported by strong external specialist advice,
  both contemporaneous and present, on the basis of which we have reached our
  estimates. We currently believe that it is unlikely that we will incur
  an additional liability related to the above matters beyond what we have accrued
  to date.




We disclosed in our 2005 annual report an estimate of a realistic
  range to reflect our total contingent liability, including potential penalties
  and interest, of €150 - €550 million, based on a probability-weighted
  assessment of our estimated total theoretical liability. In April 2006 we disclosed
  that we reduced the range to €100 - €250 million which we continue
  to believe to be the realistic range to reflect our contingent liability. This
  range represents some 25-30% of the non-probability weighted estimated theoretical
  maximum liability - in the highly unrealistic scenario where all of our tax
  positions under investigation or analysis were successfully challenged, any
  expected initial assessments were unsuccessfully challenged by us, we and all
  relevant tax authorities were unable to reach any settlement whatsoever, and
  all of our positions were rejected by all relevant courts. We believe this is
  highly unlikely. Our estimate involves a series of complex judgments about past
    and future events and relies on estimates and assumptions. Although we believe
    that the estimates and assumptions supporting our positions are reasonable
    and are supported by external advice, our ultimate liability in connection
    with these matters will depend upon the assessments raised, the result of
    any negotiations with the relevant tax authorities and the outcome of any
    related litigation.If the actual taxes, penalties and interest imposed
    exceed the amounts we have accrued, it could adversely affect our financial
    position, results and cash flows. OTHERWe are involved in several legal proceedings relating to the
  normal conduct of our business. We do not expect any liability arising from
  any of these legal proceedings to have a material effect on our results of operations,
  liquidity, capital resources or financial position. We believe we have provided
  for all probable liabilities deriving from the normal course of business. For a further description of these contingencies see note 29
  to our consolidated financial statements. CAPITAL EXPENDITURES PROJECTION FOR 2007 The total projected 2007 capital expenditures on property,
  plant and equipment and other intangible assets for our divisions is estimated
  to be €550 million, which is expected to be spent on similar types of property,
  plant and equipment and other intangible assets as in 2006. The projected 2007
  capital expenditures include the second Boeing 747-400 ERF of €110 million,
  which will be financed by means of a finance lease. We believe that the net
  cash provided by our operating activities will be sufficient to fund the other
  capital expenditures. RELATED PARTY TRANSACTIONS AND BALANCES Our group companies have trading relationships with a number
    of our partially consolidated joint ventures as well as with unconsolidated
    companies in which we only hold minority stakes. In some cases there are contractual
    arrangements in place under which our group companies source supplies from


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such undertakings, or such undertakings source supplies from
  our group companies. During 2006, sales made by our group companies to our joint
  ventures amounted to €8 million, compared to €42 million in 2005 and
  €24 million in 2004. Purchases from our joint ventures for 2006 amounted
  to €103 million (2005: 131; 2004: 125). The net amounts due from joint
  venture entities as at 31 December 2006 totalled €58 million, compared
  to €49 million in 2005 and 2004. Loans receivable from associated companies are disclosed in
  notes 3 and 5 to our consolidated financial statements. As at 31 December 2006,
  no material amounts were payable by TNT to associated companies. We believe
  that all transactions with joint ventures and associated companies are conducted
  in the ordinary course of business and under normal arms length commercial
  terms and conditions. For further disclosure of the related party transactions and
  balances we refer to note 33 to our consolidated financial statements. For information
  on our relationship with the State of the Netherlands see chapter 13 and note
  32 to our consolidated financial statements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our reported financial condition and results of operations
    are sensitive to accounting policies, assumptions and estimates that underly
    the preparation of our financial statements. The profile of critical accounting
    policies, the judgements and other uncertainties affecting application of
    those policies and the sensitivity of reported results to changes in conditions
    and assumptions are factors to be considered, together with reviewing our
    financial statements and the discussion in this item. We make estimates and assumptions concerning the future. The
  resulting accounting estimates will, by definition, seldom equal the related
  actual results. The estimates and assumptions that have a significant risk of
  causing a material adjustment to the carrying amounts of assets and liabilities
  within the next financial year are described below. We have discussed the development
  and selection of these critical accounting policies and estimates with our independent
  auditors. In addition, our financial statements contain a summary of our significant
  accounting policies. BUSINESS COMBINATIONS AND IMPAIRMENT OF GOODWILL AND OTHER
  LONG LIVED INTANGIBLE ASSETS Under IFRS all of our business combinations are accounted for
  under the purchase method. The cost of an acquired company is assigned to the
  tangible and intangible assets purchased and the liabilities assumed on the
  basis of their fair values at the date of acquisition. The determination of
  fair values of assets and liabilities acquired requires us to make estimates
  and use valuation techniques when market value is not readily available. Any
  excess of purchase price over the fair value of the tangible and intangible
  assets acquired is allocated to goodwill.




Under IFRS we evaluate our goodwill for impairment at least
  annually and more frequently if specific events indicate that impairment in value
  may have occurred. Our goodwill impairment tests include judgements regarding
  assumptions relating to the level of testing, future cash flow and discount rates. The level we identify for impairment testing and the criteria
  we use to determine which groups should be aggregated also require judgement.
  A difference in testing levels could affect whether an impairment is recorded
  and the extent of impairment loss. Changes in our business activities or structure
  may result in changes to the level of testing in future periods. Additionally,
  the level of testing for IFRS may be lower than the level of testing for US
  GAAP, which adds another layer of complexity. To determine whether goodwill is impaired, we use valuation
  techniques that involve estimating cash flows for future periods and discounting
  these cash flows to determine value in use. We have to make estimates regarding
  expected revenues and costs as well as capital expenditures. Due to the inherent
  nature of estimates, our actual experienced revenues, costs and capital expenditures
  in the past have varied, in some cases materially, from our expectations. The
  use of different assumptions for our cash flow estimates could affect the amount
  of any impairment losses recognised. We also use significant judgement to determine
  the discount rate. Under US GAAP, there is a two-step impairment test. In the
    first step, we are required to make estimates regarding the fair values of
    cash generating units (assets and liabilities, including recorded and unrecorded
    intangible assets) in determining whether goodwill impairment might exist.
    To the extent the first step indicates a possible impairment of goodwill,
    the second test is performed and consists of comparing the fair values with
    the carrying amount of the reporting units goodwill in determining the
    amount of the impairment charge. We use valuation techniques to determine
    some of the fair values, which involve the same judgements as mentioned above
    regarding cash flows and discount rates. Under both IFRS and US GAAP, we review our tangible and intangible
  assets for impairment whenever events or changes in circumstances indicate that
  the carrying amount of an asset may not be recoverable (a triggering event).
  The review for recoverability requires us to estimate the future cash flows expected
  to result from the use of the asset and its eventual disposition. The determination
  of whether a triggering event has occurred as well as the development of the
  assumptions used to estimate future cash flows and determine fair value, requires
  the use of judgement, as mentioned above. PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment is valued at historical cost
  using a component approach, less depreciation or at the recoverable amount whenever
  impairment has taken place. Depreciation is calculated using the straight-line
  method based on the estimated useful life, taking into account any residual
  value. The assets residual values and useful lives are based on our best
  estimates, and adjusted if appropriate, at each balance sheet date.


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IMPAIRMENT OF RECEIVABLESThe risk of uncollectibility of accounts receivable is primarily
  estimated based on prior experience with and the past due status of doubtful
  debtors, while large accounts are assessed individually based on factors that
  include ability to pay, bankruptcy and payment history. In addition, debtors
  in certain countries are subject to a higher collectibility risk, which is taken
  into account when assessing the overall risk of uncollectibility. Should the
  outcome differ from the assumptions and estimates, revisions to the estimated
  valuation allowances would be required. POST-EMPLOYMENT BENEFITSPension costInherent to the valuation of our pension liabilities and the
    determination of our pension cost are key assumptions, which include employee
    turnover, mortality rates and retirement ages, discount rates, expected long
    term returns on plan assets, benefit increases and future wage increases,
    which are usually updated on an annual basis at the beginning of each financial
    year. Actual circumstances may vary from these assumptions, giving rise to
    a different pension liability, which would be reflected as an additional Profit
    or expense in our statement of income. Included in note 10 in chapter 12 is
    a table that indicates the change in employer pension expense with a 0.5%
    change in certain key assumptions. In 2006, our employer pension expense was €120 million.
    Total cash contributions in 2006 amounted to €230 million and are expected
    to amount to approximately €214 million in 2007. In 2005, our employer
    pension expense was €149 million (2004: 185). Total cash contributions
    in 2005 amounted to €264 million (2004: 437). RESTRUCTURINGWe periodically record restructuring charges resulting from
    restructuring operations, including consolidations and/or relocations of operations,
    changes in our strategic plan, or managerial responses to declines in demand,
    increasing costs or other market factors. Restructuring provisions reflect
    many estimates, including those pertaining to separation costs, consolidation
    of excess facilities, redundancies, contract settlements and tangible asset
    impairments. Actual experience has been and may continue to be different from
    these estimates. As at 31 December 2006 and 2005, restructuring provisions
    were €45 million and €43 million, respectively. ACCRUED CURRENT LIABILITIESWe also have to estimate the deferred revenues from stamps
    sold but not yet used by our customers. We use a seasonal model based on historical
    figures in order to account for the seasonal effects in sales from stamps
    (for example sales for Christmas greetings in November and December). In 2006
    we have defined a more refined method of calculating the deferred revenue
    related to the sale of stamps in 2006. In accordance with IAS 8 the change
    in accounting estimate was recognised in the income statement for the period.
    The impact was an additional gain of €18 million (pre-tax) and was recognised
    in Other operating expenses.




INCOME TAXESWe currently have significant deferred tax assets resulting
  from net operating loss carry forwards and deductible temporary differences,
  which will reduce taxable income in future periods. We recognise deferred tax
  assets to the extent that it is probable that future taxable profits will allow
  the deferred tax asset to be recovered. This is based on estimates of taxable
  income by jurisdiction in which we operate and the period over which deferred
  tax assets are recoverable. In the event that actual results differ from these
  estimates in future periods, and depending on the tax strategies that we may
  be able to implement, changes to the recognition of deferred tax assets could
  be required, which could impact our financial position and net income. ACCOUNTING FOR DISCONTINUED OPERATIONSAccounting for discontinued operations requires the use of
  significant assumptions and estimates, such as the assumptions used in the fair
  value calculations as well as the estimated costs to sell. We have evaluated
  the assets held for sale of our discontinued freight management operations as
  a disposal group in performing our impairment analysis. CONTINGENT LIABILITIESLegal proceedings and tax issues covering a range of matters
  are pending in various jurisdictions against us. Due to the uncertainty inherent
  in such matters, it is often difficult to predict the final outcome. The cases
  and claims against us often raise difficult and complex factual and legal issues
  which are subject to many uncertainties and complexities, including but not
  limited to the facts and circumstances of each particular case and claim, the
  jurisdiction and the differences in applicable law. In the normal course of
  business, we consult with legal counsel and certain other experts on matters
  related to litigation and taxes. We accrue a liability when it is determined that an adverse
  outcome is probable and the amount of the loss can be reasonably estimated.
  In the event an adverse outcome is possible or an estimate is not determinable,
  the matter is disclosed. RECONCILIATION OF IFRS TO US GAAP Our financial statements are prepared in accordance with IFRS,
  which differ in certain respects from US GAAP. In the case that our IFRS accounting
  policies do not correspond with the required US GAAP accounting treatment and
  this is estimated to have a significant effect on our consolidated net income
  and shareholders equity, we have highlighted these differences in the
  reconciliation of our IFRS net income and equity attributable to the equity
  holders of the parent to those under US GAAP, as presented in note 35 to our
  consolidated financial statements. Net income determined in accordance with US GAAP was €657
  million in 2006 (2005: 632; 2004: 714), which was €13 million lower than
  net income determined in accordance with




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IFRS in 2006 compared to €27 million lower in 2005 and
  €38 million lower in 2004. For 2006 the difference relates to the completed
  sale of the logistics division. Under IFRS we recognised a loss on disposal
  of €87 million. Under US GAAP we recognised a loss of €56 million.
  The difference is the result of a smaller loss due to differences in the valuation
  of assets and liabilities between IFRS and US GAAP offset by the release of
  a larger negative currency translation adjustment of €69 million. The reduced
  loss on sale under US GAAP was more than offset by additional depreciation and
  amortisation of €45 million, net of tax, recognised under US GAAP as the
  logistics division did not qualify as a discontinued operation until 29 September
  2006. For 2005 the difference mainly relates to employee benefits. As permitted
  under IFRS 1, First-time Adoption of International Financial Reporting Standards,
  at the date of transition to IFRS we have elected to recognise all cumulative
  actuarial gains and losses and the unrecognised prior year service costs for
  all our defined benefit pension plans. For US GAAP purposes the actuarial gains
  and losses and unrecognised prior year service costs continue to be recognised
  under the corridor approach. This has resulted in a difference in the pension
  expense and pension liability between IFRS and US GAAP. The main differences in our 2004 net income relate to the unwinding
  of an insurance contract in the mail division with a remaining balance of €130
  million at the moment of the termination of the contract, which was offset by
  lower pension costs under US GAAP, the realisation of gains on real estate sales
  and a positive tax effect on the reconciling items. Our equity determined in accordance with US GAAP was €1,571
    million at 31 December 2006 (2005: 2,757), which was €437 million lower
    at 31 December 2006 than our total equity determined in accordance with IFRS.
    The lower equity under US GAAP was mainly caused by a direct equity movement
    related to the recognition of a larger net pension liability of €539
    million at 31 December 2006 (2005: 587), net of taxes. This was partly offset
    by differences relating to goodwill and employee benefits. Until the end of 2005 under US GAAP, we were required to record
  a minimum pension liability in the event the accumulated benefit obligation (ABO)
  exceeds the fair value of the pension plan assets with a corresponding reduction
  in shareholders equity net of deferred taxes. As at 31 December 2005 and
  2004, the ABO amounted to €5,194 million and  €4,643 million, respectively. The increase in the ABO
  was mainly due to a decrease in interest rates from 4.8% in 2004 to 4.3% in
  2005 (impact approximately €440 million). As at 31 December 2005 and 2004
  the ABO for certain of our pension plans in the Netherlands, in Germany, and
  in the United States exceeded the plan assets, we were required to record a
  minimum pension liability (net of taxes) of €587 million for 2005 and €454
  million for 2004. In September 2006 the FASB issues Financial Accounting Standard
  158, Employers Accounting for Defined Benefit Pension and Other Postretirement
  Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R) (FAS
  158). FAS 158 requires companies to fully recognize an asset or liability for
  the overfunded or underfunded status of their benefit plans in the financial
  statements for years ending after 15 December 2006. The pension asset or liability
  equals the difference




between the fair value of the plans assets and its benefit
  obligation. The benefit obligation is measured as the projected benefit obligation
  for pension plans and as the accumulated postretirement benefit obligation for
  other postretirement benefits. The impact of the companys net funded status
  is to be recorded in equity as a component of accumulated other comprehensive
  income, net of tax. The impact of this standard for the year ended December
  2006 resulted in a decrease in Accumulated other comprehensive income of €500
  million (net of deferred tax assets of €171 million) an increase in plan
  assets of €135 million and an addition provision for pension liabilities
  of €807 million in our financial statements under US GAAP. The impact of
  the adoption of FAS 158 within equity was offset by an overall reduction in
  the pension liability in 2006 primarily due to an increase in the discount rate
  from 4.3% to 4.7%. As of 31 December 2006 the amount of unrecognized pension
  expense within accumulated other comprehensive income was  €539 million, net of tax. The amounts in accumulated other
  comprehensive income expected to be recognised as components of net periodic
  benefit costs in 2007 are an amortised prior service cost credit of €39
  million, offset by an amortised net actuarial loss of €37 million. Under IFRS such a pension liability has not been a requirement
  for 2006, 2005 and prior years. As of 1 January 2006 the Amendment to IAS 19 introduces the
  option of an alternative recognition approach for actuarial gains and losses.
  It may impose additional recognition requirements for multi-employer plans where
  insufficient information is available to apply defined benefit accounting. It
  also adds new disclosure requirements. As the Group does not intend to change
  the accounting policy adopted for recognition of actuarial gains and losses,
  adoption of this amendment only impacts the format and extent of disclosures
  presented in the accounts. As at 31 December 2004 our repurchase of shares, relating
    to the second tranche of our September 2004 share repurchase plan, amounting
    to €259 million qualified under US GAAP as financial liability rather
    than equity. As a result of our December 2005 announcement to focus on our
  core competency of providing delivery services, we presented assets and liabilities
  of our discontinued logistics business as long lived assets to be disposed of
  by sale and presented our profit (loss) for the period from our discontinued
  logistics business as profit (loss) from discontinued operations. As required
  under IFRS 5, Non-current Assets Held for Sale and Discontinued Operations,
  we have not depreciated or amortised, since 6 December 2005, our assets held
  for sale. On 4 November 2006 we sold our logistics business. We also refer to
  note 8 in our Financial statements. IFRS 5, Non-current Assets Held for Sale and Discontinued
    Operations, requires us to classify non-current assets or a disposal group
    as held for sale if its carrying amount will be recovered principally through
    a sale transaction rather than through continuing use. For this to be the
    case, the assets or disposal group should meet a number of criteria.We have met all the criteria as required under IFRS
    5 for our logistics business as at 31 December 2005.


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The position of the SEC is that in the event shareholder approval
  is required, management is not considered having authority to dispose of an
  asset, a requirement for US GAAP to treat such assets as being held for sale.
  Accordingly, under US GAAP this criterium was not met until 29 September 2006.
  For US GAAP purposes our logistics business was therefore not recognised as
  a discontinued operation until 29 September 2006. The French logistics business
  met all criteria and was presented as discontinued operations in 2005 and the
  remainder of the logistics business was presented as part of continuing operations,
  whose assets continued to be depreciated. At 29 September 2006 the Extraordinary General Meeting of Shareholders
  approved the sale of the remaining logistics division. Due to the approval,
  US GAAP Statements of Income




for previous periods have been restated to reflect the entire
     logistics division as a discontinued operation. Depreciation and amortisation from 1 January 2006 to 29 September
  2006 and from 6 December 2005 to 31 December 2005 for our discontinued logistics
  business, other than the French activities that we sold during 2005, amounted
  to €60 million and €8 million, respectively. These amounts are included
  as reconciling items between IFRS and US GAAP. We refer to note 35 of our Financial
  statements for a full reconciliation of the result from the sale of the discontinued
  logistics business under IFRS and US GAAP. The following tables indicate our 2006, 2005 and 2004 operating
  income determined in accordance with IFRS, compared to that determined in accordance
  with US GAAP:


|                                  |       |   |         |   |            |   | Year ended at 31 December |  
|--------------------------------- | ----- | - | ------- | - | ---------- | - | ------------------------- | -
|                                  |       |   |         |   |            |   |                           |  
|                                  | IFRS  |   | US GAAP |  
|                                  |       |   |         |   |            |   |                           |  
|OPERATING INCOME 2006             | 2006  |   | 2006    |   | % of total |   | 2006                      |  
|                                  |       |   |         |   |            |   |                           |  
|                                  | US$   |   | €       |   |            |   | US$                       |  
|                                  |       |   |         |   |            |   |                           |  
|Express                           | 765   |   | 580     |   | 45.5       |   | 765                       |  
|                                  |       |   |         |   |            |   |                           |  
|Mail                              | 1,004 |   | 761     |   | 59.6       |   | 1,013                     |  
|                                  |       |   |         |   |            |   |                           |  
|Non-allocated                     | (86   | ) | (65     | ) | (5.1       | ) | (86                       | )
|                                  |       |   |         |   |            |   |                           |  
|Total                             | 1,683 |   | 1,276   |   | 100.0      |   | 1,692                     |  
|                                  |       |   |         |   |            |   |                           |  
|(in millions, except percentages) |       |   |         |   |            |   |                           |  



Operating income in our express business has no overall differences
  between IFRS and US GAAP. In 2006 the IFRS operating income in the mail division was
  lower by €6 million as compared with the operating income




under US GAAP. This largely relates to lower pension expenses
  of €16 million as per US GAAP, partially offset by a curltailment gain
  of €12 million under IFRS that is not recognised in the statements of income
  under US GAAP.


|                                    |       |   |            |   | Year ended at 31 December |  
|----------------------------------- | ----- | - | ---------- | - | ------------------------- | -
|                                    |       |   |            |   |                           |  
|OPERATING INCOME 2005               | IFRS  |   | US GAAP    |  
|                                    |       |   |            |   |                           |  
|                                    | 2005  |   | % of total |   | 2005                      |  
|                                    |       |   |            |   |                           |  
|Express                             | 476   |   | 41.5       |   | 478                       |  
|                                    |       |   |            |   |                           |  
|Mail                                | 775   |   | 67.5       |   | 761                       |  
|                                    |       |   |            |   |                           |  
|Non-allocated                       | (103  | ) | (9.0       | ) | (105                      | )
|                                    |       |   |            |   |                           |  
|Total                               | 1,148 |   | 100.0      |   | 1,134                     |  
|                                    |       |   |            |   |                           |  
|(in € millions, except percentages) |       |   |            |   |                           |  



In 2005 the IFRS operating income in the mail division was higher
  by €14 million as compared with the operating income under US GAAP. Certain
  employee benefit expenses related to payments expected to be made to certain
  employees on reaching a specific number of years of service. As permitted under
  IFRS 1, First-time Adoption of International Financial Reporting Standards,
  at the date of transition to IFRS, we recorded a liability with a corresponding
  adjustment to




shareholders equity at that date. For US GAAP purposes,
  we have included the amount in the income statement resulting in a difference
  in the profit for the period between IFRS and US GAAP. This was partly offset
  by higher pension expenses under IFRS. Operating income in our express business
  has no material difference between IFRS and US GAAP.


|                                    |       |   |            |   | Year ended at 31 December |  
|----------------------------------- | ----- | - | ---------- | - | ------------------------- | -
|                                    |       |   |            |   |                           |  
|OPERATING INCOME 2004               | IFRS  |   | US GAAP    |  
|                                    |       |   |            |   |                           |  
|                                    | 2004  |   | % of total |   | 2004                      |  
|                                    |       |   |            |   |                           |  
|Express                             | 378   |   | 34.1       |   | 383                       |  
|                                    |       |   |            |   |                           |  
|Mail                                | 803   |   | 72.3       |   | 744                       |  
|                                    |       |   |            |   |                           |  
|Non-allocated                       | (71   | ) | (6.4       | ) | (73                       | )
|                                    |       |   |            |   |                           |  
|Total                               | 1,110 |   | 100.0      |   | 1,054                     |  
|                                    |       |   |            |   |                           |  
|(in € millions, except percentages) |       |   |            |   |                           |  

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|           |   |                                            |    
|---------- | - | ------------------------------------------ | ---
|CHAPTER 11 | | | OTHER FINANCIAL INFORMATION ON THE COMPANY | 100
|          

|In 2004 the IFRS operating income in the mail division
          was higher than under US GAAP. This was caused by the unwinding of an
          insurance contract. The agreement with an insurance company related
          to settling future wage guarantees that was entered in 2001, was terminated
          in December 2004 following an unfavourable court decision with regard
          to the timing of the deductibility of the consideration for tax purposes.
          This higher result under IFRS was partly offset by higher pension charges.
          Within express the difference between IFRS and US GAAP operating income
          was primarily the result of amortisation of other long lived intangible
          assets recognised under US GAAP prior to 1 January 2004 and higher pension
          expenses and expenses relating to share based payments under IFRS.
        RECENT US GAAP ACCOUNTING PRONOUNCEMENTS
        The Financial Accounting Standards Board in the United
          States (FASB) has issued certain Statements of Financial Accounting
          Standards (SFAS), each of which, when adopted, could affect our consolidated
          financial statements for US GAAP reporting.
        In September 2006 the FASB issued SFAS 157, Fair
          Value Measures, (SFAS 157). This statement enhances the guidance
          for using fair value to measure assets and liabilities. SFAS 157 provides
          a single definition of fair value, together with a framework for measuring
          it, and requires additional disclosure about the use of fair value to
          measure assets and liabilities. We are required to adopt this pronouncement
          effective 1 January 2008. We are evaluating the impact this standard
          will have on our financial statements.
        In September 2006, the FASB issued FASB Staff Position
          (FSP) No. AUG Air-, Accounting for Planned Major Maintenance Activities.
          The FSP prohibits the use of the accrue-in-advance method of accounting
          for planned major maintenance activities in annual and interim reporting
          periods. This FSP amends the requirements of American Institute of Certified
          Public Accountants (AICPA) Audit and Accounting Guide, Airlines.
          This FSP is effective for us starting 1 January 2007. We do not expect
          this FSP will have an impact on our financial statements related to
          the maintenance of our aircraft, as our current practice is to expense
          such maintenance costs when incurred.
        In June 2006, the FASB issued FASB interpretation No.
          48,Accounting for Uncertainty in Income taxes
          an interpretation of FASB Statement No. 109, Accounting for Income Taxes.
          This interpretation prescribes a recognition threshold and measurement
          attribute for the financial statement recognition and measurement of
          a tax position taken or expected to be taken in a tax return. This interpretation
          also provides guidance on derecognition, classification, interest and
          penalties, accounting in interim periods, disclosure, and transition.
          This interpretation is effective for us starting 1 January 2007. We
          are evaluating the impact this interpretation will have on our financial
          statements.
        In June 2006, the Emerging Issues Task Force (EITF)
          of the FASB ratified EITF 06-2, Accounting for Sabbatical Leave and
          Other Similar Benefits Pursuant to FASB Statement No. 43, Accounting
          for Compensated Absences (SFAS 43). This pronouncement provides |  | guidelines under which sabbatical leave or other similar
          benefits provided to an employee are considered to accumulate, as defined
          in SFAS 43. If such benefits are deemed to accumulate, then the compensation
          cost associated with a sabbatical or other similar benefit arrangement
          should be accrued over the requisite service period. The provisions
          of this pronouncement are effective for us starting 1 January 2007 and
          allow for either retrospective application or a cumulative effect adjustment
          approach upon adoption. We do not expect the adoption of this pronouncement
          will have a material impact on our financial statements.
        In March 2006, the EITF of the FASB issued EITF 06-3,
          How Taxes Collected from Customers and Remitted to Governmental Authorities
          Should be Presented in the Income Statement (That is, Gross versus Net
          Presentation). This pronouncement requires disclosure of a companies
          accounting policy regarding the gross or net presentation of point-of-sales
          taxes such as sales tax and value-added tax. If taxes included in gross
          revenues are significant, the amount of such taxes for each period for
          which an income statement is presented should also be disclosed. This
          pronouncement is effective for us starting 1 January 2007. We do not
          expect that the adoption of this pronouncement will have a material
          impact on our financial statements as we report such revenues on the
          net basis.
        The EITF of the FASB issued EIFT 05 6,Determining
          the Amortisation Period for Leasehold Improvements Purchased after Lease
          Inception or Acquired in a Business Combination. This pronouncement
          requires that leasehold improvements acquired in a business combination
          or purchased subsequent to the inception of the lease should be amortised
          over the lesser of the useful life of the asset or the lease term that
          includes reasonably assured lease renewals as determined on the date
          of acquisition of the leasehold improvement. We were required to adopt
          this pronouncement effective 1 January 2006. The adoption of this pronouncement
          did not have an impact on our financial statements.
        QUANTITATIVE AND QUALITATIVE DISCLOSURES
          ABOUT MARKET RISK
        Our activities expose us to a variety of financial risks,
          such as market risks (including foreign currency exchange risk, interest
          rate risk and commodity price risk), credit risk and liquidity risk.
          All of these risks arise in the normal course of business. In order
          to manage the risk arising from these exposures, we utilise a variety
          of foreign exchange, interest rate and commodity forward contracts,
          options and swaps to hedge certain exposures.
        We use derivative financial instruments solely for the
          purpose of hedging underlying exposures. We enter into contracts related
          to derivative financial instruments for periods commensurate with our
          underlying exposures and do not take positions independent of these
          exposures. None of these financial instruments are leveraged or used
          for trading purposes or to take speculative positions. For more information
          see the note on Financial Risk Management in chapter 12.
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| | FINANCIAL STATEMENTS | | | CHAPTER 12
|

| | Good
        enough is never 
        enough. I always want to 
        do better.
|- | -----------------------------------------------------------------------------------
| 
| 
| 

|                                
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|2006 ANNUAL REPORT AND FORM 20-F
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 
|          

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
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| | TNT
      POST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| | If youre
      going to try to talk Coryse into doing something, youd better know
      your stuff. If you dont, youll regret it and shell out-manoeuvre
      you before you know whats happening. The point is that Coryse is extremely
      bright. An expert chess player, you know shes going to make the best
      of every situation. And she does. The amazing thing is, though, she does
      it entirely selflessly and with the greatest respect for others. In her
      role as part-time team coach, accepting people as they are and making the
      most of everyones positive qualities is paramount. Things never go
      badly; its just that they can be done better                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| | Ive been
        trying to work out how my work and I fit within the idea of All
        the right connections, says Coryse. It took me a while,
        but then I realised that there are basically four areas where connections
        come into play: between my colleagues and I, with my boss, with clients
        and between what we do today and how it can be done better tomorrow. I
        think if you handle the latter properly, the rest all falls into place
         the question is how.
      My approach
        to improving is a system I like to call the TIPTOP system. In any working
        process, or on a personal level if need be, there are things we do well
        (the TOPS), and things that can be done better (TIPS). The idea is to
        maintain the TOPS of today and to make sure that you concentrate on transforming
        the TIPS. Then everythings TIPTOP, (she laughs). Joking
        aside, it works. I like to let my colleagues suggest new ways of improving
        on what we do together. If they are allowed to take responsibility for
        their own actions, |  | it enhances their
        enjoyment and at the same time increases their devotion to the company.
        I think we all like to feel as if weve achieved something when we
        go home each day.
      Another way
        I like to help my team succeed is to organise team outings. Weve
        had cooking evenings, weve been bowling. There have been lots of
        group events. I learnt some time ago that the trick to extracting the
        most out of everyone  call it positive manipulation if you have
        to  is first to get to know them. That is best achieved in an informal
        setting. They open up; you discover peoples qualities and what they
        enjoy doing. What theyre not so good at. Once you know what people
        are really about, you can use their positive qualities in the workplace.
        You know that theyre going to do well in certain settings and, again,
        theyll feel better about themselves, the company, etc. Okay 
        its a strategy. Maybe its in my nature and why I love chess.
        But at the end of the day, its the result that counts. Always do
        better.
      CORYSE MELFORTNT Post, Team Coach
        
        32 years old, single, 2 children | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 

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|101 |  |  | CHAPTER 12
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|2006 ANNUAL REPORT AND FORM 20-F
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|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 102
|          



|INDEX TO FINANCIAL STATEMENTS OF TNT
      N.V.                                          | PAGE
|---------------------------------------------------------------------------------------- | ----
|                                                                                         |     
|UNITED STATES
      OPINION                                                              | 103 
|                                                                                         |     
|CONSOLIDATED BALANCE
      SHEET                                                         | 105 
|                                                                                         |     
|CONSOLIDATED STATEMENTS
      OF INCOME                                                  | 106 
|                                                                                         |     
|CONSOLIDATED CASH
      FLOW STATEMENTS                                                  | 107 
|                                                                                         |     
|CONSOLIDATED STATEMENTS
      OF CHANGES IN TOTAL EQUITY                                 | 108 
|                                                                                         |     
|NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTS                                     | 109 
|                                                                                         |     
|GENERAL
      INFORMATION AND DESCRIPTION OF OUR BUSINESS                                | 109 
|                                                                                         |     
|SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES                                         | 109 
|                                                                                         |     
|RECENT
      IFRS PRONOUNCEMENTS                                                         | 115 
|                                                                                         |     
|CRITICAL
      ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING TNTS ACCOUNTING POLICIES | 115 
|                                                                                         |     
|NOTES TO THE CONSOLIDATED
      BALANCE SHEETS                                           | 118 
|                                                                                         |     
|NOTES TO THE CONSOLIDATED
      STATEMENTS OF INCOME                                     | 136 
|                                                                                         |     
|NOTES TO THE CONSOLIDATED
      CASH FLOW STATEMENTS                                     | 148 
|                                                                                         |     
|ADDITIONAL NOTES                                                                         | 151 
|                                                                                         |     
|TNT N.V. CORPORATE
      BALANCE SHEETS                                                  | 172 
|                                                                                         |     
|TNT N.V. CORPORATE
      STATEMENTS OF INCOME                                            | 172 
|                                                                                         |     
|NOTES TO THE CORPORATE
      BALANCE SHEETS AND STATEMENTS OF INCOME                     | 173 
|                                                                                         |     
|OTHER INFORMATION                                                                        | 177 
|                                                                                         |     
|EXTRACT
      FROM THE ARTICLES OF ASSOCIATION ON APPROPRIATION OF PROFIT                | 178 
|                                                                                         |     
|APPROPRIATION
      OF PROFIT                                                            | 178 
|                                                                                         |     
|SPECIAL
      CONTROL RIGHTS UNDER THE ARTICLES OF ASSOCIATION                           | 178 
|                                                                                         |     
|GROUP
      COMPANIES OF TNT N.V.                                                        | 178 
|                                                                                         |     
|SUBSEQUENT
      EVENTS                                                                  | 178 
|                                                                                         |     
|                                                                                        



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|103 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

UNITED STATES OPINION

To the General Meeting of Shareholders of TNT N.V.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have completed an integrated audit of TNT N.V.s 2006
  consolidated financial statements and of its internal control over financial
  reporting as of 31 December 2006 and audits of its 2005 and 2004 consolidated
  financial statements in accordance with the standards of the Public Company
  Accounting Oversight Board (United States). Our opinions, based on our audits,
  are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated balance sheets
  and the related consolidated statements of income, consolidated cash flow statements
  and consolidated statements of changes in total equity, as set out on pages
  105 to 171, present fairly, in all material respects, the financial position
  of TNT N.V. and its subsidiaries at 31 December 2006 and 2005, and the results
  of its operations and its cash flows for each of the three years in the period
  ended 31 December 2006 in conformity with International Financial Reporting
  Standards as adopted by the European Union. These consolidated financial statements
  are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.
  We conducted our audits of these statements in accordance with the standards
  of the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  of financial statements includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the financial statements, assessing the accounting
  principles used and significant estimates made by management, and evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

International Financial Reporting Standards as adopted by the
  European Union vary in certain significant respects from accounting principles
  generally accepted in the United States of America and as allowed by Item 18
  to Form 20-F. Information relating to the nature and effect of such differences
  is presented in Note 35 to the consolidated financial statements.

Internal control over financial reporting

Also, in our opinion, managements assessment, included
  in the accompanying Report of management on Internal Control over Financial
  Reporting, appearing on page 66 of the 2006 Annual Report/Form 20-F, that the
  Company maintained effective internal control over financial reporting as of
  31 December 2006 based on criteria established in Internal Control - Integrated
  Framework issued by the Committee of Sponsoring Organizations of the Treadway
  Commission (COSO), is fairly stated, in all material respects, based on those
  criteria.Furthermore, in our opinion, the Company maintained,
  in all material respects, effective internal control over financial reporting
  as of 31 December 2006, based on criteria established in Internal Control -
  Integrated Framework issued by the COSO. The Companys management is responsible
  for maintaining effective internal control over financial reporting and for
  its assessment of the effectiveness of internal control over financial reporting.
  Our responsibility is to express opinions on managements assessment and
  on the effectiveness of the Companys internal control over financial reporting
  based on our audit. We conducted our audit of internal control over financial
  reporting in accordance with the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and perform
  the audit to obtain reasonable assurance about whether effective internal control
  over financial reporting was maintained in all material respects. An audit of
  internal control over financial reporting includes obtaining an understanding
  of internal control over financial reporting, evaluating managements assessment,
  testing and evaluating the design and operating effectiveness of internal control,
  and performing such other procedures as we consider necessary in the circumstances.
  We believe that our audit provides a reasonable basis for our opinions.

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|2006 ANNUAL REPORT AND FORM 20-F
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 104
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A companys internal control over financial reporting
  is a process designed to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of consolidated financial statements
  for external purposes in accordance with the applicable accounting standards.
  A companys internal control over financial reporting includes those policies
  and procedures that (i) pertain to the maintenance of records that, in reasonable
  detail, accurately and fairly reflect the transactions and dispositions of the
  assets of the company; (ii) provide reasonable assurance that transactions are
  recorded as necessary to permit preparation of consolidated financial statements
  in accordance with applicable accounting standards, and that receipts and expenditures
  of the company are being made only in accordance with authorizations of management
  and directors of the company; and (iii) provide reasonable assurance regarding
  prevention or timely detection of unauthorized acquisition, use, or disposition
  of the companys assets that could have a material effect on the consolidated
  financial statements.

Because of its inherent limitations, internal control over
  financial reporting may not prevent or detect misstatements. Also, projections
  of any evaluation of effectiveness to future periods are subject to the risk
  that controls may become inadequate because of changes in conditions, or that
  the degree of compliance with the policies or procedures may deteriorate.

Amsterdam, 26 February 2007PricewaterhouseCoopers Accountants N.V.



Note that the United States opinion set out above is included
  for the purposes of TNT N.V.s Annual Report on Form 20-F for the year
  ended 31 December 2006 only and does not form part of TNT N.V. 2006 Annual Report.

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|105 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

CONSOLIDATED BALANCE
  SHEETS

|    |                                                                                                                             | At 31 December |      
|--- | --------------------------------------------------------------------------------------------------------------------------- | -------------- | -----
|    |                                                                                                                             |                |      
|    |                                                                                                                             |                | 2006 
|    |                                                                                                                             |                |      
|    | NON-CURRENT ASSETS                                                                                                          |                |      
|    |                                                                                                                             |                |      
|£1  | INTANGIBLE ASSETS                                                                                                           |                |      
|    |                                                                                                                             |                |      
|    | Goodwill                                                                                                                    |                | 1,573
|    |                                                                                                                             |                |      
|    | Other intangible assets                                                                                                     |                | 212  
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 1,785
|    |                                                                                                                             |                |      
|£2  | PROPERTY, PLANT AND EQUIPMENT                                                                                               |                |      
|    |                                                                                                                             |                |      
|    | Land and buildings                                                                                                          |                | 823  
|    |                                                                                                                             |                |      
|    | Plant and equipment                                                                                                         |                | 342  
|    |                                                                                                                             |                |      
|    | Aircraft                                                                                                                    |                | 306  
|    |                                                                                                                             |                |      
|    | Other                                                                                                                       |                | 162  
|    |                                                                                                                             |                |      
|    | Construction in progress                                                                                                    |                | 45   
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 1,678
|    |                                                                                                                             |                |      
|£3  | FINANCIAL FIXED ASSETS                                                                                                      |                |      
|    |                                                                                                                             |                |      
|    | Investments in associates                                                                                                   |                | 58   
|    |                                                                                                                             |                |      
|    | Other loans receivable                                                                                                      |                | 7    
|    |                                                                                                                             |                |      
|£23 | Deferred tax assets                                                                                                         |                | 211  
|    |                                                                                                                             |                |      
|    | Prepayments and accrued income                                                                                              |                | 38   
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 314  
|    |                                                                                                                             |                |      
|    | Total non-current assets                                                                                                    |                | 3,777
|    |                                                                                                                             |                |      
|    | CURRENT ASSETS                                                                                                              |                |      
|    |                                                                                                                             |                |      
|£4  | Inventory                                                                                                                   |                | 29   
|    |                                                                                                                             |                |      
|£5  | Accounts receivable                                                                                                         |                | 1,561
|    |                                                                                                                             |                |      
|£23 | Income tax receivable                                                                                                       |                | 8    
|    |                                                                                                                             |                |      
|£6  | Prepayments and accrued income                                                                                              |                | 227  
|    |                                                                                                                             |                |      
|£7  | Cash and cash equivalents                                                                                                   |                | 297  
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 2,122
|    |                                                                                                                             |                |      
|£8  | Assets held for sale                                                                                                        |                | 409  
|    |                                                                                                                             |                |      
|    | Total assets                                                                                                                |                | 6,308
|    |                                                                                                                             |                |      
|    |                                                                                                                             |                |      
|    | EQUITY                                                                                                                      |                |      
|    |                                                                                                                             |                |      
|    | Equity attributable to the equity holders
        of the parent                                                             |                | 1,983
|    |                                                                                                                             |                |      
|    | Minority interests                                                                                                          |                | 25   
|    |                                                                                                                             |                |      
|£9  |                                                                                                                             | total          | 2,008
|    |                                                                                                                             |                |      
|    | NON-CURRENT LIABILITIES                                                                                                     |                |      
|    |                                                                                                                             |                |      
|£23 | Deferred tax liabilities                                                                                                    |                | 240  
|    |                                                                                                                             |                |      
|£10 | Provisions for pension liabilities                                                                                          |                | 23   
|    |                                                                                                                             |                |      
|£11 | Other employee benefit obligations                                                                                          |                | 57   
|    |                                                                                                                             |                |      
|£12 | Other provisions                                                                                                            |                | 106  
|    |                                                                                                                             |                |      
|£13 | Long term debt                                                                                                              |                | 1,183
|    |                                                                                                                             |                |      
|    | Accrued liabilities                                                                                                         |                | 3    
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 1,612
|    |                                                                                                                             |                |      
|    | CURRENT LIABILITIES                                                                                                         |                |      
|    |                                                                                                                             |                |      
|    | Trade accounts payable                                                                                                      |                | 308  
|    |                                                                                                                             |                |      
|£12 | Short term provisions                                                                                                       |                | 87   
|    |                                                                                                                             |                |      
|£14 | Other current liabilities                                                                                                   |                | 731  
|    |                                                                                                                             |                |      
|£23 | Income tax payable                                                                                                          |                | 280  
|    |                                                                                                                             |                |      
|£15 | Accrued current liabilities                                                                                                 |                | 1,136
|    |                                                                                                                             |                |      
|    |                                                                                                                             | total          | 2,542
|    |                                                                                                                             |                |      
|£8  | Liabilities related to assets classified
        as held for sale                                                           |                | 146  
|    |                                                                                                                             |                |      
|    | Total liabilities and equity                                                                                                |                | 6,308
|    |                                                                                                                             |                |      
|    | (in € millions, except percentages)                                                                                         |                |      
|    |  the figures £
      in the line items of these financial statements refer to the notes to the
      financial statements. | .              |      
|    |  the accompanying notes form an integral
        part of the financial statements.                                         |                |      



|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

---



Back to Contents

|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 106
|          

CONSOLIDATED STATEMENTS
  OF INCOME

|           |                                                                                        | Year ended at 31 December |  
|---------- | -------------------------------------------------------------------------------------- | ------------------------- | -
|           |                                                                                        |                           |  
|           |                                                                                        | 2006                      |  
|           |                                                                                        |                           |  
|£16        | Net sales                                                                              | 9,948                     |  
|           |                                                                                        |                           |  
|£17        | Other operating revenues                                                               | 112                       |  
|           |                                                                                        |                           |  
|           | Total revenues                                                                         | 10,060                    |  
|           |                                                                                        |                           |  
|£18        | Other income                                                                           | 65                        |  
|           |                                                                                        |                           |  
|           | Cost of materials                                                                      | (409                      | )
|           |                                                                                        |                           |  
|           | Work contracted out and other external
        expenses                                | (4,160                    | )
|           |                                                                                        |                           |  
|£19        | Salaries, pensions and social security
        contributions                           | (3,384                    | )
|           |                                                                                        |                           |  
|£
      20 | Depreciation, amortisation and impairments                                             | (318                      | )
|           |                                                                                        |                           |  
|£21        | Other operating expenses                                                               | (578                      | )
|           |                                                                                        |                           |  
|           | Total operating expenses                                                               | (8,849                    | )
|           |                                                                                        |                           |  
|           | Operating income                                                                       | 1,276                     |  
|           |                                                                                        |                           |  
|           | Interest and similar income                                                            | 199                       |  
|           |                                                                                        |                           |  
|           | Interest and similar expenses                                                          | (246                      | )
|           |                                                                                        |                           |  
|£22        | Net financial (expense)/income                                                         | (47                       | )
|           |                                                                                        |                           |  
|           | Results from investments in associates                                                 | (6                        | )
|           |                                                                                        |                           |  
|           | Profit before income taxes                                                             | 1,223                     |  
|           |                                                                                        |                           |  
|£23        | Income taxes                                                                           | (395                      | )
|           |                                                                                        |                           |  
|           | Profit for the year from continuing
        operations                                 | 828                       |  
|           |                                                                                        |                           |  
|£8         | Profit/(loss) from discontinued operations                                             | (157                      | )
|           |                                                                                        |                           |  
|           | Profit for the year                                                                    | 671                       |  
|           |                                                                                        |                           |  
|           | Attributable to:                                                                       |                           |  
|           |                                                                                        |                           |  
|           | Minority interests                                                                     | 1                         |  
|           |                                                                                        |                           |  
|           | Equity holders of the parent                                                           | 670                       |  
|           |                                                                                        |                           |  
|           |                                                                                        |                           |  
|           |                                                                                        |                           |  
|           | Earnings per ordinary share (in €
        cents)1                                      | 159.3                     |  
|           |                                                                                        |                           |  
|           | Earnings per diluted ordinary share (in
        € cents)2                              | 158.1                     |  
|           |                                                                                        |                           |  
|           | Earnings from continuing operations per
        ordinary share (in € cents)1           | 196.6                     |  
|           |                                                                                        |                           |  
|           | Earnings from continuing operations per
        diluted ordinary share (in € cents)2   | 195.1                     |  
|           |                                                                                        |                           |  
|           | Earnings from discontinued operations per
        ordinary share (in € cents)1         | (37.3                     | )
|           |                                                                                        |                           |  
|           | Earnings from discontinued operations per
        diluted ordinary share (in € cents)2 | (37.0                     | )
|           |                                                                                        |                           |  

| | (in € millions, except percentages and
      per share data)
| | ------------------------------------------------------------
| | 1                                                           
| | 2                                                           
| |                                                            
| |                                                            



|
|
|
|

---



Back to Contents

|    |                      |   |           
|--- | -------------------- | - | ----------
|107 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

CONSOLIDATED CASH FLOW
  STATEMENTS

|    |                                                                            | Year ended at 31 December |  
|--- | -------------------------------------------------------------------------- | ------------------------- | -
|    |                                                                            |                           |  
|    |                                                                            | 2006                      |  
|    |                                                                            |                           |  
|    | CASH FLOWS FROM CONTINUING OPERATIONS                                      |                           |  
|    |                                                                            |                           |  
|    | Profit before income taxes                                                 | 1,223                     |  
|    |                                                                            |                           |  
|    | Adjustments for:                                                           |                           |  
|    |                                                                            |                           |  
|    | Depreciation, amortisation and impairments                                 | 318                       |  
|    |                                                                            |                           |  
|    | Share based payments                                                       | 9                         |  
|    |                                                                            |                           |  
|    | Investment income:                                                         |                           |  
|    |                                                                            |                           |  
|    | (Profit)/loss on sale of property, plant
        and equipment             | (61                       | )
|    |                                                                            |                           |  
|    | Interest and similar income                                                | (199                      | )
|    |                                                                            |                           |  
|    | Foreign exchange (gains) and losses                                        |                           |  
|    |                                                                            |                           |  
|    | Interest and similar expenses                                              | 246                       |  
|    |                                                                            |                           |  
|    | Results from investments in associates                                     | 6                         |  
|    |                                                                            |                           |  
|    | Changes in provisions:                                                     |                           |  
|    |                                                                            |                           |  
|    | Pension liabilities                                                        | (124                      | )
|    |                                                                            |                           |  
|    | Other provisions                                                           | 10                        |  
|    |                                                                            |                           |  
|    | Changes in working capital:                                                |                           |  
|    |                                                                            |                           |  
|    | Inventory                                                                  | (5                        | )
|    |                                                                            |                           |  
|    | Accounts receivable                                                        | (170                      | )
|    |                                                                            |                           |  
|    | Other current assets                                                       | (29                       | )
|    |                                                                            |                           |  
|    | Trade accounts payable                                                     | 80                        |  
|    |                                                                            |                           |  
|    | Other current liabilities excluding short
        term financing and taxes | 34                        |  
|    |                                                                            |                           |  
|    | Cash generated from operations                                             | 1,338                     |  
|    |                                                                            |                           |  
|    | Interest paid                                                              | (199                      | )
|    |                                                                            |                           |  
|    | Income taxes paid                                                          | (282                      | )
|    |                                                                            |                           |  
|£24 | Net cash from operating activities                                         | 857                       |  
|    |                                                                            |                           |  
|    | Acquisition of group companies (net of
        cash)                       | (89                       | )
|    |                                                                            |                           |  
|    | Disposal of group companies and joint ventures                             | 1,365                     |  
|    |                                                                            |                           |  
|    | Investments in associates                                                  | (20                       | )
|    |                                                                            |                           |  
|    | Disposal of associates                                                     |                           |  
|    |                                                                            |                           |  
|    | Capital expenditure on intangible assets                                   | (103                      | )
|    |                                                                            |                           |  
|    | Disposal of intangible assets                                              | 2                         |  
|    |                                                                            |                           |  
|    | Capital expenditure on property, plant
        and equipment               | (277                      | )
|    |                                                                            |                           |  
|    | Proceeds from sale of property, plant and
        equipment                | 65                        |  
|    |                                                                            |                           |  
|    | Other changes in (financial) fixed assets                                  | 7                         |  
|    |                                                                            |                           |  
|    | Changes in minority interests                                              | 7                         |  
|    |                                                                            |                           |  
|    | Interest received                                                          | 111                       |  
|    |                                                                            |                           |  
|£25 | Net cash used in investing activities                                      | 1,068                     |  
|    |                                                                            |                           |  
|    | Repurchases of shares                                                      | (1,747                    | )
|    |                                                                            |                           |  
|    | Other equity changes                                                       | 52                        |  
|    |                                                                            |                           |  
|    | Proceeds from long term borrowings                                         | 2                         |  
|    |                                                                            |                           |  
|    | Repayments to long term borrowings                                         | (53                       | )
|    |                                                                            |                           |  
|    | Proceeds from short term borrowings 1                                      | 328                       |  
|    |                                                                            |                           |  
|    | Repayments to short term borrowings                                        | (166                      | )
|    |                                                                            |                           |  
|    | Proceeds from finance leases                                               |                           |  
|    |                                                                            |                           |  
|    | Repayments to finance leases                                               | (10                       | )
|    |                                                                            |                           |  
|    | Dividends paid                                                             | (282                      | )
|    |                                                                            |                           |  
|    | Financing relating to our discontinued
        operations                  | (276                      | )
|    |                                                                            |                           |  
|£26 | Net cash used in financing activities                                      | (2,152                    | )
|    |                                                                            |                           |  
|    | Change in cash from continuing operations                                  | (227                      | )
|    |                                                                            |                           |  
|    | CASH FLOWS FROM DISCONTINUED OPERATIONS                                    |                           |  
|    |                                                                            |                           |  
|    | Net cash from operating activities                                         | (63                       | )
|    |                                                                            |                           |  
|    | Net cash used in investing activities                                      | (30                       | )
|    |                                                                            |                           |  
|    | Net cash used in financing activities                                      | 36                        |  
|    |                                                                            |                           |  
|    | Change in cash from discontinued operations                                | (57                       | )
|    |                                                                            |                           |  
|£27 | TOTAL CHANGES IN CASH                                                      | (284                      | )
|    |                                                                            |                           |  

| | (in € millions, except percentages)
| | -----------------------------------
| | 1                                  
| |                                   
| |                                   
| |                                   

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

---



Back to Contents

|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 108
|          

CONSOLIDATED STATEMENTS
  OF CHANGES IN TOTAL EQUITY

|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|--------------------------------------------------- | -------------------- | - | -------------------------------- | - | --------------------------------------- | - | --------------- | - | -------------- | - | ----------------- | - | -------------------------------------------------- | - | ----------------- | - | ------------ | -
|                                                    | Issued share capital |   | Additional paid in
      capital |   | Cumulative translation
      adjustment |   | Hedging reserve |   | Other reserves |   | Retained earnings |   | Attributable to
      equity holders of the parent |   | Minority interest |   | Total equity |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Balance at 1 January 2004                           | 230                  |   | 1,421                            |   |                                         |   |                 |   | 1,115          |   | 215               |   | 2,981                                              |   | 17                |   | 2,998        |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Profit for the year                                 |                      |   |                                  |   |                                         |   |                 |   |                |   | 752               |   | 752                                                |   |                   |   | 752          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Currency translation adjustment                     |                      |   |                                  |   | (35)                                    |   |                 |   | 6              |   |                   |   | (29                                                | ) | 2                 |   | (27          | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Other                                               |                      |   |                                  |   |                                         |   |                 |   | (3             | ) |                   |   | (3                                                 | ) |                   |   | (3           | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total recognised income for the year                |                      |   |                                  |   | (35                                     | ) |                 |   | 3              |   | 752               |   | 720                                                |   | 2                 |   | 722          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Final dividend previous year                        |                      |   |                                  |   |                                         |   |                 |   |                |   | (142              | ) | (142                                               | ) |                   |   | (142         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Appropriation of net income                         |                      |   |                                  |   |                                         |   |                 |   | 73             |   | (73               | ) |                                                    |   |                   |   |              |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Interim dividend current year                       |                      |   |                                  |   |                                         |   |                 |   |                |   | (95               | ) | (95                                                | ) |                   |   | (95          | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Repurchases of shares                               |                      |   |                                  |   |                                         |   |                 |   | (151           | ) |                   |   | (151                                               | ) |                   |   | (151         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Share based compensation                            |                      |   |                                  |   |                                         |   |                 |   | 6              |   |                   |   | 6                                                  |   |                   |   | 6            |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Other                                               |                      |   |                                  |   |                                         |   |                 |   | 6              |   |                   |   | 6                                                  |   |                   |   | 6            |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total direct changes in equity                      |                      |   |                                  |   |                                         |   |                 |   | (66            | ) | (310              | ) | (376                                               | ) |                   |   | (376         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Balance at 31 December 2004                         | 230                  |   | 1,421                            |   | (35                                     | ) |                 |   | 1,052          |   | 657               |   | 3,325                                              |   | 19                |   | 3,344        |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Effect on adoption of IAS 32/39                     |                      |   |                                  |   |                                         |   |                 |   | (268           | ) |                   |   | (268                                               | ) |                   |   | (268         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Balance at 1 January 2005                           | 230                  |   | 1,421                            |   | (35                                     | ) |                 |   | 784            |   | 657               |   | 3,057                                              |   | 19                |   | 3,076        |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Profit for the year                                 |                      |   |                                  |   |                                         |   |                 |   |                |   | 659               |   | 659                                                |   | 2                 |   | 661          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Gains/(losses) on cashflow hedges, net
      of tax |                      |   |                                  |   |                                         |   | (12)            |   |                |   |                   |   | (12                                                | ) |                   |   | (12          | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Currency translation adjustment                     |                      |   |                                  |   | 19                                      |   |                 |   |                |   |                   |   | 19                                                 |   |                   |   | 19           |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total recognised income for the year                |                      |   |                                  |   | 19                                      |   | (12             | ) |                |   | 659               |   | 666                                                |   | 2                 |   | 668          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Final dividend previous year                        |                      |   |                                  |   |                                         |   |                 |   |                |   | (168              | ) | (168                                               | ) |                   |   | (168         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Appropriation of net income                         |                      |   |                                  |   |                                         |   |                 |   | 489            |   | (489              | ) |                                                    |   |                   |   |              |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Interim dividend current year                       |                      |   |                                  |   |                                         |   |                 |   |                |   | (100              | ) | (100                                               | ) |                   |   | (100         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Repurchases of shares                               |                      |   |                                  |   |                                         |   |                 |   | (231           | ) |                   |   | (231                                               | ) |                   |   | (231         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Share based compensation                            |                      |   |                                  |   |                                         |   |                 |   | 10             |   |                   |   | 10                                                 |   |                   |   | 10           |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Other                                               |                      |   |                                  |   |                                         |   |                 |   | 28             |   |                   |   | 28                                                 |   | (4                | ) | 24           |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total direct changes in equity                      |                      |   |                                  |   |                                         |   |                 |   | 296            |   | (757              | ) | (461                                               | ) | (4                | ) | (465         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Balance at 31 December 2005                         | 230                  |   | 1,421                            |   | (16                                     | ) | (12             | ) | 1,080          |   | 559               |   | 3,262                                              |   | 17                |   | 3,279        |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Profit for the year                                 |                      |   |                                  |   |                                         |   |                 |   |                |   | 670               |   | 670                                                |   | 1                 |   | 671          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Gains/(losses) on cashflow hedges, net
      of tax |                      |   |                                  |   |                                         |   | (9              | ) |                |   |                   |   | (9                                                 | ) |                   |   | (9           | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Currency translation adjustment                     |                      |   |                                  |   | (1                                      | ) |                 |   |                |   |                   |   | (1                                                 | ) |                   |   | (1           | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total recognised income for the year                |                      |   |                                  |   | (1                                      | ) | (9              | ) |                |   | 670               |   | 660                                                |   | 1                 |   | 661          |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Final dividend previous year                        |                      |   |                                  |   |                                         |   |                 |   |                |   | (173              | ) | (173                                               | ) |                   |   | (173         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Appropriation of net income                         |                      |   |                                  |   |                                         |   |                 |   | 386            |   | (386              | ) |                                                    |   |                   |   |              |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Interim dividend current year                       |                      |   |                                  |   |                                         |   |                 |   |                |   | (109              | ) | (109                                               | ) |                   |   | (109         | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Repurchases and cancellation of shares              | (27                  | ) | (176                             | ) |                                         |   |                 |   | (1,533         | ) |                   |   | (1,736                                             | ) |                   |   | (1,736       | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Share based compensation                            |                      |   |                                  |   |                                         |   |                 |   | 13             |   |                   |   | 13                                                 |   |                   |   | 13           |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Other                                               |                      |   |                                  |   | 12                                      |   |                 |   | 54             |   |                   |   | 66                                                 |   | 7                 |   | 73           |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Total direct changes in equity                      | (27                  | ) | (176                             | ) | 12                                      |   |                 |   | (1,080         | ) | (668              | ) | (1,939                                             | ) | 7                 |   | (1,932       | )
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|Balance at 31 December 2006                         | 203                  |   | 1,245                            |   | (5                                      | ) | (21             | ) | 0              |   | 561               |   | 1,983                                              |   | 25                |   | 2,008        |  
|                                                    |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  
|(in € millions)                                     |                      |   |                                  |   |                                         |   |                 |   |                |   |                   |   |                                                    |   |                   |   |              |  



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NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS GENERAL INFORMATION AND DESCRIPTION
    OF OUR BUSINESS TNT N.V. (formerly called TPG N.V.) is a public limited liability
  company domiciled in Amsterdam, the Netherlands. The consolidated financial
  statements include the financial statements of TNT N.V. and its consolidated
  subsidiaries (hereafter referred to as we, TNT, our
  or us). We changed our name from TNT Post Group N.V. to TPG N.V.
  on 6 August 2001 and we changed our name from TPG N.V. to TNT N.V. on 11 April
  2005. TNT N.V. was incorporated under the laws of the Netherlands on 29 December
  1997 and is listed on the Amsterdam and New York stock exchanges. In 2006 we
  delisted from the London (effective 21 March 2006) and Frankfurt (effective
  1 June 2006) stock exchange, as the costs and requirements for these listings
  are not justified by the low trading volume in our shares at both stock exchanges. On 6 December 2005 we announced a strategy to focus on our
  core competency of providing delivery services by expertly managing delivery
  networks and our intention of selling the logistics business. On 23 August 2006
  we announced that we have signed a Sale and Purchase Agreement on the sale of
  the logistics business. On 4 November 2006 we completed the sale of the logistics
  division to affiliates of Apollo Management L.P. On 30 October 2006 we announced
  the decision to divest our freight management business. On 16 November 2006
  we signed a Sale and Purchase Agreement to sell our freight management business
  to French logistics service provider Geodis SA. On 5 February 2007 we completed
  the sale. We refer to Note 8 for further information on the sale of logistics
  and freight management. Our logistics division was reported as discontinued operations/
  assets held for sale as at 31 December 2005. In our statement of income for
  2006, 2005 and 2004 we have presented the net result of our discontinued logistics
  business on a separate line Profit/(loss) from discontinued operations. Our freight management business is reported as discontinued
  operations/assets held for sale. Consequently, in our statement of income for
  2006, 2005 and 2004 we have presented the net result of our discontinued freight
  management business on a separate line Profit/(loss) from discontinued
  operations. We have restated the comparative figures for the 2005 and
  2004 statements of income and cash flow to reflect the presentation of the freight
  management business as a discontinued operation. Based on our refined strategy we manage our business through
    two divisions: express and mail. The express division provides demand door-to-door
    express delivery services for customers sending documents, parcels and freight
    worldwide.The mail division primarily provides services for collecting,
  sorting, transporting and distributing domestic and international mail.




The consolidated financial statements have been authorised
  for issue by our Board of Management and our Supervisory Board on 26 February
  2007 and are subject to adoption at the annual general meeting of shareholders
  on 20 April 2007. SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES The consolidated financial statements of TNT have been prepared
    in accordance with International Financial Reporting Standards (IFRS) as adopted
    by the European Union (EU). IFRS includes the application of International
    Financial Reporting Standards including International Accounting Standards
    (IAS) and related Interpretations of the International Financial Reporting
    Interpretations Committee (IFRIC) and Interpretations of the Standing Interpretations
    Committee (SIC). For TNT, there are no differences between the IFRS as adopted
    by the EU and the IFRS as issued by the International Accounting Standards
    Board (IASB). The IASB has issued certain International Financial Reporting
    Standards or amendments thereon, and the IFRIC has issued certain interpretations,
    each of which, when adopted, could affect our consolidated financial statements.
    Where relevant for TNT we have stated the Standards and/or amendments and/or
    interpretations in Recent IFRS pronouncements including the potential
    impact. The preparation of financial statements in conformity with
  IFRS requires the use of certain critical accounting estimates. It also requires
  management to exercise its judgement in the process of applying TNTs accounting
  policies. The areas involving a higher degree of judgement or complexity, or
  areas where assumptions and estimates are significant to the consolidated financial
  statements, are disclosed in Critical accounting estimates and judgements
  in applying TNTs accounting policies. The policies set out below have been consistently applied to
  all the years presented except for those relating to the recognition and measurement
  of financial instruments. We have made use of the exemption available under
  IFRS 1, First-time Adoption of International Financial Reporting Standards,
  to only apply IAS 32, Financial Instruments: Disclosure and Presentation,
  and IAS 39, Financial Instruments: Recognition and Measurement, from
  1 January 2005. The policies applied to financial instruments for 2004 and further
  are disclosed separately hereafter. The application of IAS 32 and IAS 39 as
  of 1 January 2005 has led to a decrease in equity of €268 million compared
  to previously used GAAP. The decrease in equity relates to: 
    €259 million relating to our commitment
      to purchase our ordinary shares from the State of the Netherlands on 5 January
      2005. This transfer of legal ownership was included in equity. As required
      under IAS 32 the amount was classified as a financial instrument and included
      in other current liabilities;
    €9 million being the estimated fair value
      of the put option for the 49% shares in TNT Arvil. All amounts included in the financial statements are presented
    in euros, unless indicated otherwise.


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|ConsolidationConsolidated financial information, including
        subsidiaries, associates and joint ventures, has been prepared using uniform
        accounting policies for like transactions and other events in similar
        circumstances. All significant intercompany transactions, balances and
        unrealised gains on transactions have been eliminated on consolidation.
        Unrealised losses are eliminated unless the transaction provides evidence
        of an impairment of the asset transferred.
      The consolidated financial statements include the financial
        statements of TNT N.V. and its group companies. A complete list of subsidiaries,
        associates and joint ventures included in our consolidated financial statements
        is filed for public review at the Chamber of Commerce in Amsterdam. This
        list has been prepared in accordance with the provisions of article 379
        (1) and article 414 of Book 2 of the Dutch Civil Code.
      As the financial statements of TNT N.V. are included in
        the consolidated financial statements, the corporate statements of income
        are presented in an abridged form (article 402 of Book 2 of the Dutch
        Civil Code).
      SUBSIDIARIESA subsidiary is an entity controlled, directly or indirectly,
        by TNT N.V. Control is regarded as the power to govern the financial and
        operating policies of the entity so as to obtain benefits from its activities.
        The existence and effect of potential voting rights that are currently
        exercisable or convertible are considered when assessing whether we control
        another entity. Subsidiaries are fully consolidated from the date on which
        control is transferred to us and are de-consolidated from the date on
        which control ceases.
      We use the purchase method of accounting to account for
        the acquisition of subsidiaries. The cost of an acquisition is measured
        at the fair value of the assets given, equity instruments issued and liabilities
        incurred or assumed at the date of exchange, plus costs directly attributable
        to the acquisition. Identifiable assets acquired and liabilities and contingent
        liabilities assumed in a business combination are measured initially at
        their fair value at the acquisition date, irrespective of the extent of
        any minority interest. The excess of the cost of acquisition over the
        fair value of our share of the identifiable net assets acquired is recorded
        as goodwill. If the cost of acquisition is less than the fair value of
        our share of the net assets of the subsidiary acquired, the difference
        is recognised directly in the income statement.
      The interest of minority shareholders in the acquiree
        is initially measured at the minoritys proportion of the net fair
        value of the assets, liabilities and contingent liabilities recognised.
        Losses applicable to the minority in excess of the minoritys interest
        in the subsidiarys equity are allocated against our interests except
        to the extent that the minority has a binding obligation and is able to
        make an additional investment to cover the losses.
      Our subsidiaries accounting policies have been
        changed where necessary to ensure consistency with our policies.
      ASSOCIATESAn associate is an entity, including an unincorporated
        entity such as a partnership, that is neither a subsidiary nor an interest
        in a joint venture and over whose commercial and |  | financial policy decisions TNT has the power to exert
        significant influence. Significant influence is the power to participate
        in the financial and operating policy decisions of the entity but is not
        control or joint control over those policies.
      Our share in the results of all significant associates
        is included in the consolidated statements of income using the equity
        method. The carrying value of our share in associates includes goodwill
        on acquisition and includes changes to reflect our share in net earnings
        of the respective companies, reduced by dividends received. Our share
        in non-distributed earnings of associates is included in other reserves
        within shareholders equity. When our share of any accumulated losses
        exceeds the acquisition value of the shares in the associates the book
        value is reduced to zero and the reporting of losses ceases, unless we
        are bound by guarantees or other undertakings in relation to the associate.
      JOINT VENTURESA joint venture is a contractual arrangement whereby we
        and one or more parties undertake an economic activity that is subject
        to joint control. Joint ventures in which we participate with other party(ies)
        are proportionately consolidated. In applying the proportionate consolidation
        method, our percentage share of the balance sheet and income statement
        items are included in our consolidated financial statements.
      Foreign currency translationThe results and financial position of all group entities
        (none of which has the currency of a hyperinflationary economy) that have
        a functional currency different from the presentation currency are translated
        into the presentation currency as follows: assets and liabilities for
        each balance sheet presented are translated at the closing rate at the
        date of that balance sheet, income and expenses for each income statement
        are translated at average exchange rates, and all resulting exchange differences
        are recognised as a separate component of equity (cumulative translation
        adjustment).
      FROM 1 JANUARY 2004 TO 31 DECEMBER 2004Foreign currency transactions are translated into euros,
        the functional currency, using the exchange rates at the dates of the
        transactions or at an average exchange rate for accounting purposes. Accounts
        receivable, liabilities, cash and cash equivalents denominated in foreign
        currencies are translated into euro at the rate of exchange at the balance
        sheet date or at the forward exchange rate if a forward contract has been
        entered into.
      Exchange rate differences are included in the statements
        of income under interest and similar income or interest and similar expenses.
      FROM 1 JANUARY 2005Foreign exchange gains and losses resulting from the settlement
        of transactions, including foreign currency transactions, and from the
        translation at the year end exchange rate of monetary assets and liabilities
        denominated in foreign currencies are recognised in the income statement,
        except where hedge accounting is applied. Foreign exchange differences
        arising from the translation of the net investment in foreign entities,
        and of borrowings and other currency instruments designated as hedges
        of such investments are taken to the cumulative translation adjustment
        on consolidation. When a foreign
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|operation is sold, such exchange differences are recognised
        in the income statement as part of the gain or loss on sale.
      Goodwill and fair value adjustments arising on the acquisition
        of a foreign entity are treated as assets and liabilities of the foreign
        entity and translated at the closing rate.
      Intangible assetsGOODWILLThe excess of the cost of acquisition over the fair value
        of our share of the identifiable net assets acquired is recorded as goodwill.
        Goodwill on acquisitions of subsidiaries and joint ventures is included
        in intangible assets. Goodwill on acquisition of associates is included
        in investments in associates.
      Goodwill arising on acquisitions is capitalised and subject
        to impairment review, both annually and when there are indications that
        the carrying value may not be recoverable. Goodwill is impaired if the
        recoverable amount of the cash generating unit to which it is allocated
        is lower than its carrying value. The recoverable amount is defined as
        the higher of a cash generating units fair value less costs to sell
        and its value in use using the discounted cash flow method. Impairments
        on goodwill recognised in prior periods can not be reversed.
      For the purpose of assessing impairment, corporate assets
        are allocated to specific cash generating units before impairment testing.
        The basis for this allocation is to the extent in which those assets contribute
        to the future cash flows of the unit under review.
      OTHER INTANGIBLE ASSETSCosts related to the development and installation of software
        for internal use are capitalised at historical cost and amortised over
        the estimated useful life. Apart from software, other intangible assets
        mainly include customer lists, assets under development, licences and
        concessions.
      An asset is transferred to its respective intangible
        asset category at the moment it is ready for use and is amortised on a
        straight-line method over its estimated useful life. Other intangible
        assets are valued at the lower of historical cost less amortisation and
        impairment.
      An impairment review is performed whenever a triggering
        event occurs. An intangible asset is impaired if the recoverable amount
        is lower than the carrying value. The recoverable amount is defined as
        the higher of an assets fair value less costs to sell and its value
        in use. Assets that have an indefinite useful life are not subject to
        amortisation and are tested annually for impairment. A triggering event
        is an event or change in circumstances indicating that the carrying amount
        may not be recoverable. For the purposes of assessing impairment, assets
        are grouped at the lowest levels for which there are separately identifiable
        cash flows being the cash generating units.Impairments are reversed if and to the extent that the
        impairment no longer exists.
      Property, plant and equipmentProperty, plant and equipment is valued at historical cost
        using a component approach, less depreciation or at the recoverable amount
        whenever impairment has taken place. In addition to costs of acquisition,
        we also include costs of bringing the asset to working condition, handling
        and installation costs and the |  | non-refundable purchase taxes. Depreciation is calculated
        using the straight-line method based on the estimated useful life, taking
        into account any residual value. The assets residual values and
        useful lives are reviewed, and adjusted if appropriate, at each balance
        sheet date.Subsequent costs are included in the assets carrying
        amount or recognised as a separate asset, as appropriate, only when it
        is probable that future economic benefits associated with the item will
        flow to us and the cost of the item can be measured reliably.
      Land is not depreciated. System software is capitalised
        and amortised as a part of the tangible fixed asset for which it was acquired
        to operate, because the estimated useful life is inextricably linked to
        the estimated useful life of the associated asset.
      An impairment review is performed whenever a triggering
        event occurs. Property, plant and equipment is impaired if the recoverable
        amount is lower than the carrying value. The recoverable amount is defined
        as the higher of an assets fair value less costs to sell and its
        value in use.
      An impairment loss recognised in prior periods for an
        asset shall be reversed if, and only if, there has been a change in the
        estimates used to determine the assets recoverable amount since
        the last impairment loss was recognised. For the purposes of assessing
        impairment, assets are grouped at the lowest levels for which there are
        separately identifiable cash flows being the cash generating units.
      Leases of property, plant and equipment are classified
        as finance leases if we have substantially all the risks and rewards of
        ownership. Finance leases are capitalised at the leases inception
        at the lower of the fair value of the leased property and the present
        value of the minimum lease payments. The corresponding rental obligations,
        net of finance charges, are included in long term debt. Property, plant
        and equipment acquired under finance leases is depreciated over the shorter
        of the assets useful life and the lease term.
      Financial instrumentsFROM 1 JANUARY 2004 TO 31 DECEMBER 2004We use derivative financial instruments as part of an
        overall risk-management strategy. When used, these instruments are applied
        as means of hedging exposure to foreign currency risk, interest rate risk
        and commodity risk connected to anticipated cash flows or existing assets
        and liabilities. We do not hold or issue derivative financial instruments
        for trading purposes.
      Gains and losses from foreign currency forward exchange
        contracts that are hedging anticipated cash flows are deferred in other
        assets or other liabilities and recognised in the statements of income,
        or as adjustments of carrying amounts, when the hedged transaction occurs.
        If an anticipated cash flow does not occur or is expected not to occur,
        the foreign currency forward exchange contract is terminated and any result
        is recognised in interest and similar income or interest and similar expenses.
      The net exposures of derivative financial instruments
        are revalued at the prevailing spot exchange rate. Realised and unrealised
        gains and losses resulting from hedges of on-balance sheet foreign currency
        exposure are included in interest and
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|similar income or in interest and similar expenses offsetting
        the revaluation of the underlying on-balance sheet items. Foreign currency
        gains and losses on derivative financial instruments used to hedge our
        net investments in foreign operations are recorded in equity, net of taxes.
      Premium or discounts arising at the inception of foreign
        currency derivatives are amortised over the life of the contract and included
        in interest and similar income or interest and similar expenses. Payments
        and receipts on interest rate swaps are recorded on an accruals basis.
        If interest rate swaps are terminated early, the gain or loss on interest
        is recorded within interest and similar income or interest and similar
        expenses.
      FROM 1 JANUARY 2005Financial instruments are accounted for in accordance with
        IAS 32 and IAS 39. We classify financial assets and liabilities into the
        following categories: derivatives, loans and receivables, held-to-maturity
        investments, available-for-sale financial assets and borrowings.
      Derivative financial instruments are recorded at fair
        value on our balance sheets. Derivatives not designated as hedges must
        be adjusted to fair value through income. If a derivative is designated
        as a hedge, depending on the nature of the hedge, changes in its fair
        value that are considered to be effective, as defined, either offset the
        change in fair value of the hedged assets, liabilities, or firm commitments
        through income, or are recorded in a separate component in shareholders
        equity until the hedged item is recorded in income. Any portion of a change
        in a derivatives fair value that is considered to be ineffective,
        or is excluded from the measurement of effectiveness, is immediately recorded
        in income.
      We document at the inception of the transaction the relationship
        between hedging instruments and hedged items, as well as its risk management
        objective and strategy for undertaking various hedge transactions. We
        also document the assessment, both at hedge inception and on an ongoing
        basis, of whether the derivatives that are used in hedging transactions
        are highly effective in offsetting changes in fair values or cash flows
        of hedged items.
      Changes in the fair value of derivatives that are designated
        and qualify as fair value hedges are recorded in the income statement,
        together with any changes in the fair value of the hedged asset or liability
        that are attributable to the hedged risk. Amounts accumulated in equity
        are recycled in the income statement in the periods when the hedged item
        will affect profit and loss (for example, when the forecasted sale that
        is hedged takes place). However, when the forecasted transaction that
        is hedged results in the recognition of a non-financial asset, the gains
        and losses previously deferred in equity are transferred from equity and
        included in the initial measurement of the asset or liability.
      When a hedging instrument expires or is sold, or when
        the hedge no longer meets the criteria for hedge accounting, any cumulative
        gains or losses existing in equity at that time, remains in equity until
        the forecasted transaction is ultimately recognised in the income statement.
        When a forecasted transaction is no longer expected to occur, the cumulative
        gain or loss that was reported in equity is immediately transferred to
        the income statement. |  | Loans and receivables are non-derivative financial assets
        with fixed or determinable payments that are not quoted in an active market
        and for which we have no intention of trading. They are included in current
        assets, except for maturities greater than 12 months after the balance
        sheet date. These are classified as non-current assets. Loans and receivables
        are included in trade and other receivables in the balance sheet.
      Held-to-maturity investments are non-derivative financial
        assets with fixed or determinable payments and fixed maturities where
        we have the positive intention and ability to hold to maturity.
      Available-for-sale financial assets are non-derivatives
        that are either designated in this category or not classified in any of
        the other categories above. They are included in non-current assets unless
        management intends to dispose of the investment within 12 months of the
        balance sheet date.
      Purchases and sales of investments are recognised on
        trade-date. The trade-date is the date on which we commit to purchase
        or sell the asset. Investments are initially recognised at fair value
        plus transaction costs. Investments are derecognised when the rights to
        receive cash flows from the investments have expired or have been transferred
        and we have transferred substantially all risks and rewards of ownership.
        Available-for-sale financial assets are carried at fair value. Loans and
        receivables and held-to-maturity investments are carried at amortised
        cost using the effective interest method. Unrealised gains and losses
        arising from changes in the fair value of securities classified as available-for-sale
        are recognised in equity. When securities classified as available-for-sale
        are sold or impaired, the accumulated fair value adjustments are included
        in the consolidated statements of income as gains and losses from investment
        securities.
      The fair values of quoted investments are based on current
        bid prices. If the market for a financial asset is not active (and for
        unlisted securities), we establish fair value by using valuation techniques.
        These include the use of recent arms length transactions, reference
        to other instruments that are substantially the same and discounted cash
        flow analysis refined to reflect the issuers specific circumstances.
      We assess at each balance sheet date whether there is
        objective evidence that a financial asset or a group of financial assets
        is impaired. In the case of equity securities classified as available-for-sale,
        a significant or prolonged decline in the fair value of the security below
        its cost is considered in determining whether the securities are impaired.
        If any such evidence exists for available-for-sale financial assets, the
        cumulative loss  measured as the difference between the acquisition
        cost and the current fair value, less any impairment loss on that financial
        asset previously recognised in profit or loss  is removed from equity
        and recognised in the income statement. Impairment losses on equity instruments
        recognised in the income statement are not reversed through the equity.
      Borrowings are recognised initially at fair value net
        of transaction costs incurred. Borrowings are subsequently stated at amortised
        costs; any difference between the proceeds (net of transaction costs)
        and the redemption value is recognised in the income statement over the
        period of the borrowings using the effective interest method.
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|InventoryInventories of raw materials and finished goods are valued
        at the lower of historical cost or net realisable value less any provision
        required for obsolescence. Historical cost is based on weighted average
        prices.
      Accounts receivableFROM 1 JANUARY 2004 TO 31 DECEMBER 2004Accounts receivable are stated at nominal value net of
        an allowance for doubtful receivables. Loans receivable from associated
        companies due within one year are included in accounts receivable.
      FROM 1 JANUARY 2005Accounts receivable are recognised initially at fair value
        and subsequently measured at amortised cost using the effective interest
        method, less provision for impairment. A provision for impairment of accounts
        receivable is established when there is objective evidence that we will
        not be able to collect all amounts due according to the original terms
        of the receivables. The amount of the provision is the difference between
        the assets carrying amount and the present value of estimated future
        cash flows, discounted at the effective interest rate. The amount of the
        provision is recognised in the income statement.
      Cash and cash equivalentsCash and cash equivalents are carried in the balance sheet
        at fair value. Cash and cash equivalents include cash at hand, bank account
        balances, bills of exchange and cheques (only those which can be cashed
        in the short term). All highly liquid investments with an original maturity
        of three months or less at date of purchase are considered to be cash
        equivalents. Bank overdrafts are not netted off from cash and cash equivalents.
      Assets held for sale and discontinued operationsAssets (or disposal groups) held for sale are
        classified as assets held for sale and stated at the lower of their carrying
        amount and fair value less costs to sell if their carrying amount is recovered
        principally through a sale transaction rather than through continuing
        use. Assets held for sale are no longer amortised or depreciated from
        the time they are classified as such.Operations that represent a separate major line of business
        or geographical area of operations, or is part of a single coordinated
        plan to dispose of a separate major line of business or geographical area
        of operations or is a subsidiary acquired exclusively with a view to resale
        and either have been disposed of or have been classified as held for sale,
        are presented as discontinued operations in our statements of income.
      EquityOrdinary shares are classified as equity. Incremental costs
        directly attributable to the issue of new shares or options are shown
        in equity as a deduction, net of tax, from the proceeds.
      Where any group company purchases the companys
        equity share capital (treasury shares), the consideration paid, including
        any directly attributable incremental costs (net of income taxes), is
        deducted from equity attributable to the companys shareholders until
        the shares are cancelled, reissued or disposed of. Where such shares are
        subsequently sold or reissued, any consideration received, net of any
        directly attributable incremental transaction costs and the related income
        tax effects, is included in equity attributable to the companys
        shareholders. |  | Incremental costs directly attributable to the issue of
        new shares or options for the acquisition of business combinations are
        included in the cost of acquisition as part of the purchase consideration.
      Provisions for pension liabilitiesPOST-EMPLOYMENT OBLIGATIONSThe obligation for all pension and other post-employment
        plans that qualify as defined benefit obligation is determined by calculating
        the present value of the defined benefit obligation and deducting the
        fair value of the plan assets. We use actuarial calculations (projected
        unit credit method) to measure the obligations and the costs. For the
        calculations, actuarial assumptions are made about demographic variables
        (such as employee turnover and mortality) and financial variables (such
        as future increases in salaries). The discount rate is determined by reference
        to market rates.
      Cumulative actuarial gains and losses are recognised
        for the portion that these exceed the higher of 10% of the obligation
        and 10% of the fair value of plan assets (corridor approach). The excess
        is recognised over the employees expected average remaining service
        lives.
      Past service costs, if any, are recognised on a straight-line
        basis over the average vesting period of the amended pension or early
        retirement benefits. Certain past service costs may be recognised immediately
        if the benefits are vested immediately.
      Gains or losses on the curtailment or settlement of a
        defined benefit plan are recognised at the date of the curtailment or
        settlement.
      Pension costs for defined contribution plans are expensed
        in the consolidated statements of income when incurred.
      Other employee benefit obligationsThese employee benefits include long-service leave or sabbatical
        leave, jubilee or other long service benefits, long term disability benefits
        and, if they are not payable wholly within twelve months after the end
        of the period, profit sharing, bonuses and deferred compensation.
      The expected costs of these benefits are recognised over
        the period of employment. Actuarial gains and losses and changes in actuarial
        assumptions, are charged or credited to income in the period such gain
        or loss occur. Further, all past service costs are recognised immediately.
      Other provisionsProvisions are recognised when there is a present obligation
        as a result of a past event, it is probable that an outflow of resources
        embodying economic benefits will be required to settle the obligation
        and a reliable estimate can be made of the amount of the obligation.
      Provisions are recorded for restructuring, retirements,
        onerous contracts and other obligations. Provisions are measured at the
        present value of managements best estimate of the expenditure required
        to settle the present obligation at the balance sheet date. The discount
        rate used to determine the present value reflects current market assessments
        of the time value of money and the risks specific to the liability. Provisions
        for onerous contracts are recorded when the
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unavoidable costs of meeting the obligation under the contract
  exceed the economic benefits expected to arise from that contract, taking into
  account impairment of fixed assets first. The provision recorded for restructuring
  largely relates to termination benefits. Termination benefits are payable when
  employment is terminated before the normal retirement date, or whenever an employee
  accepts voluntary redundancy in exchange for these benefits. We recognise termination
  benefits when we have committed to terminate the employment of current employees
  according to a detailed formal plan without possibility of withdrawal or provide
  termination benefits as a result of an offer made to encourage voluntary redundancy.
  Benefits falling due more than 12 months after balance sheet date are discounted
  to their present values. Trade accounts payableTrade accounts payable are recognised initially at fair value
    and subsequently measured at amortised cost using the effective interest method. Income taxesThe amount of income tax included in the statements of income
    is determined in accordance with the rules established by the taxation authorities,
    based on which income taxes are payable or recoverable. Deferred tax assets and liabilities, arising from temporary
  differences between the nominal values of assets and liabilities and the fiscal
  valuation of assets and liabilities, are calculated using the tax rates expected
  to apply when they are realised or settled. Deferred tax assets are recognised
  if it is probable that they will be realised. Deferred tax assets and liabilities
  where a legally enforceable right to offset exists and within the same consolidated
  tax group are presented net in the consolidated balance sheets. Revenue recognitionRevenues are recognised when services are rendered, goods are
    delivered or work is completed. Revenue is the gross inflow of economic benefits
    during the current year arising in the course of the ordinary activities when
    those inflows result in increases in equity, other than increases relating
    to contributions from equity participants. Revenues of delivered goods and services are recognised when: 
    we have transferred to the buyer the significant
      risks and rewards of ownership of the goods;
    we retain neither continuing managerial involvement
      to the degree usually associated with ownership nor effective control of
      the goods sold;
    the amounts of revenue are measured reliably;
    it is probable that the economic benefits
      associated with the transaction will flow to us;
    the costs to be incurred in respect of the
      transaction can be measured reliably and;
    the stage of completion of the transaction
      at the balance sheet date can be measured reliably. Revenue is measured at the fair value of the consideration
  of received amounts or receivable amounts. Amounts received in advance are recorded as accrued liabilities
  until services are rendered to customers, goods are delivered or work is completed,
  using the percentage of completion method, based on services provided.




NET SALESNet sales represent the revenues from the delivery of goods
    and services to third parties less discounts, credit notes and taxes levied
    on sales. Accumulated experience is used to estimate and provide for the discounts
    and returns. OTHER OPERATING REVENUESOther operating revenues relate to the sale of goods and rendering
    of services not related to our normal trading activities and mainly include
    rental income of temporarily leased-out property, passenger/ charter revenues,
    aircraft maintenance and engineering income and custom clearance income. Other incomeOther income includes net gains from the sale of property,
    plant and equipment and other gains. Profit-sharing and bonus plansWe recognise a liability and an expense for cash settled bonuses
    and profit-sharing, based on a formula that takes into consideration the profit
    attributable to our shareholders after certain adjustments. We recognise a
    provision where contractually obliged or where there is a past practice that
    has created a constructive obligation. Share based paymentsShare based payment transactions are transactions in which
    we receive benefits from our employees in consideration for our equity instruments.
    The fair value of the share based transactions is recognised as an expense
    (employee costs) and a corresponding increase in equity over the vesting period.
    The fair value of employee share based payments is calculated using the Monte
    Carlo model. The equity instruments granted do not vest until the employee
    completes a specified period of service. The amount recognised is adjusted
    over the vesting period for changes in the estimate of the number of securities
    that will be issued but not for changes in the fair value of those securities.
    Therefore, on vesting date the amount recognised is the exact number of securities
    that can be issued as of that date, measured at the fair value of those securities
    at grant date. Interest income and expenseInterest income and expense are recognised on a time-proportion
    basis using the effective interest method. Operating leasesLeases where the lessor retains substantially all the risks
    and rewards of ownership are classified as operating leases. Payments made
    under operating leases (net of any incentives received from the lessor) are
    charged to the income statement on a straight-line basis over the period of
    the lease. Dividend distributionDividend distribution to our shareholders is recognised as
    a liability in our financial statements in the year in which the dividends
    are approved by our shareholders. Accounting principles relating to the consolidated cash
    flow statementsThe cash flow statements have been prepared using the indirect
    method. Cash flows in foreign currencies have been translated at average exchange
    rates. Exchange rate differences affecting cash items are shown separately
    in the cash flow


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statements. Receipts and payments with respect to taxation
    on profits are included in the cash flow from operating activities. Interest
    payments are included in cash flows from operating activities while interest
    receipts are included in cash flows from investing activities. The cost of
    acquisition of new group companies, associated companies and investments,
    insofar as it was paid for in cash, is included in cash flows from investing
    activities. Acquisitions of group companies are presented net of cash balances
    acquired. Cash flows from derivatives are recognised in the statement of cash
    flows in the same category as those of the hedged item. In 2006 we have improved the format of the consolidated cashflow
  statement to conform to a more transparant presentation of cashflows from both
  continued and discontinued operations on the face of the consolidated cashflow
  statement. In 2005 the cashflows from discontinued operations were presented
  in the note on discontinued operations in the consolidated financial statements.
  The cashflows from discontinued operations relating the operating, investing
  and financing activities have now been summarised after the cashflows from continued
  operations on the face of the cashflow statement. The reconciliation of the
  cash and cash equivalent balances to the changes in cash according to the cashflow
  statements has now been presented in note 27 to the consolidated financial statements. Segment reportingWe identify our primary reporting segments based on our assessment
    of risks and rates of return which are affected predominantly by differences
    in our products and services. As a result of this assessment, we have identified
    two reportable segments: express and mail. The secondary reporting format
    is geographically based. Business relations between the companies within the
    segments of TNT are transacted at arms length prices. RECENT IFRS PRONOUNCEMENTS The IASB has issued certain International Financial Reporting
    Standards or amendments thereon, and the IFRIC has issued certain interpretations,
    each of which, when adopted, could affect our consolidated financial statements.
    Where relevant for TNT N.V. we have explained the Standards and/or amendments
    and/or interpretations below. Amendments to published standards effective in 2006IAS 19 (Amendment), Employee Benefits, is mandatory
    for accounting periods beginning on or after 1 January 2006. It introduces
    the option of an alternative recognition approach for actuarial gains and
    losses. It may impose additional recognition requirements for multi-employer
    plans where insufficient information is available to apply defined benefit
    accounting. It also adds new disclosure requirements. As TNT does not intend
    to change the accounting policy adopted for recognition of actuarial gains
    and losses, adoption of this amendment only impacts the format and extent
    of disclosures presented in the accounts. During 2006 the IASB and IFRIC issued: 
    IFRIC 7 Applying the Restatement Approachunder IAS 29, Financial Reporting in Hyperinflationary Economies
      and IFRIC 8 Scope of IFRS 2(effective for annual periods beginning
      on or after 1 May 2006) and;





    IFRIC 10 Interim Financial Reporting and
      Impairment(effective for annual periods beginning on or after 1 November
      2006) and;
    IFRIC 9 Reassessment of Embedded Derivatives(effective for annual periods beginning on or after 1 June 2006);
    IFRS 7 Financial Instruments: disclosures. We are currently evaluating the impact of adoption of these
  IFRS and IFRICs as of 1 January 2007, but do not anticipate a material
  impact on our financial statements. These standards have not been adopted before
  the effective date. During 2005 the IASB issued several amendments to IAS 39,Financial
    Instruments: Recognition and Measurement. The amendments relate to (a)
    the hedge accounting provisions, (b) the fair value option, (c) the requirements
    for financial guarantee contracts. All amendments have 1 January 2006 as the
    effective date. The adoption of the stated amendments did not have had a material
    impact on our financial statements. In December 2004, the IFRIC issued IFRIC 4, Determining
  whether an Arrangement contains a Lease. IFRIC 4 provides guidance on determining
  whether arrangements that do not take the legal form of a lease should be accounted
  for in accordance with IAS 17, Leases. It specifies that an arrangement contains
  a lease if it depends on the use of a specific asset and conveys a right to
  control the use of that asset. IFRIC 4 is effective as at 1 January 2006. The
  adoption of IFRIC 4 did not have a material impact on our financial statements. CRITICAL ACCOUNTING ESTIMATES AND
    JUDGEMENTS IN APPLYING TNTS ACCOUNTING POLICIES The preparation of our financial statements, in accordance
  with IAS 1, Presentation of Financial Statements, requires us to make
  estimates and assumptions that affect the reported amounts of assets and liabilities,
  revenues and expenses, and related disclosure of contingent assets and liabilities
  at the date of our financial statements. Our estimates and judgements are continually
  evaluated and are based on historical experience and other factors, including
  expectations of future events that are believed to be reasonable under the circumstances. We make estimates and assumptions concerning the future. The
  resulting accounting estimates will, by definition, seldom equal the related
  actual results. The estimates and assumptions that have a significant risk of
  causing a material adjustment to the carrying amounts of assets and liabilities
  within the next financial year are discussed below. Accounting for business combinations and impairment of goodwill
    and other long lived intangible assetsWe account for all our business combinations under the purchase
    accounting method. The cost of an acquired company is assigned to the tangible
    and intangible assets purchased and the liabilities assumed on the basis of
    their fair values at the date of acquisition. The determination of fair values
    of assets and liabilities acquired requires us to make estimates and use valuation
    techniques when market value is not readily available. Any excess of purchase
    price over the fair value of the tangible and intangible assets acquired is
    allocated to goodwill.


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|In determining impairments of intangible assets, tangible
        fixed assets and goodwill, management must make significant judgements
        and estimates to determine whether the cash flows generated by those assets
        are less than their carrying value. Determining cash flows requires the
        use of judgements and estimates that have been included in the companys
        strategic plans and long-range forecasts. The data necessary for the execution
        of the impairment tests are based on management estimates of future cash
        flows, which require estimating revenue growth rates and profit margins.
      Property, plant and equipmentProperty, plant and equipment is valued at historical cost
        using a component approach, less depreciation or at the recoverable amount
        whenever impairment has taken place. Depreciation is calculated using
        the straight-line method based on the estimated useful life, taking into
        account any residual value. The assets residual values and useful
        lives are based on our best estimates, and adjusted if appropriate, at
        each balance sheet date.
      Impairment of receivablesThe risk of uncollectibility of accounts receivable is
        primarily estimated based on prior experience with, and the past due status
        of, doubtful debtors, while large accounts are assessed individually based
        on factors that include ability to pay, bankruptcy and payment history.
        In addition, debtors in certain countries are subject to a higher collectibility
        risk, which is taken into account when assessing the overall risk of uncollectibility.
        Should the outcome differ from the assumptions and estimates, revisions
        to the estimated valuation allowances would be required.
      Employee benefitsPost-employment benefits represent obligations that will
        be settled in the future and require assumptions to project benefit obligations.
        Post-employment benefit accounting is intended to reflect the recognition
        of future benefit costs over the employees approximate service period,
        based on the terms of the plans and the investment and funding decisions
        made. The accounting requires us to make assumptions regarding variables
        such as discount rate, rate of compensation increase, return on assets,
        and future healthcare costs. We consult with outside actuaries regarding
        these assumptions at least annually. Changes in these key assumptions
        can have a significant impact on the defined benefit obligations, funding
        requirements and pension cost incurred. For a discussion of the current
        funded status and a sensitivity analysis with respect to pension plan
        assumptions, refer to note 10.
      RestructuringRestructuring charges mainly result from restructuring
        operations, including consolidations and/or relocations of operations,
        changes in our strategic plan, or managerial responses to declines in
        demand, increasing costs or other market factors. Restructuring provisions
        reflect many estimates, including those pertaining to separation costs,
        consolidation of excess facilities, contract settlements and tangible
        asset impairments. Actual experience has been and may continue to be different
        from these estimates.
      Accrued current liabilitiesWe also have to estimate the deferred revenues from stamps
        sold but not yet used by our customers. We use a seasonal |  | model based on historical figures in order to account
        for the seasonal effects in sales from stamps (for example, sales for
        Christmas greetings in November and December).In 2006 we have defined a more refined method of calculating
        the deferred revenue related to the sale of stamps in 2006. In accordance
        with IAS 8 the change in accounting estimate was recognised in the income
        statement for the period. The impact was an additional gain of €18
        million (pre-tax) and was recognised in Other operating expenses.
      Income taxesWe are subject to income taxes in numerous jurisdictions.
        Significant judgement is required in determining the worldwide provision
        and liability for income taxes. There are many transactions and calculations
        for which the ultimate tax determination is uncertain during the ordinary
        course of business. We recognise liabilities for tax issues based on estimates
        of whether additional taxes will be due, based on our best interpretation
        of the relevant tax laws. Where the final tax outcome of these matters
        is different from the amounts that were initially recorded, such differences
        will impact the income tax and deferred tax provisions in the period in
        which such determination is made.
      We recognise deferred tax assets to the extent that it
        is probable that future taxable profits will allow the deferred tax asset
        to be recovered. This is based on estimates of taxable income by jurisdiction
        in which we operate and the period over which deferred tax assets are
        recoverable. In the event that actual results differ from these estimates
        in future periods, and depending on the tax strategies that we may be
        able to implement, changes to the recognition of deferred tax assets could
        be required, which could impact our financial position and net profit.
      Accounting for discontinued operationsAccounting for discontinued operations requires the use
        of significant assumptions and estimates, such as the assumptions used
        in the fair value calculations as well as the estimated costs to sell.
        We have evaluated the assets held for sale of our discontinued logistics
        and freight management operations as a disposal group in performing our
        impairment analysis.
      Contingent liabilitiesLegal proceedings and tax issues covering a range of matters
        are pending in various jurisdictions against us. Due to the uncertainty
        inherent in such matters, it is often difficult to predict the final outcome.
        The cases and claims against us often raise difficult and complex factual
        and legal issues which are subject to many uncertainties and complexities,
        including but not limited to the facts and circumstances of each particular
        case and claim, the jurisdiction and the differences in applicable law.
        In the normal course of business, we consult with legal counsel and certain
        other experts on matters related to litigation and taxes.
      We accrue a liability when it is determined that an adverse
        outcome is probable and the amount of the loss can be reasonably estimated.
        In the event an adverse outcome is possible or an estimate is not determinable,
        the matter is disclosed.
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FINANCIAL RISK MANAGEMENTOur activities expose us to a variety of financial risks, such
    as market risks (including foreign currency exchange risk, interest rate risk
    and commodity price risk), credit risk and liquidity risk. All of these risks
    arise in the normal course of business. In order to manage the risk arising
    from these exposures, we utilise a variety of foreign exchange, interest rate
    and commodity forward contracts, options and swaps to hedge certain exposures. The following analyses provide quantitative information regarding
  our exposure to the financial risks described above. There are certain limitations
  inherent in the analyses presented, primarily due to the assumption that rates
  change in a parallel fashion and instantaneously. In addition, the analyses
  are unable to reflect the complex market reactions that normally would arise
  from the market shifts assumed. We use derivative financial instruments solely for the purpose
  of hedging exposures. We enter into contracts related to derivative financial
  instruments for periods commensurate with our underlying exposures and do not
  take positions independent of these exposures. None of these financial instruments
  are leveraged or used for trading purposes or to take speculative positions. Foreign currency exchange riskWe operate on an international basis generating foreign currency
    exchange risks arising from future commercial transactions, recognised assets
    and liabilities, investments and divestments in foreign currencies other than
    the euro, our functional and reporting currency. Our treasury department matches
    and manages the intragroup and external financial exposures. Although we generally
    enter into hedging arrangements and other contracts in order to reduce our
    exposure to currency fluctuations, these measures may be inadequate or may
    subject us to increased operating or financing costs. The main four currencies of our external hedges are the British
  pound, US dollar, Chinese yuan and Australian dollar. Significant acquisitions
  are usually funded in the currency of the underlying assets. The main 2006 exchange rates are shown below: Year end closing1
      
      Annual average 2British pound
      0.6715
      
      0.6805US dollar
      1.3170
      
      1.2654Chinese yuan
      10.2793
      
      10.0676Australian dollar
      1.6691
      
      1.67051
      Source: European Central Bank, reference rate
        on the last day of the year.2
      The annual average is calculated as the 12-months
        average of the month-end closing rates of the European Central Bank The potential loss in fair value on our foreign currency hedging
  instruments from an adverse 10% change in quoted foreign currency exchange rates
  would have been approximately €3 million, €54 million and €69
  million for 2006, 2005 and 2004 respectively.




Commodity riskWe lease and own a fleet of vehicles and aircrafts to facilitate
    domestic and international delivery of mail, parcel and logistics activities.
    We are exposed to the risk of an increase in the prices of refined fuels,
    principally jet and diesel gasoline, which is used in the transportation of
    the goods we carry. We may enter into derivative financial instruments to
    hedge our expected consumption. Although we are of the opinion that a majority of the increases
  in price risks can be passed on to our customers, we may use a combination of
  options, swaps and futures contracts to provide some protection against rising
  fuel and energy prices. At 31 December 2006, we had no outstanding fuel contracts but
  we may enter into such contracts in the future. Credit riskCredit risk represents the loss that we would incur if counterparties
    with whom we enter into financial transactions are unable to fulfil the terms
    of the agreements. We attempt to minimise our credit risk exposure by only
    transacting to financial institutions that meet established credit guidelines.
    We continually monitor the credit standing of financial counterparties and
    reassess such exposures. Liquidity riskPrudent liquidity risk management implies maintaining sufficient
    cash and marketable securities, the availability of funding through an adequate
    amount of committed credit facilities and the ability to close out market
    positions. Due to the dynamic nature of the underlying businesses, we attempt
    to maintain flexibility in funding by keeping committed credit lines available.
    A downgrade in our credit rating may negatively affect our ability to obtain
    funds from financial institutions and banks and increase our financing costs
    by increasing the interest rates of our outstanding debt or the interest rates
    at which we are able to refinance existing debt or incur new debt. Furthermore,
    other non TNT specific adverse market conditions could also turn out to have
    a material adverse effect on our results and financial condition. Interest rate riskPart of our borrowings and leases are against floating interest
    rates. These floating interest rates may fluctuate substantially and could
    have a material adverse effect on our results and financial condition in any
    given reporting period. Although we generally enter into hedging arrangements and other
    contracts in order to attempt to reduce our exposure to interest rate fluctuations,
    these measures may be inadequate or may subject us to increased operating
    or financing costs. Our debt instruments, including debt associated with capital
    leases that bear interest at fixed rates of interest are exposed to fluctuations
    in fair value resulting from changes in market interest rates. The potential
    positive fair value effect from a hypothetical 10% increase from current market
    interest rates would have been approximately €32 million, €15 million
    and€11 million for 2006, 2005 and 2004, respectively.
    This analysis assumes a parallel shift in each currencys yield curve
    of interest rates.


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NOTES TO THE CONSOLIDATED BALANCE
  SHEETS

£1INTANGIBLE ASSETS: 1,785 MILLION (2005: 1,838)

|STATEMENT OF CHANGES IN INTANGIBLE ASSETS |          |  |           |  |                   |  |        |  
|----------------------------------------- | -------- |  | --------- |  | ----------------- |  | ------ | -
|                                          | Goodwill |  | Software  |  | Other intangibles |  | Total  |  
|                                          |          |  |           |  |                   |  |        |  
|Amortisation percentage                   |          |  | 10% - 35% |  | 0% - 35%          |  |        |  
|                                          |          |  |           |  |                   |  |        |  
|Historical cost                           | 3,280    |  | 282       |  | 120               |  | 3,682  |  
|                                          |          |  |           |  |                   |  |        |  
|Accumulated amortisation and impairments  | (855)    |  | (173)     |  | (11)              |  | (1,039 | )
|                                          |          |  |           |  |                   |  |        |  
|Balance at 31 December 2004               | 2,425    |  | 109       |  | 109               |  | 2,643  |  
|                                          |          |  |           |  |                   |  |        |  
|CHANGES IN 2005                           |          |  |           |  |                   |  |        |  
|                                          |          |  |           |  |                   |  |        |  
|Additions                                 | 26       |  | 63        |  | 17                |  | 106    |  
|                                          |          |  |           |  |                   |  |        |  
|Disposals                                 | (5)      |  | (1)       |  |                   |  | (6     | )
|                                          |          |  |           |  |                   |  |        |  
|(De)consolidation                         |          |  | (1)       |  | 5                 |  | 4      |  
|                                          |          |  |           |  |                   |  |        |  
|Transfers to assets held for sale         | (812)    |  | (12)      |  | (10)              |  | (834   | )
|                                          |          |  |           |  |                   |  |        |  
|Internal transfers/reclassifications      |          |  | 18        |  | (18)              |  |        |  
|                                          |          |  |           |  |                   |  |        |  
|Amortisation and impairments              |          |  | (49)      |  | (16)              |  | (65    | )
|                                          |          |  |           |  |                   |  |        |  
|Exchange rate differences                 | (8)      |  | 1         |  | (3)               |  | (10    | )
|                                          |          |  |           |  |                   |  |        |  
|Total changes                             | (799)    |  | 19        |  | (25)              |  | (805   | )
|                                          |          |  |           |  |                   |  |        |  
|Historical cost                           | 2,139    |  | 335       |  | 103               |  | 2,577  |  
|                                          |          |  |           |  |                   |  |        |  
|Accumulated amortisation and impairments  | (513)    |  | (207)     |  | (19)              |  | (739   | )
|                                          |          |  |           |  |                   |  |        |  
|Balance at 31 December 2005               | 1,626    |  | 128       |  | 84                |  | 1,838  |  
|                                          |          |  |           |  |                   |  |        |  
|CHANGES IN 2006                           |          |  |           |  |                   |  |        |  
|                                          |          |  |           |  |                   |  |        |  
|Additions                                 | 99       |  | 83        |  | 20                |  | 202    |  
|                                          |          |  |           |  |                   |  |        |  
|Disposals                                 | (9)      |  | (1)       |  |                   |  | (10    | )
|                                          |          |  |           |  |                   |  |        |  
|(De)consolidation                         |          |  |           |  | 31                |  | 31     |  
|                                          |          |  |           |  |                   |  |        |  
|Transfers to assets held for sale         | (144)    |  | (3)       |  | (68)              |  | (215   | )
|                                          |          |  |           |  |                   |  |        |  
|Internal transfers/reclassifications      |          |  | 11        |  | (11)              |  |        |  
|                                          |          |  |           |  |                   |  |        |  
|Amortisation and impairments              | (1)      |  | (57)      |  | (5)               |  | (63    | )
|                                          |          |  |           |  |                   |  |        |  
|Exchange rate differences                 | 2        |  |           |  |                   |  | 2      |  
|                                          |          |  |           |  |                   |  |        |  
|Total changes                             | (53)     |  | 33        |  | (33)              |  | (53    | )
|                                          |          |  |           |  |                   |  |        |  
|Historical cost                           | 2,086    |  | 402       |  | 58                |  | 2,546  |  
|                                          |          |  |           |  |                   |  |        |  
|Accumulated amortisation and impairments  | (513)    |  | (241)     |  | (7)               |  | (761   | )
|                                          |          |  |           |  |                   |  |        |  
|Balance at 31 December 2006               | 1,573    |  | 161       |  | 51                |  | 1,785  |  
|                                          |          |  |           |  |                   |  |        |  
|(in € millions, except percentages)       |          |  |           |  |                   |  |        |  

Intangible assets as at 31 December 2006 of €211 million
  related to our discontinued freight management business are included in assets
  held for sale. €215 million included in the table above as transferred
  to assets held for sale represents the balance as at 1 January 2006 and does
  not reflect the movements (mainly related to foreign exchange effects) during
  2006. Intangible assets as at 31 December 2005 of €895 million related
  to our discontinued logistics business are included in assets held for sale.
  €834 million included in the table above as transferred to assets held
  for sale represents the balance as at 1 January 2005 and does not reflect the
  movements (mainly related to foreign exchange effects) during 2005. Goodwill is not amortised but is subject to annual impairment
  review. For our impairment review purposes, all goodwill, includinggoodwill generated from the acquisition of TNT and GD




Express Worldwide, is allocated to the applicable cash generating
    units (CGUs), based on the revenue as at the date of acquisition. Of the total
    goodwill balance of €1,573 million, we have allocated €1,248 million
    to our Express Europe CGU,€ 197 million to
    our combined CGU European Mail Networks,€95 million
    to our other express CGUs and €33 million to our other mail CGUs. The
    recoverable amount of a CGU is determined based on value in use calculations
    by using the discounted cash flow model. These calculations use cash flow
    projections based on financial budgets approved by management covering a period
    of 9 years (express) or 10 years (mail). TNTs management has demonstrated
    that its cash flow projections have been reliable in the past. The value beyond
    the explicit forecast period is calculated assuming a constant cashflow as
    from the final year (0% growth). We determined the budgeted gross margin based on past performance
    and its expectations for market development. The weighted average growth rates
    used are consistent with


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|119 | FINANCIAL STATEMENTS | | | CHAPTER 12
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|the forecasts included in industry reports. The discount
        rates used in the CGU valuations vary from 7.0% to 8.0% (pre-tax) to reflect
        specific risks relating to the relevant segments.
      Software balance includes internally generated software
        with a book value of €121 million at 31 December 2006 (2005: 103).
        Other intangible assets relate to customer lists of €35 million (2005:
        75) and software under construction of €16 million(2005:
        8). Of the additions in software, €54 million related to |  | selfproduced software and €29 million related to
        purchased software.
      The estimated amortisation expenses for software and
        other intangibles for the subsequent five years are 2007: €18 million,
        2008: €27 million, 2009: €17 million, 2010: €11 million,
        2011:€8 million and after 2011: €131
        million. We do not conduct fundamental research and development. Therefore
        we do not incur fundamental research and development costs.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

£2PROPERTY, PLANT AND EQUIPMENT: 1,678 MILLION (2005: 1,552)

|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|------------------------------------------------------------- |  | ------------------ | - | ------------------- | - | -------- | - | -------- | - | ------------------------ | - | ------ | -
|STATEMENT OF CHANGES IN PROPERTY, PLANT
        AND EQUIPMENT |  | Land and buildings |   | Plant and equipment |   | Aircraft |   | Other    |   | Construction in progress |   | Total  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Depreciation percentage                                       |  | 0% - 10%           |   | 4% - 33%            |   | 4% - 10% |   | 7% - 25% |   | 0%                       |   |        |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Historical cost                                               |  | 1,524              |   | 1,239               |   | 372      |   | 706      |   | 47                       |   | 3,888  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Accumulated depreciation and impairments                      |  | (564               | ) | (775                | ) | (128     | ) | (497     | ) |                          |   | (1,964 | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Balance at 31 December 2004                                   |  | 960                |   | 464                 |   | 244      |   | 209      |   | 47                       |   | 1,924  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|CHANGES IN 2005                                               |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Capital expenditure                                           |  | 24                 |   | 52                  |   |          |   | 70       |   | 87                       |   | 233    |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Acquisitions                                                  |  |                    |   | 1                   |   |          |   | 4        |   |                          |   | 5      |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Disposals                                                     |  | (2                 | ) | (6                  | ) | (1       | ) | (8       | ) |                          |   | (17    | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Exchange rate differences                                     |  | 9                  |   | 3                   |   | 3        |   | 5        |   |                          |   | 20     |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Net additions/disposals                                       |  | 31                 |   | 50                  |   | 2        |   | 71       |   | 87                       |   | 241    |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Depreciation and impairments                                  |  | (61                | ) | (90                 | ) | (25      | ) | (79      | ) |                          |   | (255   | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Transfers to assets held for sale                             |  | (161               | ) | (148                | ) |          |   | (48      | ) | (1                       | ) | (358   | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Transfers and reclassifications                               |  | 36                 |   | 37                  |   |          |   | 16       |   | (89                      | ) |        |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Total changes                                                 |  | (155               | ) | (151                | ) | (23      | ) | (40      | ) | (3                       | ) | (372   | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Historical cost                                               |  | 1,360              |   | 933                 |   | 375      |   | 584      |   | 44                       |   | 3,296  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Accumulated depreciation and impairments                      |  | (555               | ) | (620                | ) | (154     | ) | (415     | ) |                          |   | (1,744 | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Balance at 31 December 2005                                   |  | 805                |   | 313                 |   | 221      |   | 169      |   | 44                       |   | 1,552  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|CHANGES IN 2006                                               |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Capital expenditure                                           |  | 43                 |   | 75                  |   | 111      |   | 70       |   | 118                      |   | 417    |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Acquisitions                                                  |  | 2                  |   | 4                   |   |          |   | 2        |   |                          |   | 8      |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Disposals                                                     |  | (12                | ) | (6                  | ) | (3       | ) | (6       | ) |                          |   | (27    | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Exchange rate differences                                     |  | 3                  |   | (1                  | ) | 2        |   |          |   |                          |   | 4      |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Net additions/disposals                                       |  | 36                 |   | 72                  |   | 110      |   | 66       |   | 118                      |   | 402    |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Depreciation and impairments                                  |  | (59                | ) | (92                 | ) | (25      | ) | (79      | ) |                          |   | (255   | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Transfers to assets held for sale                             |  | (13                | ) |                     |   |          |   | (8       | ) |                          |   | (21    | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Transfers and reclassifications                               |  | 54                 |   | 49                  |   |          |   | 14       |   | (117                     | ) |        |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Total changes                                                 |  | 18                 |   | 29                  |   | 85       |   | (7       | ) | 1                        |   | 126    |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Historical cost                                               |  | 1,385              |   | 877                 |   | 477      |   | 500      |   | 45                       |   | 3,284  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Accumulated depreciation and impairments                      |  | (562               | ) | (535                | ) | (171     | ) | (338     | ) |                          |   | (1,606 | )
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|Balance at 31 December 2006                                   |  | 823                |   | 342                 |   | 306      |   | 162      |   | 45                       |   | 1,678  |  
|                                                              |  |                    |   |                     |   |          |   |          |   |                          |   |        |  
|(in € millions, except percentages)                           |  |                    |   |                     |   |          |   |          |   |                          |   |        |  

|Property, plant and equipment as at 31 December
      2006 of €25 million related to our discontinued freight management
      business and our other assets held for sale is included in assets held for
      sale. €21 million included in the table above as transferred to assets
      held for sale represents the balance as at 1 January 2006 and does not reflect
      the movements during 2006. Property, plant and equipment as at 31 December
      2005 of €345 million related to our discontinued logistics business |  | and our other assets held for sale is included in assets
        held for sale. €358 million included in the table above as transferred
        to assets held for sale represents the balance as at 1 January 2005 and
        does not reflect the movements during 2005.
      Historical cost refers to, amongst others, the then current
        value of the property, plant and equipment contributed by the former parent
        Royal PTT Nederland N.V. to our company
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|2006 ANNUAL REPORT AND FORM 20-F
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 120
|          

|upon incorporation on 1 January 1989. The calculation
        of the depreciation expense on these assets takes into account the useful
        life that had already elapsed at that date. The book value at 31 December
        2006 of these assets contributed to our company on 1 January 1989 is €74
        million (2005: 100), net of accumulated depreciation of €176 million
        (2005: 221).
      Aircraft and (spare) engines are depreciated on a straight-line
        basis over the shorter of the assets useful life and the lease |  | term to estimated residual values of 20%. Depending on
        the type of aircraft, the depreciation term varies from 10 to 25 years.
        Spare parts are depreciated to their estimated residual value on a straight
        line basis over the remaining estimated useful life of the associated
        aircraft or engine type. All 44 aircrafts (2005: 43) are operated by the
        express business.
      Finance leases included in the property, plant and equipment
        balance as at 31 December 2006 are:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    |  |                    |  |                     |  |          |  |       |  |            |  |            | 
|------------------- |  | ------------------ |  | ------------------- |  | -------- |  | ----- |  | ---------- |  | ---------- | 
|                    |  | Land and buildings |  | Plant and equipment |  | Aircraft |  | Other |  | Total 2006 |  | Total 2005 | 
|                    |  |                    |  |                     |  |          |  |       |  |            |  |            | 
|Under finance lease |  | 26                 |  | 15                  |  | 110      |  | 40    |  | 191        |  | 84         | 
|                    |  |                    |  |                     |  |          |  |       |  |            |  |            | 
|Express             |  | 16                 |  | 15                  |  | 110      |  | 4     |  | 145        |  | 10         | 
|                    |  |                    |  |                     |  |          |  |       |  |            |  |            | 
|Mail                |  | 10                 |  |                     |  |          |  | 36    |  | 46         |  | 74         | 
|                    |  |                    |  |                     |  |          |  |       |  |            |  |            | 
|(in € millions)     |  |                    |  |                     |  |          |  |       |  |            |  |            | 

|Included in land and buildings under financial lease are
        lease hold rights and ground rent. The book value of the lease hold rights
        and ground rent in mail is €10 million, comprising a historical cost
        of €16 million with accumulated depreciation of€6
        million. The book value of the lease hold rights and ground rent in express
        is €16 million, comprising a historical cost of€19
        million with accumulated depreciation of €3 million.
      Lease hold and ground rents expiring within 1 year amount
        to €1 million, lease hold and ground rents between 1 and 5 years
        amount to €3 million, lease hold and ground rents between 5 and 20
        years amount to €16 million and lease hold and ground rents between
        20 and 40 years amount to €2 million. Lease hold and ground rents
        contracts with indefinite terms amount to €4 million.Lease hold rights and ground rent for land and buildings
        are mainly in Belgium for €10 million, in the Netherlands for €10
        million and in France for €6 million.
      The finance leases relating to Express increased. On
        6 December 2006 we entered into a 10-year finance lease agreement pertaining
        to the acquisition of a Boeing 747-400 ERF. The total capitalised value
        of the aircraft was €110 million based upon the present value of
        the minimum lease payments and guaranteed residual value included as part
        of the transaction. The lease requires semi-annual lease payments of a
        base amount of €4.8 million adjusted by an interest matrix that is
        linked to our credit rating at the time of each semi-annual payment. The
        lease agreement and related documents do not include an option for us
        to purchase the aircraft.
      Land and buildings of €34 million (2005: 33) are
        pledged as security to third parties, by express in Germany.
      We do not hold freehold office buildings for long term
        investments and for long term rental income purposes. The rental income
        is based upon incidental rental contracts with third parties for buildings
        which are temporarily not in use by TNT or based upon contracts which
        are supportive to the primary business activities of our company.
      There are no material temporarily idle property, plant
        and equipment at 31 December 2006 (2005: 0). The historical cost of fully
        depreciated property, plant and equipment that is still in |  | use is €353 million (2005: 322) of which €175
        million (2005: 150) is related to plant and equipment, €49 million
        (2005: 42) is related to land and buildings and €129 million is related
        to other (2005: 130).
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|--- | -------------------- | - | ----------
|121 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

£3FINANCIAL FIXED ASSETS: 314 MILLION (2005: 273)

|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|---------------------------------------------- |  | ------------------------- | - | ---------------------- | - | ------------------- | - | ------------------------------ | - | ------------------------------------ | - | ---- | -
|STATEMENT OF CHANGES IN FINANCIAL FIXED ASSETS |  | Investments in associates |   | Other loans receivable |   | Deferred tax assets |   | Prepayments and accrued income |   | Total                                |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|                                               |  |                           |   |                        |   |                     |   | Financial assets at fair value |   | Other prepayments and accrued income |   |      |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Balance at 31 December 2004                    |  | 84                        |   | 21                     |   | 253                 |   | 5                              |   | 140                                  |   | 503  |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Adoption of IAS 32/39                          |  |                           |   |                        |   |                     |   |                                |   | (3                                   | ) | (3   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Balance at 1 January 2005                      |  | 84                        |   | 21                     |   | 253                 |   | 5                              |   | 137                                  |   | 500  |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|CHANGES IN 2005                                |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Acquisitions/additions                         |  | 13                        |   | 3                      |   | 38                  |   |                                |   | 2                                    |   | 56   |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Disposals/decreases                            |  | (7                        | ) |                        |   | (61                 | ) |                                |   |                                      |   | (68  | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Transfers to assets held for sale              |  | (40                       | ) | (5                     | ) | (46                 | ) | (3                             | ) | (107                                 | ) | (201 | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|(De)consolidation                              |  |                           |   |                        |   | 1                   |   |                                |   | (4                                   | ) | (3   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Withdrawals/repayments                         |  | (1                        | ) | (6                     | ) |                     |   | (1                             | ) | (6                                   | ) | (14  | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Exchange rate differences                      |  |                           |   |                        |   | 3                   |   |                                |   | 1                                    |   | 4    |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Other changes                                  |  | (2                        | ) |                        |   |                     |   |                                |   | 1                                    |   | (1   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Total changes                                  |  | (37                       | ) | (8                     | ) | (65                 | ) | (4                             | ) | (113                                 | ) | (227 | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Balance at 31 December 2005                    |  | 47                        |   | 13                     |   | 188                 |   | 1                              |   | 24                                   |   | 273  |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|CHANGES IN 2006                                |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Acquisitions/additions                         |  | 20                        |   | 1                      |   | 51                  |   | 16                             |   | 1                                    |   | 89   |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Disposals/decreases                            |  |                           |   |                        |   | (26                 | ) |                                |   |                                      |   | (26  | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Transfers to assets held for sale              |  | (3                        | ) |                        |   | (3                  | ) |                                |   | (1                                   | ) | (7   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|(De)consolidation                              |  |                           |   |                        |   | 2                   |   |                                |   | 1                                    |   | 3    |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Withdrawals/repayments                         |  |                           |   | (7                     | ) |                     |   |                                |   | (4                                   | ) | (11  | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Exchange rate differences                      |  |                           |   |                        |   | (1                  | ) |                                |   |                                      |   | (1   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Other changes                                  |  | (6                        | ) |                        |   |                     |   |                                |   |                                      |   | (6   | )
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Total changes                                  |  | 11                        |   | (6                     | ) | 23                  |   | 16                             |   | (3                                   | ) | 41   |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|Balance at 31 December 2006                    |  | 58                        |   | 7                      |   | 211                 |   | 17                             |   | 21                                   |   | 314  |  
|                                               |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  
|(in € millions)                                |  |                           |   |                        |   |                     |   |                                |   |                                      |   |      |  

|Financial fixed assets as at 31 December 2006 of €9
        million related to our discontinued freight management business is included
        in assets held for sale. €7 million included in the table above as
        transferred to assets held for sale represents the balance as at 1 January
        2006 and does not reflect the movements during 2006.Financial fixed assets as at 31 December 2005 of €160
        million related to our discontinued logistics business is included in
        assets held for sale. €201 million included in the table above as
        transferred to assets held for sale represents the balance as at 1 January
        2005 and does not reflect the movements during 2005.
      DEFERRED TAX ASSETSDeferred tax assets are further explained in
        note 23.
      FINANCIAL ASSETS AT FAIR VALUEFinancial assets at fair value include our 5%
        equity stake in Louis Topco Limited for an amount of €15.5 million,
        which we obtained as part of the sale of our logistics division as at
        4 November 2006. We also refer to note 8.
      Also included is the fair value of a USD 139 million
        Interest Rate Swap of €1 million. For further disclosure on this
        swap, see note 13. |  | Financial assets at fair value include the fair value
        of put and call options. As agreed on 15 July 2004, on 14 October 2004,
        our subsidiary Royal TNT Post B.V. and Essent N.V. established a company
        named Cendris BSC Customer Contact B.V. in which the ordinary share capital,
        carrying equal voting rights, is split 51% and 49% respectively. Cendris
        BSC Customer Contact B.V. provides call centre activities to TNT, Essent
        N.V. and third parties. The terms and conditions of the shareholders agreement
        provide Royal TNT Post B.V. with the option to call, as of 14 October
        2007, on the shares of Essent N.V. and for Essent N.V. to put, as of 14
        October 2007, its shares to Royal TNT Post B.V. where the price is determined
        by the fair market value of the shares. As the call option is based on
        the fair market value of the shares, the fair market value of the call
        option is zero.
      OTHER PREPAYMENTS AND ACCRUED INCOMEThe opening balance sheet adjustment in 2005
        for adoption of IAS 32/39 relates to the changed accounting policy for
        the 5.125% Eurobond 2008 of which €3 million relates to the issuing
        costs still to be amortised. These capitalised costs are included in the
        valuation at amortised cost and stated as part of the book value of the
        5.125% Eurobond 2008.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 122
|          

|INVESTMENTS IN ASSOCIATESThe goodwill balance included in investments
        in associates at 31 December 2006 is nil (2005: 1). The result from investments
        in associates at 31 December 2006 amounts to €-6 million (2005:-2)
        and is included in Other changes. |  | Our investment in Logispring Investment Fund
      Holding B.V. is our most significant investment in an associate. We account
      for this investment using the equity method.Key information regarding this investment (on a stand alone
      basis) is as follows and includes balances at 100%:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          |  | Year ended at 31 December |  
|----------------------------------------- |  | ------------------------- | -
|                                          |  |                           |  
|                                          |  | 2006                      |  
|                                          |  |                           |  
|Non-current assets                        |  | 52                        |  
|                                          |  |                           |  
|Current assets                            |  | 0                         |  
|                                          |  |                           |  
|                                          |  |                           |  
|                                          |  |                           |  
|Equity                                    |  | 52                        |  
|                                          |  |                           |  
|Non-current liabilities                   |  | 0                         |  
|                                          |  |                           |  
|Current liabilities                       |  | 0                         |  
|                                          |  |                           |  
|                                          |  |                           |  
|                                          |  |                           |  
|Net sales                                 |  | 0                         |  
|                                          |  |                           |  
|Operating income                          |  | 0                         |  
|                                          |  |                           |  
|Profit attributable to the shareholders   |  | (5                        | )
|                                          |  |                           |  
|                                          |  |                           |  
|                                          |  |                           |  
|Net cash from operating activities        |  | 0                         |  
|                                          |  |                           |  
|Net cash used in investing activities     |  | (16                       | )
|                                          |  |                           |  
|Net cash used in financing activities     |  | 16                        |  
|                                          |  |                           |  
|Change in cash from continuing operations |  | 0                         |  
|                                          |  |                           |  
|(in € millions)                           |  |                           |  

£4INVENTORY: 29 MILLION (2005: 29) At 31 December2006
      
      
      2005Raw materials and supplies
      
      9
      
      
      9Finished goods
      
      20
      
      
      20Total
      
      29
      
      
      29(in € millions) Total inventory of €29 million (2005: 29) is valued at
  historical cost for an amount of €35 million (2005: 33) and is stated net
  of provisions for obsolete items amounting to €6 million (2005: 4). There
  are no inventories carried at net realisable value (2005: 0) and no inventories
  are pledged as security for liabilities as at 31 December 2006. The balance
  of inventories that is expected to be recovered after 12 months is €1 million
  (2005: 0). No inventory as at 31 December 2006 relating to our discontinued
  freight management business is included in assets held for sale. Inventory as
  at 31 December 2005 of €22 million related to our discontinued logistics
  business is included in assets held for sale.




£5ACCOUNTS RECEIVABLE: 1,561 MILLION (2005: 1,471) At 31 December2006
      
      2005Trade accounts receivable - total
      
      1,380
      
      1,351Provision for impairment
      
      (61
      )
      (58
      )Trade accounts receivable - net
      
      1,319
      
      1,293Vat receivable
      
      27
      
      20Accounts receivable from associates
      
      
      
      2Other
      
      215
      
      156Total
      
      1,561
      
      1,471(in € millions) The fair value of the accounts receivable approximates its
  carrying value. We have not recognised any material loss for the impairment
  of trade accounts receivable during the year ended 31 December 2006 and 31 December
  2005. Other accounts receivables mainly include receivables from insurance companies,
  deposits and various other items. The balance of accounts receivable that is
  expected to be recovered after 12 months is €1 million (2005: 3). Accounts receivable as at 31 December 2006 of €112 million
    related to our discontinued freight management business is included in assets
    held for sale. Accounts receivable as at 31 December 2005 of €695 million
    related to our discontinued logistics business is included in assets held
    for sale.




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|123 | FINANCIAL STATEMENTS | | | CHAPTER 12
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£6PREPAYMENTS AND ACCRUED INCOME: 227 MILLION (2005: 218) Prepayments and accrued income include amounts paid in advance
  to cover costs that will be charged against income in future years and net revenues
  not yet invoiced. At 31 December 2006, prepayments amounted to €70 million
  (2005: 73). There is no balance that is expected to be recovered after 12 months
  (2005: 2). Prepayments and accrued income also includes all outstanding
  short term foreign exchange forward contracts at fair value for an amount of
  €3 million (2005: 6). The fair value has been calculated at the relevant
  market (forward) rates at 31 December 2006. The notional principal amount of
  the outstanding foreign exchange forward contracts at 31 December 2006 is €282
  million (2005: 482). Prepayments and accrued income as at 31 December 2006 of€23 million related to our discontinued freight
    management business is included in assets held for sale. Prepayments and accrued
    income as at 31 December 2005 of €157 million related to our discontinued
    logistics business is included in assets held for sale.  £7CASH AND CASH EQUIVALENTS: 297 MILLION (2005: 559) Cash and cash equivalents comprise cash at bank and in hand
    of€234 million (2005: 325). Short term bank deposits
    are €63 million (2005: 234). The effective interest rate during 2006
    on short term bank deposits was 3% and the average outstanding amount was
    €78 million with an average maturity of 1.7 days. Included in cash and
    cash equivalents is €74 million (2005: 140) of restricted cash. The fair
    value of cash and cash equivalents approximates the carrying value. Cash and cash equivalents as at 31 December 2006 of €29
    million related to our discontinued freight management business are included
    in assets held for sale. Cash and cash equivalents as at 31 December 2005
    of €104 million related to our discontinued logistics business are included
    in assets held for sale.  £8ASSETS HELD FOR SALE: 409 MILLION (2005: 2,378) LIABILITIES RELATED
  TO ASSETS CLASSIFIED AS HELD FOR SALE: 146 MILLION (2005: 1,230) On 6 December 2005 we announced a strategy to focus on our
  core competency of providing delivery services by expertly managing delivery
  networks and our intention of selling the logistics business. On 23 August 2006
  we announced that we have signed a Sale and Purchase Agreement on the sale of
  the logistics business. On 4 November 2006 we completed the sale of the logistics
  division to affiliates of Apollo Management L.P.




The logistics division was shown as an asset held for sale
  as at 31 December 2005. On 30 October 2006 we announced, as part of the strategy to
  focus on our core competency, the decision to divest our freight management
  business. On 16 November 2006 we signed a Sale and Purchase Agreement to sell
  our freight management business to French logistics service provider Geodis
  SA. On 5 February 2007 we completed the sale. The freight management business
  is shown as an asset held for sale as at 31 December 2006. The combined assets and liabilities as held for sale for 2005
  and 2006 are specified below: At 31 DecemberBALANCE SHEETS
      
      2006
      
      2005Intangible assets
      
      211
      
      895Property, plant and equipment
      
      25
      
      345Financial fixed assets
      
      9
      
      160Current assets
      
      164
      
      978Total assets
      
      409
      
      2,378Deferred tax liabilities
      
      6
      
      30Provisions for pension liabilities
      
      4
      
      107Other non-current liabilities
      
      2
      
      133Current liabilities
      
      134
      
      960Total liabilities
      
      146
      
      1,230(in € millions) The assets and liabilities as at 31 December 2006 relates to
    the decision taken to divest our freight management business. The assets and
    liabilities held for sale as at 31 December 2005 largely relates to our logistics
    business.All inter-company balances as at 31 December 2006 and 31 December
    2005 between our discontinued business and our continuing business have been
    eliminated. As at 31 December 2006, assets of €409 million include
    €11 million of assets held for sale in the mail segments and €6
    million in the express segment are not related to our discontinued freight
    management business. The difference between the remaining assets of €392
    million and liabilities of€146 million consists
    of a combination of equity and financing from TNT.As at 31 December 2005, assets of €2,378 million include
    €12 million of assets held for sale in the express and mail segments
    and are not related to our discontinued logistics business. The difference
    between the remaining assets of €2,366 million and liabilities of €1,230
    million consists of a combination of equity and financing from TNT. As at 31 December 2006 the total guarantees for our discontinued
  freight management business amounted to €32 million, of which €12
  million related to corporate guarantees and €20 million to bank guarantees.
  All the guarantees of the discontinued business were financial guarantees.




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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 124
|          

|The combined statements of income of our discontinued
      operations for the last three years are shown below: |  | 
|---------------------------------------------------------------------------------------------------------------- |  | 

|                                                                                    |  | Year ended at 31 December |  
|----------------------------------------------------------------------------------- |  | ------------------------- | -
|                                                                                    |  |                           |  
|                                                                                    |  | 2006                      |  
|                                                                                    |  |                           |  
|Net sales                                                                           |  | 3,769                     |  
|                                                                                    |  |                           |  
|Other operating revenues                                                            |  | 8                         |  
|                                                                                    |  |                           |  
|Total revenues                                                                      |  | 3,777                     |  
|                                                                                    |  |                           |  
|Other income                                                                        |  | (24                       | )
|                                                                                    |  |                           |  
|Total operating expenses                                                            |  | (3,698                    | )
|                                                                                    |  |                           |  
|Operating income                                                                    |  | 55                        |  
|                                                                                    |  |                           |  
|Net financial (expense)/income                                                      |  | (63                       | )
|                                                                                    |  |                           |  
|Results from investments in associates                                              |  | (45                       | )
|                                                                                    |  |                           |  
|Profit/(loss) before taxes                                                          |  | (53                       | )
|                                                                                    |  |                           |  
|Income taxes                                                                        |  | (17                       | )
|                                                                                    |  |                           |  
|Profit/(loss) for the year                                                          |  | (70                       | )
|                                                                                    |  |                           |  
|Post-tax result disposal assets held for sale                                       |  | (87                       | )
|                                                                                    |  |                           |  
|Profit attributable to minority interests                                           |  |                           |  
|                                                                                    |  |                           |  
|Profit/(loss) from discontinued operations                                          |  | (157                      | )
|                                                                                    |  |                           |  
|Earnings from discontinued operations per ordinary share
      (in € cents)         |  | (37.3                     | )
|                                                                                    |  |                           |  
|Earnings from discontinued operations per diluted ordinary
      share (in € cents) |  | (37.0                     | )
|                                                                                    |  |                           |  
|(in € millions, except per share data)                                              |  |                           |  

|Inter-company revenues and related expenses of €55
        million have not been eliminated in our statements of income related to
        our discontinued business. Net interest expense of €52 million (2005:
        53; 2004: 49) related to debt, as part of our cash management strategy,
        that can be allocated to our discontinued business has been included in
        the statements of income. The |  | statements of income also include costs related to shared
        services of €18 million (2005: 23; 2004: 14) directly attributable
        to our discontinued business.
      The combined cash flows relating to our discontinued
        operations are as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            |  | Year ended at 31 December |  
|------------------------------------------- |  | ------------------------- | -
|                                            |  |                           |  
|                                            |  | 2006                      |  
|                                            |  |                           |  
|Net cash from operating activities          |  | (63                       | )
|                                            |  |                           |  
|Net cash used in investing activities       |  | (30                       | )
|                                            |  |                           |  
|Net cash used in financing activities       |  | 36                        |  
|                                            |  |                           |  
|Change in cash from discontinued operations |  | (57                       | )
|                                            |  |                           |  
|                                            |  |                           |  
|                                            |  |                           |  
|Cash at the beginning of the year           |  | 136                       |  
|                                            |  |                           |  
|Exchange rate differences                   |  | (2                        | )
|                                            |  |                           |  
|Change in cash from discontinued operations |  | (57                       | )
|                                            |  |                           |  
|Cash divested with sale Logistics business  |  | (48                       | )
|                                            |  |                           |  
|Cash at the end of the year                 |  | 29                        |  
|                                            |  |                           |  
|(in € millions)                             |  |                           |  

|Hereafter the separate statements of income and cash flow
        statements for the logistics business are shown.It should be noted that the 2006 figures for the logistics
        business are as of and through 4 November 2006 and are therefore not fully
        comparable to 2005 and 2004. |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 



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|125 | FINANCIAL STATEMENTS | | | CHAPTER 12
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|                                              |                           |   |        |  
|--------------------------------------------- | ------------------------- | - | ------ | -
|                                              | Year ended at 31 December |  
|                                              |                           |   |        |  
|STATEMENT OF INCOME LOGISTICS DIVISION        | 2006                      |   | 2005   |  
|                                              |                           |   |        |  
|Net sales                                     | 2,925                     |   | 3,542  |  
|                                              |                           |   |        |  
|Other operating revenues                      | 8                         |   | 14     |  
|                                              |                           |   |        |  
|Total revenues                                | 2,933                     |   | 3,556  |  
|                                              |                           |   |        |  
|Other income                                  | (24                       | ) | (98    | )
|                                              |                           |   |        |  
|Total operating expenses                      | (2,866                    | ) | (3,475 | )
|                                              |                           |   |        |  
|Operating income                              | 43                        |   | (17    | )
|                                              |                           |   |        |  
|Net financial (expense)/income                | (54                       | ) | (63    | )
|                                              |                           |   |        |  
|Results from investments in associates        | (45                       | ) |        |  
|                                              |                           |   |        |  
|Profit/(loss) before taxes                    | (56                       | ) | (80    | )
|                                              |                           |   |        |  
|Income taxes                                  | (10                       | ) | (31    | )
|                                              |                           |   |        |  
|Profit/(loss) for the year                    | (66                       | ) | (111   | )
|                                              |                           |   |        |  
|Post-tax result disposal assets held for sale | (87                       | ) |        |  
|                                              |                           |   |        |  
|Profit attributable to minority interests     |                           |   |        |  
|                                              |                           |   |        |  
|Profit/(loss) from discontinued operations    | (153                      | ) | (111   | )
|                                              |                           |   |        |  
|(in € millions)                               |                           |   |        |  



|2006 DISCONTINUED LOGISTICS BUSINESSOn 4 November 2006 TNT completed the sale of the logistics
        division to affiliates of Apollo Management L.P. The total transaction
        value was €1,480 million on a cash and debt free basis. Taking into
        account deductions by the buyer for finance leases, pension and other
        employee benefits, and various costs for separation and rebranding, we
        received proceeds of €1,335 million, of which €15.5 million
        was received in the form of a 5% equity stake in Louis Topco Limited.In 2006 discontinued logistics operations resulted in an
        operating income of €43 million. Included in this income is a€35
        million loss in respect of a provision for onerous contracts. In the first
        quarter of 2006 the remainder of our French operations was sold to the
        French cargo transport operator Malherbe and Pierre-Michel Mendy/ Groupe
        Lapegue resulting in a total loss of €26 million, recorded in Other
        income. The loss in 2006 of €45 million on Result from
        investments in associates relates mainly to a €43 million asset
        impairment in respect of TNTs 20% equity interest in Global Automotive
        Logistics SAS.The post-tax transaction loss on disposal assets held for
        sale of the logistics business amounts to €87 million and includes
        various deal related expenses and the portion of our |  | cumulative translation adjustment that relates to our divested
  logistics business resulting in a charge of €12 million. For 2006 the total
  loss from discontinued operations related to the logistics business amounted
  to €153 million.
      2005 DISCONTINUED LOGISTICS BUSINESSThe total amount of our results from discontinued logistics
        operations for 2005 includes the results of the sale of the majority of
        our French operations to Norbert Dentressangle and to Malherbe amounting
        to a loss of €102 million, pre-tax. The result of the sale was recorded
        in Other income.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | Year ended at 31 December |  
|------------------------------------------- | ------------------------- | -
|                                            |                           |  
|CASH FLOW STATEMENTS LOGISTICS DIVISION     | 2006                      |  
|                                            |                           |  
|Net cash from operating activities          | (79                       | )
|                                            |                           |  
|Net cash used in investing activities       | (29                       | )
|                                            |                           |  
|Net cash used in financing activities       | 53                        |  
|                                            |                           |  
|Change in cash from discontinued operations | (55                       | )
|                                            |                           |  
|                                            |                           |  
|                                            |                           |  
|Cash at the beginning of the year           | 104                       |  
|                                            |                           |  
|Exchange rate differences                   | (1                        | )
|                                            |                           |  
|Change in cash from discontinued operations | (55                       | )
|                                            |                           |  
|Cash at the end of the year                 | 48                        |  
|                                            |                           |  
|(in € millions)                             |                           |  

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 126
|          

|Hereafter the separate statements of income and cash flow
  statements for the freight management business are shown. |  | 
|--------------------------------------------------------------------------------------------------------------------- |  | 

|                                                | Year ended at 31 December |  
|----------------------------------------------- | ------------------------- | -
|                                                |                           |  
|STATEMENT OF INCOME FREIGHT MANAGEMENT BUSINESS | 2006                      |  
|                                                |                           |  
|Net sales                                       | 844                       |  
|                                                |                           |  
|Other operating revenues                        |                           |  
|                                                |                           |  
|Total revenues                                  | 844                       |  
|                                                |                           |  
|Other income                                    |                           |  
|                                                |                           |  
|Total operating expenses                        | (832                      | )
|                                                |                           |  
|Operating income                                | 12                        |  
|                                                |                           |  
|Net financial (expense)/income                  | (9                        | )
|                                                |                           |  
|Results from investments in associates          |                           |  
|                                                |                           |  
|Profit/(loss) before taxes                      | 3                         |  
|                                                |                           |  
|Income taxes                                    | (7                        | )
|                                                |                           |  
|Profit/(loss) for the year                      | (4                        | )
|                                                |                           |  
|Post-tax result disposal assets held for sale   |                           |  
|                                                |                           |  
|Profit attributable to minority interests       |                           |  
|                                                |                           |  
|Profit/(loss) from discontinued operations      | (4                        | )
|                                                |                           |  
|(in € millions)                                 |                           |  

|In 2006 profit decreased by €6 million compared to 2005.
  This largely relates to the costs associated with the sale of freight management. |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                                 | Year ended at 31 December |  
|------------------------------------------------ | ------------------------- | -
|                                                 |                           |  
|CASH FLOW STATEMENTS FREIGHT MANAGEMENT BUSINESS | 2006                      |  
|                                                 |                           |  
|Net cash from operating activities               | 16                        |  
|                                                 |                           |  
|Net cash used in investing activities            | (1                        | )
|                                                 |                           |  
|Net cash used in financing activities            | (17                       | )
|                                                 |                           |  
|Change in cash from discontinued operations      | (2                        | )
|                                                 |                           |  
|                                                 |                           |  
|                                                 |                           |  
|Cash at the beginning of the year                | 32                        |  
|                                                 |                           |  
|Exchange rate differences                        | (1                        | )
|                                                 |                           |  
|Change in cash from discontinued operations      | (2                        | )
|                                                 |                           |  
|Cash at the end of the year                      | 29                        |  
|                                                 |                           |  
|(in € millions)                                  |                           |  

|£9 EQUITY: 2,008 MILLION (2005: 3,279)Equity consists of shareholders equity attributable to
  the equity holders of the parent of €1,983 million (2005: 3,262) and minority
  interest of €25 million (2005: 17). Equity attributable to the holders
  of the parent consists of the following items:
      ISSUED SHARE CAPITALIssued share capital amounted to €203 million at 31
        December 2006 (2005: 230; 2004: 230). The number of authorised, issued
        and outstanding shares by class of share is as follows: |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 

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|127 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

|                                                        |               |  |                |  |               | 
|------------------------------------------------------- | ------------- |  | -------------- |  | ------------- | 
|                                                        |               |  | At 31 December | 
|                                                        |               |  |                |  |               | 
|                                                        | 2006          |  | 2005           |  | 2004          | 
|                                                        |               |  |                |  |               | 
|Authorised                                              | 1,800,000,000 |  | 2,400,000,000  |  | 2,400,000,000 | 
|                                                        |               |  |                |  |               | 
|Ordinary shares                                         | 900,000,000   |  | 1,200,000,000  |  | 1,200,000,000 | 
|                                                        |               |  |                |  |               | 
|Preference B                                            | 899,999,999   |  | 1,199,999,999  |  | 1,199,999,999 | 
|                                                        |               |  |                |  |               | 
|Special share                                           | 1             |  | 1              |  | 1             | 
|                                                        |               |  |                |  |               | 
|Issued and outstanding                                  | 422,767,601   |  | 480,000,000    |  | 480,259,523   | 
|                                                        |               |  |                |  |               | 
|Ordinary shares                                         | 422,767,600   |  | 479,999,999    |  | 480,259,522   | 
|                                                        |               |  |                |  |               | 
|of which held by the
      company to cover share plans | 2,884,441     |  | 3,791,438      |  | 4,979,942     | 
|                                                        |               |  |                |  |               | 
|of which held by the
      company for cancellation     | 27,640,543    |  | 29,460,477     |  | 7,600,000     | 
|                                                        |               |  |                |  |               | 
|Preference B                                            | 0             |  | 0              |  | 0             | 
|                                                        |               |  |                |  |               | 
|Special share                                           | 1             |  | 1              |  | 1             | 
|                                                        |               |  |                |  |               | 
|of which held by the
      company for conversion       | 1             |  | 0              |  | 0             | 
|                                                        |               |  |                |  |               | 
|                                                       

|AUTHORISED SHARE CAPITALBy deed of 27 February 2006 our articles of association
        were amended. As of that date our authorized capital amounts to€864
        million, divided into 900,000,000 ordinary shares, 1 special share and
        899,999,999 preference shares B of €0.48 nominal value each. Prior
        to the amendment our authorised share capital amounted to €1,152
        million and was divided into 1,200,000,000 ordinary shares, 1 special
        share and 1,199,999,999 preference shares B of €0.48 nominal value
        each.
      FORM OF SHARESWe have ordinary shares in bearer form or in registered
        form. Ordinary shares in bearer form are represented by a global note
        held by the Dutch clearing system Euroclear Netherlands (formerly known
        as NECIGEF) and are transferable through Euroclear Netherlands book
        entry system. Ordinary shares in registered form are transferred by means
        of a deed of transfer and the companys written acknowledgement of
        the transfer. We do not have share certificates for ordinary shares represented
        by the global note. ADSs represent ordinary shares in bearer form represented
        by the note held by Euroclear Netherlands. The special share and the preference
        shares B are registered.
      REPURCHASE OF SHARES TO COVER SHARE PLANSDuring 2006 we purchased 2,700,000 ordinary shares to cover
        our obligations under the existing management option plans and share grants.
        Per 31 December 2006 the total number of shares held is 2,884,441 (2005:
        3,791,348; 2004: 4,979,942). TNT shares held by ourselves are not entitled
        to receive dividends nor have voting rights.
      REPURCHASE OF SHARES / REDUCTION OF THE ISSUED SHARE CAPITAL
        BY CANCELLATION OF SHARESOver the years 2004  2006 we repurchased shares for
        cancellation. Out of a total of 20.7 million ordinary shares purchased
        from the State of the Netherlands in 2004 and 2005, 259,523 shares were
        cancelled in 2005. Cancellation of these shares became effective on 16
        June 2005 following a resolution to that effect taken by the annual general
        meeting held on 7 April 2005.The cancellation of the remaining number of 20,440,477
        shares became effective as per the date of the amendment of our articles
        of association on 27 February 2006. |  | Under the share buy back programme announced on 6 December
        2005, we purchased 9,020,000 million ordinary shares in December 2005
        and 27,201,625 million ordinary shares in the period 1 January up to 14
        April 2006. On 20 April 2006 the annual general meeting of shareholders
        resolved to cancel the 36,221,625 ordinary shares purchased under the
        programme up to 14 April 2006. The cancellation of these shares became
        effective as of 27 June 2006. On 29 September 2006 the Extraordinary General
        Meeting of Shareholders resolved to cancel 570,297 ordinary shares that
        had been repurchased under the programme since 14 April 2006. The cancellation
        of these shares became effective as at 12 December 2006.In 2006, the total number of issued and outstanding ordinary
        shares thus decreased by 57,232,399. At a nominal value of€0.48
        per share, the cancellation equals an amount of €27 million.We commenced a further buy back programme of €1,000
        million on 6 November 2006. In total 27,640,543 million shares were repurchased
        during 2006. We therefore owned and held for cancellation 27,640,543 ordinary
        shares at 31 December 2006 (2005: 29,460,477; 2004: 7,600,000). This share
        buy back program was completed on 23 January 2007 with the repurchase
        of a total of 3,307,164 ordinary shares in 2007. A proposal to further
        reduce the issued share capital by cancellation of the total of 30,947,707
        shares repurchased under the November 2006 announced programme will be
        included in the agenda of the annual general meeting of 2007. At the meeting
        we can not vote on the shares held by us in our own capital.The number of shares repurchased during each month of 2006
        and the average purchase price per month are set out in the table hereafter.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 128
|          

|REPURCHASED IN:                                  |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|------------------------------------------------ | ---------------------------- |  | ---------------------------------- |  | ------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------- | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|                                                 | Number of shares purchased 1 |  | Average price paid per share(in €) |  | Total number of shares purchased as part
        of publicly announced plans or programmes |  | Approximate value of shares that may yet
        be purchased as part of publicly announced plans or programmes(in € million) | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|Plan announced on 6 December 2005 2              |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|January                                          | 8,182,752                    |  | 26.79                              |  | 17,202,752                                                                                 |  | 550                                                                                                                           | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|February                                         | 6,267,000                    |  | 27.68                              |  | 23,469,752                                                                                 |  | 377                                                                                                                           | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|March                                            | 8,665,000                    |  | 27.68                              |  | 32,134,752                                                                                 |  | 137                                                                                                                           | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|April                                            | 4,657,170                    |  | 29.33                              |  | 36,791,922                                                                                 |  | 0                                                                                                                             | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|Plan announced on 3 May 2006 3                   |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|May                                              | 2,700,000                    |  | 29.34                              |  | 2,700,000                                                                                  |  | 0                                                                                                                             | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|Plan announced on 6 November 2006 4              |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|November                                         | 23,768,386                   |  | 32.09                              |  | 23,768,386                                                                                 |  | 237                                                                                                                           | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|December                                         | 3,872,157                    |  | 32.03                              |  | 27,640,543                                                                                 |  | 113                                                                                                                           | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 
|Total number of shares purchased in
        2006 | 58,112,465                   |  | 28.50                              |  |                                                                                            |  |                                                                                                                               | 
|                                                 |                              |  |                                    |  |                                                                                            |  |                                                                                                                               | 

|1 | Between 24 May 2006 and 6 November 2006 we purchased no
      shares.                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | This plan to repurchase up to €1 billion worth of
      own shares was expired upon its completion on 19 April 2006.                                                                                                                                 
|3 | This plan to repurchase 2.7 million own shares to cover
      our obligation under the existing management option plans and share grants
      was expired upon its completion on 23 May 2006.                                                       
|4 | This plan to repurchase up to €1 billion worth of
        own shares was not expired 31 December 2006. The then remaining value
        of €113 million was repurchased in January 2007.
        The plan expired upon completion on 23 January 2007.

|SPECIAL SHAREOn 17 November 2006, the State of the Netherlands transferred
        its special share in the company for free to TNT. For the background to
        this transaction see Note 32. The conversion of the special share into
        an ordinary share will also be an item for the annual general meeting
        of 2007 as part of a proposed amendment to the articles of association
        of the Company.
      PREFERENCE SHARESThe Foundation Protection TNT was formed to care for our
        interests, the enterprises connected with us and all interested parties,
        such as shareholders and employees, by, among other things, preventing
        as much as possible influences which would threaten our continuity, independence
        and identity contrary to such interests. The Foundation Protection TNT
        is an independent legal entity and is not owned or controlled by any other
        legal person. Agreements have been concluded between us and the Foundation
        for the placement or acquisition of preference shares B.
      ADDITIONAL PAID IN CAPITALAdditional paid in capital of €1,245 million (2005:
        1,421) is exempt for Dutch tax purposes.
      CUMULATIVE TRANSLATION ADJUSTMENTIn 2006 the cumulative translation
        adjustment increased by €11 million (2005: 19). This is including
        an amount of €12 million, being the portion of our cumulative translation
        adjustment that relates to our divested logistics business. The €12
        million was released from equity and charged to income.The remainder of €-1 million (2005: 19) is the movement
        in exchange differences on converting foreign subsidiaries of TNT N.V.
        into euros. These differences are charged or credited to the cumulative
        translation adjustment, net of taxation.The cumulative translation adjustment reserve is a statutory
        reserve, which cannot be distributed to the equity holders of the company. |  | HEDGE RESERVESMovements on cash flow hedges amounted to €-9 million
        (2005:-12) resulting from the fair value movement on the €600 million
        and USD 306 million of forward starting interest swaps, net of taxes.
The hedge reserve is a statutory reserve, which cannot be distributed
  to the equity holders of the company.
      OTHER RESERVESThe other reserves of €0 (2005: 1,080) decreased by
        €1,080 million compared to 2005. This largely relates to the repurchase
        of shares in 2006. For more details on the repurchase plans announced
        in 2006, we refer to our description above.
The appropriation of net income from 2005 which is added to
  the Other reserves in 2006 amounts to €386 million (2005: 489).
In 2006 we increased our equity representing the fair value
  of share based transactions for an amount of €13 million (2005: 10).
The other movement of €54 million (2005: 28) includes
  the share grants of 2006 and 2005 and exercise rights of option plans of prior
  years.
      RETAINED EARNINGSThe profit for 2006 has been calculated as the net income
        for 2006 of TNT N.V. and all its subsidiaries. The 2006 unappropriated
        component is €561 million (2005: 559), containing the net profit
        of €670 million (2005: 659) and the paid interim dividend 2006 of
        €109 million (2005: 100). Subject to the approval of the general
        meeting of shareholders, the Board of Management proposes to add €378
        million (2005:386) to other reserves and to pay €183 million (2005:173)
        as final dividend.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|129 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   



£10 PROVISIONS FOR PENSION LIABILITIES: 23 MILLION (2005: 136) We operate a number of pension plans around the world. Most
  of our non-Dutch pension plans are defined contribution plans. For our non-Dutch
  employees we also operate other post-employment benefit plans and defined benefit
  plans, for which the liabilities are separately covered by private insurers
  and foreign pension funds. Our main Dutch company pension plan (main plan), which is externally
  funded in Stichting Pensioenfonds TNT (main fund), covers the employees
  who are subject to our collective labour agreement in the Netherlands. The majority
  of all our Dutch employees are subject to the collective labour agreement. The
  plan covers some 91,000 participants including approximately 11,000 pensioners
  and some 32,000 former employees. By Dutch law the plan is carried out by a
  separate legal entity and is managed by an independent board that falls under
  the supervision of the Nederlandsche Bank (DNB). As of 1 January 2006 new fiscal regulations apply to the Dutch
  pension plans. The early retirement scheme remains in force for the employees
  born before 1950. The retirement date has been increased however with 3.5 months.
  The early retirement scheme is no longer applicable for employees born on or
  after 1950. Depending upon age an additional arrangement is applicable for this
  group: 
        Employees as from the age of 39 on 1 January
          2005 receive conditional additional pension benefits to be accrued over
          the next 15 years and provided for only if the employee will remain
          a participant until the retirement date or 31 December 2020;
        Employees as from the age of 50 on 1 January
          2005 receive additional salary (between 2% and 10% depending upon age);
        Employees who would have been eligible
          for an early retirement allowance after 40 years of service, have the
          possibility to retire early for 50% while receiving a 90% payment.




The early retirement scheme and additional arrangements
      are collectively referred to as the transitional plan. In the main plan only the employer contributes to the fund.
      The level of contribution is based upon actuarial recommendations.The total
      contribution to the main pension fund amounted to €87 million in 2006
      (2005: 145) and is estimated to be €101 million in 2007. The benefits
      for the transitional plans amounted to €107 million in 2006 (2005:
      98) and are estimated at €97 million for 2007. The main fund runs an
      actively managed investment portfolio. The main fund uses asset and liability
      management studies that generate future scenarios to determine its optimal
      asset mix. During 2006, the dynamic weight of equity investments increased
      to 48.4%, the dynamic weight of fixed interest investments decreased to
      37.9% and the weight of real estate and alternative investments increased
      to 13.2%. The plan assets may from time to time include investment in TNTs
      own financial instruments through indirect holdings by mutual funds. However,
      these indirect holdings are an immaterial share of the total plan assets.
      The plan assets do not include property occupied by or other assets used
      by TNT. Derivatives of equity and debt instruments (e.g. SWAPs)
      may be used to realise changes in investment portfolio, to hedge against
      unfavourable market developments or to adjust the matching of assets and
      liabilities. The liabilities of our main plan and transitional plan
      cover approximately 92.3% of our liabilities for post-employment benefits
      and the assets cover approximately 92.3% of our total plan assets. The return
      on plan assets was 8.5% in 2006 (2005: 12.7%).


|                                          |            |   |               |   | At 31 December |  
|----------------------------------------- | ---------- | - | ------------- | - | -------------- | -
|                                          |            |   |               |   |                |  
|                                          | Actual mix |   | Strategic mix |  
|                                          |            |   |               |   |                |  
|                                          | 2006       |   | 2005          |   | 2007           |  
|                                          |            |   |               |   |                |  
|Equities                                  | 48.4       | % | 47.5          | % | 45             | %
|                                          |            |   |               |   |                |  
|Fixed interest and Inflation linked Bonds | 37.9       | % | 44.6          | % | 40             | %
|                                          |            |   |               |   |                |  
|Real estate and alternative investment    | 13.2       | % | 7.9           | % | 15             | %
|                                          |            |   |               |   |                |  
|Cash                                      | 0.5        | % |               |   |                |  
|                                          |            |   |               |   |                |  
|Total                                     | 100.0      | % | 100.0         | % | 100            | %
|                                          |            |   |               |   |                |  
|                                         

|                                          |      |   |                 |   |                              |  
|----------------------------------------- | ---- | - | --------------- | - | ---------------------------- | -
|HISTORICAL RETURNS                        |      |   |                 |   |                              |  
|                                          |      |   |                 |   |                              |  
|                                          | 2006 |   | 10-year average |   | Average since plan inception |  
|                                          |      |   |                 |   |                              |  
|Equities                                  | 15.2 | % | 10.6            | % | 9.0                          | %
|                                          |      |   |                 |   |                              |  
|Fixed interest and Inflation linked Bonds | 0.0  | % | 5.9             | % | 7.3                          | %
|                                          |      |   |                 |   |                              |  
|Real estate and alternative investment    | 18.5 | % | 10.2            | % | 7.5                          | %
|                                          |      |   |                 |   |                              |  
|Total                                     | 8.5  | % | 7.8             | % | 8.2                          | %
|                                          |      |   |                 |   |                              |  
|                                         

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 130
|---------- | - | -------------------- | ---
|          

|PENSION COSTS RECOGNISED IN THE STATEMENTS OF INCOMEInherent to the valuation of our pensions and the determination
        of our pension cost are key assumptions which include: employee turnover,
        mortality rates and retirement ages, discount rates, expected long term
        returns on plan assets, pension increases and future wage increases, which
        are usually updated on an annual basis at the beginning of each financial
        year. Actual circumstances may vary from these assumptions |  | giving rise to a different pension liability, which would
        be reflected as an additional profit or expense in our statement of income,
        in the next year.
      In 2006, our expense for post-employment benefit plans
        was€120 million (2005: 149). Total cash contributions
        for pensions in 2006 amounted to €230 million (2005: 264) and are
        expected to amount to approximately €210 million in 2007.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|STATEMENT OF CHANGES IN PROVISIONS FOR PENSION LIABILITIES |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|---------------------------------------------------------- | ------------------------------------- | - | ----------------------------------------------- |  | ------------------------------------ | - | -------------------------- |  | --------------------------------------- | -
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|                                                           | Balance at 1
      January
      2006 |   | Transfer to
      discontinued
      businesses |  | Employer
      pension
      expense |   | Contributions/
      Other |  | Balance at 31
      December
      2006 |  
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|Provision for pension liabilities                          | (78                                   | ) | 3                                               |  | (111                                 | ) | 222                        |  | 36                                      |  
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|of which main pension plan in the Netherlands              | 377                                   |   |                                                 |  | (12                                  | ) | 87                         |  | 452                                     |  
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|of which transitional plan in the Netherlands              | (480                                  | ) |                                                 |  | (86                                  | ) | 107                        |  | (459                                    | )
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|of which other pension plan                                | 25                                    |   | 3                                               |  | (13                                  | ) | 28                         |  | 43                                      |  
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|Other post-employment benefit plans                        | (58                                   | ) |                                                 |  | (9                                   | ) | 8                          |  | (59                                     | )
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|Total post-employment benefit plans                        | (136                                  | ) | 3                                               |  | (120                                 | ) | 230                        |  | (23                                     | )
|                                                           |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  
|(in € millions)                                            |                                       |   |                                                 |  |                                      |   |                            |  |                                         |  

|The provision for pension liabilities including liabilities
  related to other post-employment benefit plans as at 31 December 2006 of €4
  million, related to our discontinued freight management business and is included
  in liabilities related to assets classified as held for sale. €3 million
  included in the table above as transferred to discontinued business, represents
  the balance as at 1 January 2006 and does not reflect the movements during 2006. |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

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|    |                      |   |           
|--- | -------------------- | - | ----------
|131 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

|The funded status of our pension plans at 31 December 2006
      and 2005 and to the employer pension expense for 2006 and 2005, is presented
      in the table below. |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|PENSION DISCLOSURES                                                                                 |        |   |        |  
|--------------------------------------------------------------------------------------------------- | ------ | - | ------ | -
|                                                                                                    |        |   |        |  
|                                                                                                    | 2006   |   | 2005 1 |  
|                                                                                                    |        |   |        |  
|CHANGE IN BENEFIT OBLIGATION                                                                        |        |   |        |  
|                                                                                                    |        |   |        |  
|Benefit obligation at beginning of year                                                             | (5,398 | ) | (4,887 | )
|                                                                                                    |        |   |        |  
|Transfer to discontinued businesses                                                                 | 3      |   | 44     |  
|                                                                                                    |        |   |        |  
|Service costs                                                                                       | (171   | ) | (160   | )
|                                                                                                    |        |   |        |  
|Interest costs                                                                                      | (237   | ) | (235   | )
|                                                                                                    |        |   |        |  
|Other movements                                                                                     | (3     | ) | 13     |  
|                                                                                                    |        |   |        |  
|Amendments/foreign currency effects                                                                 | 4      |   | 18     |  
|                                                                                                    |        |   |        |  
|Prior service costs/termination benefit costs                                                       |        |   | (55    | )
|                                                                                                    |        |   |        |  
|Curtailments/settlements                                                                            | 12     |   | 45     |  
|                                                                                                    |        |   |        |  
|Actuarial (loss)/gain                                                                               | 221    |   | (353   | )
|                                                                                                    |        |   |        |  
|Benefits paid                                                                                       | 196    |   | 172    |  
|                                                                                                    |        |   |        |  
|Benefit obligation at end of year                                                                   | (5,373 | ) | (5,398 | )
|                                                                                                    |        |   |        |  
|CHANGE IN PLAN ASSETS                                                                               |        |   |        |  
|                                                                                                    |        |   |        |  
|Fair value of plan assets at beginning of year                                                      | 4,216  |   | 3,693  |  
|                                                                                                    |        |   |        |  
|Transfer to discontinued businesses                                                                 |        |   | (45    | )
|                                                                                                    |        |   |        |  
|Actual return on plan assets                                                                        | 405    |   | 490    |  
|                                                                                                    |        |   |        |  
|Contributions                                                                                       | 243    |   | 264    |  
|                                                                                                    |        |   |        |  
|Amendments/foreign currency effects                                                                 |        |   | (14    | )
|                                                                                                    |        |   |        |  
|Benefits paid                                                                                       | (196   | ) | (172   | )
|                                                                                                    |        |   |        |  
|Fair value of plan assets at end of year                                                            | 4,668  |   | 4,216  |  
|                                                                                                    |        |   |        |  
|FUNDED STATUS AS AT 31 DECEMBER                                                                     |        |   |        |  
|                                                                                                    |        |   |        |  
|Funded status                                                                                       | (705   | ) | (1,182 | )
|                                                                                                    |        |   |        |  
|Unrecognised net actuarial loss                                                                     | 732    |   | 1,094  |  
|                                                                                                    |        |   |        |  
|Unrecognised prior service costs                                                                    | 9      |   | 10     |  
|                                                                                                    |        |   |        |  
|Pension liabilities                                                                                 | 36     |   | (78    | )
|                                                                                                    |        |   |        |  
|Other employee benefit plans                                                                        | (59    | ) | (58    | )
|                                                                                                    |        |   |        |  
|Provisions for pension liabilities                                                                  | (23    | ) | (136   | )
|                                                                                                    |        |   |        |  
|COMPONENTS OF EMPLOYER PENSION EXPENSE                                                              |        |   |        |  
|                                                                                                    |        |   |        |  
|Service costs                                                                                       | (171   | ) | (160   | )
|                                                                                                    |        |   |        |  
|Interest costs                                                                                      | (237   | ) | (235   | )
|                                                                                                    |        |   |        |  
|Expected return on plan assets                                                                      | 346    |   | 301    |  
|                                                                                                    |        |   |        |  
|Amortisation of actuarial loss                                                                      | (58    | ) | (54    | )
|                                                                                                    |        |   |        |  
|Curtailment gain                                                                                    | 11     |   |        |  
|                                                                                                    |        |   |        |  
|Other costs                                                                                         | (2     | ) | 7      |  
|                                                                                                    |        |   |        |  
|Employer pension expense                                                                            | (111   | ) | (141   | )
|                                                                                                    |        |   |        |  
|Other post employment benefit plan expenses                                                         | (9     | ) | (8     | )
|                                                                                                    |        |   |        |  
|Total post employment benefit expenses                                                              | (120   | ) | (149   | )
|                                                                                                    |        |   |        |  
|WEIGHTED AVERAGE ASSUMPTIONS AS AT 31 DECEMBER                                                      |        |   |        |  
|                                                                                                    |        |   |        |  
|Discount rate                                                                                       | 4.7    | % | 4.3    | %
|                                                                                                    |        |   |        |  
|Expected return on plan assets                                                                      | 7.9    | % | 7.9    | %
|                                                                                                    |        |   |        |  
|Rate of compensation increase                                                                       | 2.0    | % | 2.0    | %
|                                                                                                    |        |   |        |  
|Rate of benefit increase                                                                            | 2.0    | % | 2.0    | %
|                                                                                                    |        |   |        |  
|(in € millions, except percentages)                                                                 |        |   |        |  
|1 All 2005 balances include balances related to our discontinued
      freight management business. |        |   |        |  



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|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 132
|          

Our pension costs are affected by the discount rate used to
  measure pension obligations and the expected long-term rate of return on plan
  assets. Management reviews these and other assumptions every year. Measurement
  date for our post-employment benefits is 31 December. Changes in assumptions
  may occur as a result of economic and market conditions. The impact of changes
  on the annual pension expense can be found in the table change in assumptions
  hereafter. If actual results differ from those assumed, this will generate actuarial
  gains or losses. These are amortised over the remaining average service lives
  of employees if they exceed the 10%-corridor. The discount rate is based on the long-term yield on high quality
  corporate bonds, including a correction for the duration-mismatch based on the
  yield curve used by Dutch pension funds as published by DNB.
    The duration of the available corporate bonds index (AA 10+) is around 12.
    The duration of the pension liabilities is around 18. The yield on these bonds
    is corrected for this duration-mismatch. Management considers various factors to determine the expected
  return on plan assets. The expected return is based on the current long-term
  rates of return on bonds and applies to these rates a suitable risk premium
  for the different asset components. The premium is based on the plans
  asset mix, historical market returns and current market expectation. Returns are linked to the strategic objective of the Stichting
  Pensioenfonds TNT, as annually reported in the Asset Liability Management study
  of the main fund. This main fund controls 92.3% of our total plan assets. Ultimately
  the long-term objective is to protect the assets from erosion of purchase power,
  and to provide long-term growth of capital without excessive exposure to risk.
  The duration of the plan liabilities determines the investment strategy. The
  assets are managed by outside investment managers. Active management strategies
  are utilised in an effort to realize investment returns in excess of market
  indices. This programme provides a reasonable expectation that returns can be
  achieved that exceeds indexed funds. The main fund establishes the investment
  policy and strategy, including the selection of investment managers, setting
  long term strategic targets and monitoring. The strategic asset mix is a target
  and not a limitation. The fund may approve components of the asset mix above
  or below targeted range. The fund may decide to rebalance or change the asset
  mix periodically. Assumptions regarding future mortality are based on advice,
  published statistics and experience per country. The majority of the defined
  benefit obligation relates to participants in the Netherlands. In the Netherlands
  the average life expectancy of men after retiring at the age of 65 is 16.9 years
  (2005: 16.4). The equivalent expectancy for women is 21.3 years (2005: 20.8).




Funded status defined benefit plansThe table below reconciles the opening and closing balances
    of the present value of the defined benefit obligation and the fair value
    of plan assets for the other defined benefit pension plans. Included in the
    provision for pension liabilities are other employee benefits for the unfunded
    defined benefit Trattamento di Fine Rapporto (TFR) in Italy of
    €59 million (2005: 58). The amounts recognised in the balance sheet are determined
  as follows: At 31 December2006
      
      2005Present value of funded benefit
      (4,551
      )
      (4,530
      )obligationsFair value of plan assets
      4,668
      
      4,216Unfunded status
      117
      
      (314
      )Present value of unfunded benefit
      (822
      )
      (868
      )obligationsUnrecognised liability
      741
      
      1,104Other employee benefit plans
      (59
      )
      (58
      )Liability in the balance sheet
      (23
      )
      (136
      )(in € millions) The table below shows the sensitivity of the employer pension
  expense to deviations in assumptions. CHANGE IN ASSUMPTIONS%-change in
          assumptions
      
      change in
          employer
          pension
          expenseEmployer pension expense
      
      
      
      (111
      )Discount rate
      
      + 0.5
      %
      39Expected return on plan assets
      
      +0.5
      %
      21Rate of compensation increase
      
      +0.5
      %
      (20
      )Rate of benefit increase
      
      +0.5
      %
      (69
      )Employer pension expense
      
      
      
      (111
      )Discount rate
      
      (0.5
      )%
      (64
      )Expected return on plan assets
      
      (0.5
      )%
      (22
      )Rate of compensation increase
      
      (0.5
      )%
      21Rate of benefit increase
      
      (0.5
      )%
      50(in € millions, except percentages) The table below shows the defined benefit obligation, fair
  value of plan assets and experience adjustments thereon for the current annual
  period and previous four annual periods. The experience adjustment is the difference
  between the expected and actual position at the end of the year, excluding the
  effect of changes in assumptions. The experience adjustment of the defined benefit
  obligation can not be reliably determined for previous years.


|                                    | At 31 December |  
|----------------------------------- | -------------- | -
|                                    |                |  
|                                    | 2006           |  
|                                    |                |  
|Defined benefit obligation          | (5,373         | )
|                                    |                |  
|Experience adjustment gain/(loss)   | (0.4%          | )
|                                    |                |  
|Fair value of plan assets           | 4,668          |  
|                                    |                |  
|Experience adjustment gain/(loss)   | 1.2%           |  
|                                    |                |  
|Unfunded status                     | (705           | )
|                                    |                |  
|(in € millions, except percentages) |                |  



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|    |                      |   |           
|--- | -------------------- | - | ----------
|133 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

The table below shows the expected future benefits per year
  for pension funds related to TNT plans. The benefits include all expected payments
  by the fund or TNT to the pensioners, including the Dutch transitional plan. Amounts expensed in the consolidated statements of income related
  to defined contribution plans were €35 million (2005: 26). Year
      
      Expected benefits as at 31 December 20062007
      
      1792008
      
      2022009
      
      2152010
      
      2312011
      
      2442012-2016
      
      1,203(in € millions)


£11 OTHER EMPLOYEE BENEFITS: 57 MILLION (2005:
  49)

Other employee benefit obligationsBalance at 31 December 2005
      
      49Additions
      
      13Withdrawals
      
      (5
      )Total changes
      
      8Balance at 31 December 2006
      
      57(in € millions)




No other employee benefits as at 31 December 2006 were transferred
  to liabilities related to assets classified as held for sale. Other employee benefits consist of provisions related to jubilee
  payments €32 million (2005: 33), long-service benefits €14 million
  (2005: 11), long term disability benefits €2 million (2005: 5) and other
  employee benefits of €9 million. Short term employee benefits, such as salaries, profit sharing
  and bonuses are discussed in note 19.






£12 STATEMENT OF CHANGES IN OTHER PROVISIONS: 193 MILLION (2005:
  134)



|STATEMENT OF CHANGES IN OTHER PROVISIONS                                     |               |   |                              |   |       |   |       |  
|---------------------------------------------------------------------------- | ------------- | - | ---------------------------- | - | ----- | - | ----- | -
|                                                                             | Restructuring |   | Claims and
      indemnities |   | Other |   | Total |  
|                                                                             |               |   |                              |   |       |   |       |  
|Balance at 31 December 2005                                                  | 43            |   | 52                           |   | 39    |   | 134   |  
|                                                                             |               |   |                              |   |       |   |       |  
|of which included in other provisions
      (non-current)                    | 29            |   | 45                           |   | 31    |   | 105   |  
|                                                                             |               |   |                              |   |       |   |       |  
|of which included in short term provisions                                   | 14            |   | 7                            |   | 8     |   | 29    |  
|                                                                             |               |   |                              |   |       |   |       |  
|CHANGES IN 2006                                                              |               |   |                              |   |       |   |       |  
|                                                                             |               |   |                              |   |       |   |       |  
|Additions                                                                    | 33            |   | 104                          |   | 10    |   | 147   |  
|                                                                             |               |   |                              |   |       |   |       |  
|Withdrawals                                                                  | (25           | ) | (40                          | ) | (9    | ) | (74   | )
|                                                                             |               |   |                              |   |       |   |       |  
|(De)consolidation                                                            |               |   |                              |   | (2    | ) | (2    | )
|                                                                             |               |   |                              |   |       |   |       |  
|Transfers to liabilities related to assets classified as
      held for sale |               |   |                              |   | (1    | ) | (1    | )
|                                                                             |               |   |                              |   |       |   |       |  
|Reclassification                                                             | 2             |   |                              |   | (2    | ) |       |  
|                                                                             |               |   |                              |   |       |   |       |  
|Other/releases                                                               | (8            | ) |                              |   | (3    | ) | (11   | )
|                                                                             |               |   |                              |   |       |   |       |  
|Total changes                                                                | 2             |   | 64                           |   | (7    | ) | 59    |  
|                                                                             |               |   |                              |   |       |   |       |  
|Balance at 31 December 2006                                                  | 45            |   | 116                          |   | 32    |   | 193   |  
|                                                                             |               |   |                              |   |       |   |       |  
|of which included in other provisions
      (non-current)                    | 26            |   | 58                           |   | 22    |   | 106   |  
|                                                                             |               |   |                              |   |       |   |       |  
|of which included in short term provisions                                   | 19            |   | 58                           |   | 10    |   | 87    |  
|                                                                             |               |   |                              |   |       |   |       |  
|(in € millions)                                                              |               |   |                              |   |       |   |       |  



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|2006 ANNUAL REPORT AND FORM 20-F
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 134
|          

Provisions as at 31 December 2006 of €1 million related
  to our discontinued freight management business is included in assets held for
  sale. €1 million included in the table above as transferred to liabilities
  related to assets classified as held for sale represents the balance as at 1
  January 2006 and does not reflect the movements during 2006. Provisions for restructuring include provisions related to
  employee related restructuring projects in the express division for €4
  million and in the mail division for €41 million. Restructuring in our
  mail division includes projects for mail activities in the Netherlands. During
  the year approximately 528 (2005: 430) employees were made redundant through
  such reorganisations, as a result of a combination of efficiency improvements
  and the impact of restructuring of the operations of our customers. Of the employees
  made




redundant during the year, paid via the restructuring provisions,
  152 (2005: 360) related to mail, 376 (2005: 70) related to employees in express. Provisions for claims and indemnities include provisions for
  insurance claims from third parties with respect to our ordinary business activities
  as well as indemnities and disputes related to the sale of our discontinued
  operations. More detailed information relating to these provisions is not provided
  since such information is expected to prejudice our position with respect to
  these indemnities and disputes. Other provisions consists of onerous contracts and dilapidation
  provisions. The estimated utilisation in 2007 is €87 million, in 2008
  €15 million, 2009 €9 million and 2010 and beyond €82 million.


£13 LONG TERM DEBT: 1,183 MILLION (2005: 1,071)

|                                                  | At 31 December | 
|------------------------------------------------- | -------------- | 
|                                                  |                | 
|CARRYING AMOUNTS AND FAIR VALUE OF LONG TERM DEBT | 2006           | 
|                                                  |                | 
|                                                  | Carrying       | 
|                                                  | Amount         | 
|                                                  |                | 
|Euro Bonds                                        | 1,004          | 
|                                                  |                | 
|Finance leases                                    | 146            | 
|                                                  |                | 
|Other loans                                       | 14             | 
|                                                  |                | 
|Interest rate swaps                               | 19             | 
|                                                  |                | 
|Total long term debt                              | 1,183          | 
|                                                  |                | 
|(in € millions)                                   |                | 



|Long term debt as at 31 December 2006 of €1 million
        related to our discontinued freight management business is included in
        liabilities relating to assets classified as held for sale. Long term
        debt as at 31 December 2005 of €61 million related to our discontinued
        logistics business is included in liabilities relating to assets classified
        as held for sale.
      The table below sets forth the carrying amounts of interest-bearing
        long term liabilities (including the current portion) during each of the
        following five years and thereafter: |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|---------------------------------------------- | ---------- |  | -------------------- |  | ----------- |  | ------------------------- |  | -------------------------- |  | ----- | 
|TOTAL BORROWINGS                               | Euro Bonds |  | Finance
      leases |  | Other loans |  | Interest rate
      swaps |  | Short term
      bank debt |  | Total | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|2007                                           |            |  | 12                   |  | 326         |  | 4                         |  | 41                         |  | 383   | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|2008                                           | 633        |  | 12                   |  | 6           |  | 11                        |  |                            |  | 662   | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|2009                                           |            |  | 11                   |  | 1           |  |                           |  |                            |  | 12    | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|2010                                           |            |  | 11                   |  | 2           |  |                           |  |                            |  | 13    | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|2011                                           |            |  | 15                   |  | 1           |  |                           |  |                            |  | 16    | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|Therafter                                      | 371        |  | 97                   |  | 4           |  | 8                         |  |                            |  | 480   | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|Total borrowings                               | 1,004      |  | 158                  |  | 340         |  | 23                        |  | 41                         |  | 1,566 | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|of which included in long term debt            | 1,004      |  | 146                  |  | 14          |  | 19                        |  |                            |  | 1,183 | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|of which included in other current liabilities |            |  | 12                   |  | 326         |  | 4                         |  | 41                         |  | 383   | 
|                                               |            |  |                      |  |             |  |                           |  |                            |  |       | 
|(in € millions)                                |            |  |                      |  |             |  |                           |  |                            |  |       | 



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|135 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

EUROBONDThe fair value of long term interest bearing debt, net of current
    portion, has been estimated by calculating the discounted value of the loan
    portfolio using an estimated yield curve, appropriate for the contract terms
    in effect at the end of the year. The carrying amounts of current portion
    of long term debt approximate their fair value. In 2001, TNT N.V. issued a €1 billion 5.125% Eurobond
  2008. In 2005 €354 million of the €1 billion 5.125% Eurobond 2008
  was exchanged for €386 million of a new 10-year 3.875% Eurobond 2015. At
  the time of the exchange, the 2015 bond was increased with an additional €14
  million to an outstanding total amount of €400 million. After the exchange
  the nominal value of the 5.125% Eurobond is €646 million, and the nominal
  value of the 3.875% Eurobond amounts to €400 million. The total €1,046 million (2005: 1,046) of Eurobonds is
  measured at amortised cost of €1,015 million (2005: 1,011). A fair value
  adjustment of positive €11 million (2005: 2) has been reflected in the
  amortised cost value to adjust the amortised cost value to the carrying amount
  of €1,004 million (2005: 1,009). FINANCE LEASESTotal debt on finance leases consist of financial lease contracts
    on buildings (depots), trucks and airplanes. The net market value of the long
    term portion of these leases amounted to€143 million. INTEREST RATE SWAPSTNT has €500 million (2005: 500) of interest rate swaps
    outstanding for which we receive fixed interest and pay floating interest.
    These interest rate swaps act as a hedge against the fair value interest rate
    risk of our 5.125% December 2008 Eurobond. The market value of these instruments
    amounted to negative €11 million as at 31 December 2006 (2005: -2). In December 2004, we entered into €500 million of forward
    starting interest rate swaps whereby we will receive floating interest and
    pay fixed interest. These flows of interest exchanges under the forward starting
    interest rate swaps will start per December 2008 and will end in June 2015.
    Due to the June 2005 exchange for the new 3.875% 2015 Eurobond, we have decided
    to unwind €400 million of outstanding forward starting interest rate
    swaps whereby we paid the market value of €12 million. Because the forward
    starting interest rate swap has been designated as a cash flow hedge, the
    market value will stay in equity until December 2008 and will be straight-line
    amortised to income until December 2015.The nominal value of the remaining forward starting
    interest rate swap agreed upon in December 2004 and starting per December
    2008 amounts to €100 million. In June 2006, we entered into another €500 million of
  forward starting interest rate swaps whereby we will receive floating interest
  and pay fixed interest. These flows of interest exchanges under the forward
  starting interest rate swaps will start per December 2008 and will end in June
  2015. The market value of the above mentioned long term outstanding
  forward starting interest rate swaps totaling €600 million, amounts to
  €8 million as at 31 December 2006 (2005: 5). As all forward starting swaps
  have been designated as cash




flow hedges, the market value movements have been included
  in equity. In 2006 we entered into USD 445 million of (forward starting)
  interest rate swaps whereby we will receive floating interest and pay fixed
  interest. These interest rate swaps act as a hedge against the cash flow interest
  rate risk of future lease terms with respect to the new acquired Boeing 747s.
  In December 2006 a USD 152 million forward starting interest rate swap was unwound
  whereby we paid the market value of €5 million. Because the swap has been
  designated as a cash flow hedge, the market value will remain in equity and
  will be straight-line amortised to income over the lease term of the related
  Boeing 747-400 ERF. The market value of the remaining USD 293 million (forward
  starting) interest rate swaps amounted to net €3 million negative as at
  31 December 2006. The fair value of the swaps is being classified under other
  financial fixed assets €1 million and other current liabilities €4
  million. As the swaps have been designated as cash flow hedges, the market value
  movements have been included in equity. COMMITTED FACILITIESAt 31 December 2006 TNT had the following committed facilities: 
    Multicurrency Revolving Credit Facility of
      €1,000 million;
    Multicurrency Revolving Credit Facility of
      €600 million.   £14 OTHER CURRENT LIABILITIES: 731 MILLION (2005: 571) At 31 December2006
      
      2005Short term bank debt
      
      41
      
      65Current portion of long term debt
      
      342
      
      148Total current borrowings
      
      383
      
      213Taxes and social security
      
      150
      
      137contributionsExpenses to be paid
      
      29
      
      62Other
      
      169
      
      159Total
      
      731
      
      571(in € millions) Other current liabilities as at 31 December 2006 of €25
  million related to our discontinued freight management business is included
  in liabilities relating to assets classified as held for sale. Other current
  liabilities as at 31 December 2005 of €398 million related to our discontinued
  logistics business is included in liabilities relating to assets classified
  as held for sale.


|                                
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|2006 ANNUAL REPORT AND FORM 20-F
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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 136
|          

TOTAL CURRENT BORROWINGSOther short term debt relates to drawn commercial paper of€287 million, short term bank facilities of €37
    million, the fair value of a USD 154 million forward starting interest rate
    swap of €4 million (for further disclosures, see note 13 Long Term Debt)
    and the current portion of long term bank deposits of€ 14
    million. As at 31 December 2005 other short term debt mainly includes
  a €129 million bilateral bullet loan maturing in 2006 with a fixed interest
  of 2.54% and is included in current portion of long term debt. There are no balances of 31 December 2006 that are expected
  to be settled after 12 months (2005: 70). OTHEROther includes shares repurchased under the share buy back
    program, but not being paid during 2006 of €6 million (2005: 17). Other also includes a fair value of €6 million (2005:
  31) relating to all outstanding short term foreign exchange forward contracts.
  Of the €6 million (2005: 31) an amount of €0 million (2005: 0) qualifies
  for hedge accounting and has been included directly in equity. The fair value
  has been calculated against the relevant market (forward) rates at 31 December
  2006. The notional principal amount of the outstanding foreign exchange forward
  contracts at 31 December 2006 is €621 million (2005: 794).




£15ACCRUED CURRENT LIABILITIES: 1,136 MILLION
    (2005: 1,126) At 31 December2006
      
      2005Amounts received in advance
      88
      
      99Expenses to be paid
      731
      
      669Vacation/vacation payments
      167
      
      177Terminal dues
      66
      
      79Other accrued current liabilities
      84
      
      102Total
      1,136
      
      1,126(in € millions) Amounts received in advance include €45 million (2005:
  59) for stamps which were sold but not yet used. An amount of €51 million is expected to be settled after
  12 months (2005: 45). Accrued current liabilities as at 31 December 2006 of €51
  million related to our discontinued freight management business is included
  in liabilities relating to assets classified as held for sale. Accrued current
  liabilities as at 31 December 2005 of €292 million related to our discontinued
  logistics business is included in liabilities relating to assets classified
  as held for sale.


NOTES TO THE CONSOLIDATED STATEMENTS
  OF INCOME

£16NET SALES: 9,948 MILLION (2005: 9,274; 2004:
    8,798)

The net sales of mail and express relate to the trading activities
    of these reportable segments, arising from rendering services. Net sales allocated
    by geographical area in the country or region in which the entity records
    sales is detailed in note 34. £17OTHER OPERATING REVENUES: 112 MILLION (2005:
    55; 2004: 29) Other operating revenues relate to the sale of goods and rendering
  of services not related to our normal trading




activities and mainly include rental income of temporarily
  leased-out property, passenger/ charter revenues, aircraft maintenance and engineering
  income and custom clearance income. £18OTHER INCOME: 65 MILLION (2005: 38; 2004: 8) Other income in 2006 mainly includes net proceeds from the
    sale of group companies of €24 million (2005: 12 million) and the sale
    of property, plant and equipment for €37 million (2005: 26; 2004: 8)
    and other income of €4 million.


£19SALARIES, PENSIONS AND SOCIAL SECURITY CONTRIBUTIONS:
  3,384 MILLION (2005: 3,318; 2004: 3,216)

|                                                                                   | Year ended at 31 December | 
|---------------------------------------------------------------------------------- | ------------------------- | 
|                                                                                   |                           | 
|                                                                                   | 2006                      | 
|                                                                                   |                           | 
|Salaries                                                                           | 2,823                     | 
|                                                                                   |                           | 
|Share based payments                                                               | 9                         | 
|                                                                                   |                           | 
|Pension charges:                                                                   |                           | 
|                                                                                   |                           | 
|Defined benefit plans                                                              | 120                       | 
|                                                                                   |                           | 
|Defined contribution plans                                                         | 35                        | 
|                                                                                   |                           | 
|Social security charges                                                            | 397                       | 
|                                                                                   |                           | 
|Total                                                                              | 3,384                     | 
|                                                                                   |                           | 
|(in € millions)                                                                    |                           | 
|1 The numbers for 2005 and 2004 have been adjusted for
      comparative purposes. |                           | 



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|    |                      |   |           
|--- | -------------------- | - | ----------
|137 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

|Included in salaries in 2004 was a positive effect from
        the settlement for future wage guarantees which resulted in a €134
        million refund from an insurance company. |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 

|LABOUR FORCE                                |         |  |         |  |         | 
|------------------------------------------- | ------- |  | ------- |  | ------- | 
|                                            | 2006    |  | 2005 1  |  | 2004 1  | 
|                                            |         |  |         |  |         | 
|Employees 2                                 |         |  |         |  |         | 
|                                            |         |  |         |  |         | 
|Express                                     | 54,060  |  | 48,845  |  | 46,502  | 
|                                            |         |  |         |  |         | 
|Mail                                        | 84,731  |  | 76,619  |  | 81,129  | 
|                                            |         |  |         |  |         | 
|Non-allocated                               | 431     |  | 836     |  | 430     | 
|                                            |         |  |         |  |         | 
|Total at year end                           | 139,222 |  | 126,300 |  | 128,061 | 
|                                            |         |  |         |  |         | 
|Employees of joint ventures 3               | 6,691   |  | 6,315   |  | 6,735   | 
|                                            |         |  |         |  |         | 
|Number of external agency staff at year end | 38,546  |  | 40,674  |  | 12,818  | 
|                                            |         |  |         |  |         | 
|FTEs year average 4                        |         |  |         |  |         | 
|                                            |         |  |         |  |         | 
|Express                                     | 49,858  |  | 44,847  |  | 42,876  | 
|                                            |         |  |         |  |         | 
|Mail                                        | 42,691  |  | 41,724  |  | 43.825  | 
|                                            |         |  |         |  |         | 
|Non-allocated                               | 424     |  | 822     |  | 417     | 
|                                            |         |  |         |  |         | 
|Total year average                          | 92,973  |  | 87,393  |  | 87,118  | 
|                                            |         |  |         |  |         | 
|FTEs of joint ventures 3,4                 | 5,368   |  | 4,940   |  | 5,336   | 
|                                            |         |  |         |  |         | 

|1 | The numbers for 2005 and 2004 have been adjusted for comparative
      purposes.                                                                                                                                                                                  
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Including temporary employees on our payroll.                                                                                                                                                                                                                     
|3 | These numbers represent all employees and ftes in
      the joint ventures.                                                                                                                                                                                      
|4 | 4 FTEs (full-time equivalents) are monthly calculated
      based on the total hours worked divided by the local standard week or local
      contracts. The yearly average is calculated by summing the monthly numbers
      and dividing the result by twelve.



At the end of 2006, 6,691 people (2005: 6,315; 2004: 6,735)
  were employed by joint ventures, of whom 4,824 (2005: 4,562; 2004: 4,964) were
  on the payroll of Dutch companies, primarily Postkantoren B.V. and 1,867 (2005:
  1,753; 2004: 1,771) were on the payroll of companies outside the Netherlands. In 2006 the average number of average full-time employee equivalents
  in the mail division was 42,691. This was a increase of 2.3% compared to last
  year and was mainly caused by the addressed mail expansion of european mail
  networks of around 2,900 FTE, especially in Germany and the UK. This is partly
  offset by the decrease in mail Netherlands of around 2,000 FTE, resulting from
  several efficiency initiatives. The 11.2% increase of average full-time employee equivalents
  in express was caused by organic growth as well as the acquisition of TG+ and
  Speedage.




The total number of employees in our discontinued freight management
  business was 2,293 as at 31 December 2006, 2,286 as at 31 December 2005 (2004:
  2,317). The FTE average was 2,248 in 2006, 2,244 in 2005 (2004: 2,260). Our operations in logistics were sold during 2006. The total
  number of employees in discontinued logistics business was 35,285 as at 31 December
  2005 (2004: 37,046). The FTE average was 33,436 in 2005 (2004: 36,360). The
  total number of employees of joint ventures in our discontinued logistics business
  was 1,666 as at 31 December 2005 (2004: 2,244). REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARDOver 2006, the accrued remuneration of the current members
    of the Supervisory Board, excluding VAT, amounted to€556,000
    (2005: 524,897; 2004: 345,437). The remuneration of the individual members
    of the Supervisory Board is set out in the table below:


|SUPERVISORY BOARD COMPENSATION |                   |  |                  |  |                    | 
|------------------------------ | ----------------- |  | ---------------- |  | ------------------ | 
|                               | Base compensation |  | Other payments 1 |  | Total remuneration | 
|                               |                   |  |                  |  |                    | 
|J.H.M. Hommen                  | 60,000            |  | 6,500            |  | 66,500             | 
|                               |                   |  |                  |  |                    | 
|R.J.N. Abrahamsen              | 45,000            |  | 20,500           |  | 65,500             | 
|                               |                   |  |                  |  |                    | 
|J.M.T. Cochrane                | 45,000            |  | 12,500           |  | 57,500             | 
|                               |                   |  |                  |  |                    | 
|R. Dahan                       | 45,000            |  | 9,000            |  | 54,000             | 
|                               |                   |  |                  |  |                    | 
|V. Halberstadt                 | 45,000            |  | 18,000           |  | 63,000             | 
|                               |                   |  |                  |  |                    | 
|G. Kampouri Monnas             | 45,000            |  | 10,500           |  | 55,500             | 
|                               |                   |  |                  |  |                    | 
|R. King 2                      | 31,500            |  |                  |  | 31,500             | 
|                               |                   |  |                  |  |                    | 
|W. Kok                         | 45,000            |  | 10,500           |  | 55,500             | 
|                               |                   |  |                  |  |                    | 
|S. Levy                        | 45,000            |  | 10,500           |  | 55,500             | 
|                               |                   |  |                  |  |                    | 
|R.W.H. Stomberg                | 45,000            |  | 6,500            |  | 51,500             | 
|                               |                   |  |                  |  |                    | 
|Total                          | 451,500           |  | 104,500          |  | 556,000            | 
|                               |                   |  |                  |  |                    | 
|(in €)                         |                   |  |                  |  |                    | 

|1 | Payments relating to number of Supervisory Board committee
      meetings attended.
|- | -----------------------------------------------------------------------------------
|2 | Appointed per 20 April 2006.                                                       

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 138
|          

No options or shares were granted to members of theSupervisory
    Board and none of the members of the Supervisory Board accrued any pension
    rights with our company. REMUNERATION OF MEMBERS OF THE BOARD OF MANAGEMENTIn 2006 the total remuneration of the Board of Management consisted
    of: 
    base salary
    other periodic paid compensation
    variable compensation:
    accrued short term incentive
    accrued long term incentive
    pension In the paragraphs below the 2006 values of each of these remuneration
  elements will be reported per Member of the Board of Management. Until 4 November 2006, the Board of Management consisted of
  five members. As from 4 November 2006, the date of




divestment of the logistics division, the Board of Management
  consists of four members. As announced earlier, Jan Haars has resigned as CFO
  at the end of March. As per the closure of the Annual General Meeting of Shareholders
  on 20 April 2006, the Supervisory Board appointed Henk van Dalen as new member
  of the Board of Management. Henk van Dalen joined TNT on 1 April 2006 as Chief
  Financial Officer. TOTAL REMUNERATIONIn 2006, the remuneration, including pension and social security
  contributions, of the current and the former members of the Board of Management
  amounted to €9,947,362 (2005: 9,784,714). In 2006, Dave Kulik received a special incentive award of€1,6
    million for the successful completion of the sale of the logistics division.
    Jan Haars received a final severance payment of €60,812. The other part
    of his severance payment was reported in 2005. The remuneration of the individual members of the Board of
  Management is set out in the table below:


|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|------------------------------------------- | ----------- |  | ------------------------------------------------- |  | -------------------------- |  | ------------------------- |  | ----------------- |  | ---------------------------- |  | ---------- |  | ---------- | 
|COMPENSATION & BENEFITS BOARD OF MANAGEMENT |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |           
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|                                            | Base salary |  | Other 
        periodicpaidcompensation
        1 |  | Accruedshort termincentive |  | Accruedlong termincentive |  | Severancepayments |  | Pensionrelated
        costs |  | 2006 Total |  | 2005 Total | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Peter Bakker                                | 900,000     |  | 61,074                                            |  | 741,067                    |  | 353,658                   |  |                   |  | 121,825                      |  | 2,177,624  |  | 1,911,788  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Henk van Dalen 2                            | 450,000     |  | 361,109                                           |  | 378,000                    |  | 40,842                    |  |                   |  | 314,968                      |  | 1,544,919  |  |            | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Harry Koorstra                              | 600,000     |  | 51,623                                            |  | 507,639                    |  | 177,617                   |  |                   |  | 113,725                      |  | 1,450,604  |  | 1,429,495  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Marie-Christine Lombard                     | 600,000     |  | 440,736                                           |  | 484,914                    |  | 206,775                   |  |                   |  | 276,000                      |  | 2,008,425  |  | 1,676,571  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Total current members                       | 2,550,000   |  | 914,542                                           |  | 2,111,620                  |  | 778,892                   |  |                   |  | 826,518                      |  | 7,181,572  |  | 5,017,854  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Jan Haars                                   | 125,000     |  | 1,438                                             |  |                            |  |                           |  | 60,812            |  |                              |  | 187,250    |  | 2,974,984  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Dave Kulik 3                                | 508,000     |  | 79,211                                            |  | 1,600,000                  |  |                           |  |                   |  | 391,329                      |  | 2,578,540  |  | 1,791,876  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Total former members                        | 633,000     |  | 80,649                                            |  | 1,600,000                  |  |                           |  | 60,812            |  | 391,329                      |  | 2,765,790  |  | 4,766,860  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|Total Board of Management                   | 3,183,000   |  | 995,191                                           |  | 3,711,620                  |  | 778,892                   |  | 60,812            |  | 1,217,847                    |  | 9,947,362  |  | 9,784,714  | 
|                                            |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 
|(in €)                                      |             |  |                                                   |  |                            |  |                           |  |                   |  |                              |  |            |  |            | 

|1 | Includes company costs related to tax and social security,
      company car and other costs. For Marie-Christine Lombard this relates also
      to additional tax costs for special incentive for performance in 2005, paid
      out in 2006. For Henk van Dalen this also includes a compensation for the
      loss of long term incentive rights at former employer.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | In service per 1 April 2006.                                                                                                                                                                                                                                                                                                                                              
|3 | Includes special short term incentive for succesful completion
      of divestment Logistics.                                                                                                                                                                                                                                                                             



Base salaryIn 2006 the members of the Board of Management did not receive
    a general increase in base salary. Other periodic paid compensationAccording to the employment agreement of Henk van Dalen an
    amount of €1,300,000 will be paid as compensation for the loss of existing
    long term incentive rights with his former employer. This amount will become
    payable in four equal annual installments, provided he is still employed by
    the company on the payment dates. In 2006 Henk van Dalen received a compensation
    of €325,000 included in other periodic paid




compensation of €361,109. In above table, the amount of
  other periodic paid compensation for Henk van Dalen does not include the one-off
  cost allowances of €81,000 related to moving costs. Variable compensationIn the table below the total variable compensation granted
    in 2006 to the members of the Board of Management is expressed as a percentage
    of base salary. For this purpose the costs of the rights on matching shares,
    share options and rights on performance shares were calculated using the Monte
    Carlo method and a weighted probability analysis provided by Hewitt Associates.


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|--- | -------------------- | - | ----------
|139 | FINANCIAL STATEMENTS | | | CHAPTER 12
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|PERCENTAGE VARIABLE COMPENSATION BOARD OF MANAGEMENT |                |  |                |  |                |  |          | 
|---------------------------------------------------- | -------------- |  | -------------- |  | -------------- |  | -------- | 
|                                                     |                |  |                |  |                |  |          | 
|                                                     | Accrued short  |  | Accrued long   |  | Total variable |  | as % of  | 
|                                                     | term incentive |  | term incentive |  | compensation   |  | base pay | 
|                                                     |                |  |                |  |                |  |          | 
|Peter Bakker                                         | 741,067        |  | 353,658        |  | 1,094,725      |  | 122%     | 
|                                                     |                |  |                |  |                |  |          | 
|Henk van Dalen                                       | 378,000        |  | 40,842         |  | 418,842        |  | 93%      | 
|                                                     |                |  |                |  |                |  |          | 
|Harry Koorstra                                       | 507,639        |  | 177,617        |  | 685,256        |  | 114%     | 
|                                                     |                |  |                |  |                |  |          | 
|Marie-Christine Lombard                              | 484,914        |  | 206,775        |  | 691,689        |  | 115%     | 
|                                                     |                |  |                |  |                |  |          | 
|Total                                                | 2,111,620      |  | 778,892        |  | 2,890,512      |  |          | 
|                                                     |                |  |                |  |                |  |          | 
|(in €, except percentages)                           |                |  |                |  |                |  |          | 

ACCRUED SHORT TERM INCENTIVESince 2002, we account for bonus payments on the basis of the
    accrued bonuses for the performance of the year reported. In 2006, an amount
    of €1,922,279 was paid to the members of the Board of Management for
    performance over 2005.For 2006 both express and mail exceeded their economic profit
  targets. The 2006 performance on earnings from continuing operations also exceeded
  the set targets. The bonus for the members of the Board of Management is paid
  out partly in cash and partly in shares, see also below the paragraph share
  matching plan. In the table below the amount of




€1,953,000 reflects the accrued bonuses for performance
  over 2006 and the amount of €158,620 reflects the accrued costs for the
  rights on matching shares that were granted in 2006, 2005, 2004 and 2003. The
  costs for the rights on matching shares related to the matching shares granted
  in 2006 for the performance over 2005, amounted for Peter Bakker to €15,990
  and for Harry Koorstra and Marie-Christine Lombard €11,699. The 2006 accrued short term incentive amounts for the members
  of the Board of Management are accrued as set out below:


|SHORT TERM INCENTIVE BOARD OF MANAGEMENT                                       |                                          |  |                        |   |                                     |  |                             |  |                 | 
|------------------------------------------------------------------------------ | ---------------------------------------- |  | ---------------------- | - | ----------------------------------- |  | --------------------------- |  | --------------- | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|                                                                               | Accrued for
      2006
      performance |  | as % of base
      pay |   | Accrued for
      matching shares 1 |  | Accrued shortterm incentive |  | as % of basepay | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|Peter Bakker                                                                   | 675,000                                  |  | 75                     | % | 66,067                              |  | 741,067                     |  | 82%             | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|Henk van Dalen                                                                 | 378,000                                  |  | 84                     | % |                                     |  | 378,000                     |  | 84%             | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|Harry Koorstra                                                                 | 450,000                                  |  | 75                     | % | 57,639                              |  | 507,639                     |  | 85%             | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|Marie-Christine Lombard                                                        | 450,000                                  |  | 75                     | % | 34,914                              |  | 484,914                     |  | 81%             | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|Total                                                                          | 1,953,000                                |  |                        |   | 158,620                             |  | 2,111,620                   |  |                 | 
|                                                                               |                                          |  |                        |   |                                     |  |                             |  |                 | 
|(in €, except percentages)                                                     |                                          |  |                        |   |                                     |  |                             |  |                 | 
|1 Includes costs for matching shares granted in 2006 and
      previous years. |                                          |  |                        |   |                                     |  |                             |  |                 | 

Share matching planIn 2006, the short term incentive related to the realisation
    of targets over 2005 for the Board of Management amounted to€ 1,772,279
    (2005: €2,288,333). Of this amount, 75%(€1,329,209)
    was paid in cash and 25% (€443,070) was paid in shares.The number of shares involved is calculated by dividing the
  25% of the bonus by the share price on the day of grant. The day of grant is
  the day following the announcement of the first quarter results. If at least
  50% of the shares are retained for a period of three years, the company will
  match the amount of shares on a one-to-one basis. In compliance with the Dutch
  corporate




governance code, the members of the Board of Management may
  not sell their matching shares before the earlier of five years from the date
  of grant or the end of the employment, although any sale of shares for the purpose
  of using the proceeds to pay for the tax relating to the grant of these shares
  is exempted. These bonus shares are held in a trust by our share administrator. All members of the Board of Management participated in the
  scheme for the bonus earned during their membership of the Board of Management.
  Their current matching entitlement is set out in the following table:


|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 140
|          



|BONUS-RELATED MATCHING RIGHTS BOARD OF MANAGEMENT 1                                                                                                                     |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | ----------------------------------------- |  | -------------- |  | ---------------- |  | ---------------- |  | -------------- |  | ---------------- | 
|                                                                                                                                                                        |      |  |                                           |  |                | 
|                                                                                                                                                                        | Year |  | Number of matching rights on
      shares |  | Remaining      | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  | years in         | 
|                                                                                                                                                                        |      |  | Outstanding as                            |  | Granted during |  | Exercised during |  | Forfeited during |  | Outstanding as |  | contractual life | 
|                                                                                                                                                                        |      |  | at 1 Jan 2006                             |  | 2006           |  | 2006             |  | 2006             |  | at 31 Dec 2006 |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Peter Bakker                                                                                                                                                            | 2003 |  | 7,042                                     |  |                |  | 7,042            |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2004 |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2005 |  | 8,211                                     |  |                |  |                  |  |                  |  | 8,211          |  | 1.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2006 |  |                                           |  | 4,159          |  |                  |  |                  |  | 4,159          |  | 2.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Henk van Dalen                                                                                                                                                          | 2006 |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Harry Koorstra                                                                                                                                                          | 2003 |  | 5,523                                     |  |                |  | 5,523            |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2004 |  | 2,602                                     |  |                |  |                  |  |                  |  | 2,602          |  | 0.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2005 |  | 5,474                                     |  |                |  |                  |  |                  |  | 5,474          |  | 1.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2006 |  |                                           |  | 3,043          |  |                  |  |                  |  | 3,043          |  | 2.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Marie-Christine Lombard                                                                                                                                                 | 2005 |  | 4,562                                     |  |                |  |                  |  |                  |  | 4,562          |  | 1.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2006 |  |                                           |  | 3,043          |  |                  |  |                  |  | 3,043          |  | 2.3              | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Total current members                                                                                                                                                   |      |  | 33,414                                    |  | 10,245         |  | 12,565           |  |                  |  | 31,094         |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Jan Haars                                                                                                                                                               | 2003 |  | 4,062                                     |  |                |  |                  |  | 4,062            |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2004 |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2005 |  | 4,562                                     |  |                |  |                  |  | 4,562            |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Dave Kulik                                                                                                                                                              | 2003 |  | 3,880                                     |  |                |  | 3,880            |  |                  |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2004 |  | 1,863                                     |  |                |  | 1,553            |  | 310              |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2005 |  | 5,028                                     |  |                |  | 2,514            |  | 2,514            |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|                                                                                                                                                                        | 2006 |  |                                           |  | 2,132          |  | 356              |  | 1,776            |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Total former members                                                                                                                                                    |      |  | 19,395                                    |  | 2,132          |  | 8,303            |  | 13,224           |  |                |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|Total Board of Management                                                                                                                                               |      |  | 52,809                                    |  | 12,377         |  | 20,868           |  | 13,224           |  | 31,094         |  |                  | 
|                                                                                                                                                                        |      |  |                                           |  |                |  |                  |  |                  |  |                |  |                  | 
|1 The matching rights of the (former)
      members of the Board of Management include the matching rights granted before
      appointment to the Board of Management. |      | 

In 2006 the average price on exercise for matching shares
    for the (former) members of the Board of Management was€ 29.68. ACCRUED LONG TERM INCENTIVEThe maximum numbers of options and performance shares that
    can vest are disclosed in this report (150% of base allocation




share options and 120% of base allocation performance shares).
  In the table below the costs of the total share options and rights on performance
  shares granted to the members of the Board of Management are expressed as a
  percentage of base salary. For the calculation of the costs of the granted long
  term incentive, the Monte Carlo method is used as well as a weighted probability
  analysis provided by Hewitt Associates:


|LONG TERM INCENTIVE BOARD OF MANAGEMENT |               |  |                |  |                |  |          | 
|--------------------------------------- | ------------- |  | -------------- |  | -------------- |  | -------- | 
|                                        |               |  |                |  |                |  |          | 
|                                        | Share options |  | Rights on      |  | Accrued long   |  | as % of  | 
|                                        | granted in    |  | performance    |  | term incentive |  | base pay | 
|                                        | 2003-2004     |  | shares granted |  |                |  |          | 
|                                        |               |  | in 2003-2006   |  |                |  |          | 
|                                        |               |  |                |  |                |  |          | 
|Peter Bakker                            | 85,848        |  | 267,810        |  | 353,658        |  | 39%      | 
|                                        |               |  |                |  |                |  |          | 
|Henk van Dalen                          |               |  | 40,842         |  | 40,842         |  | 9%       | 
|                                        |               |  |                |  |                |  |          | 
|Harry Koorstra                          | 42,924        |  | 134,693        |  | 177,617        |  | 30%      | 
|                                        |               |  |                |  |                |  |          | 
|Marie-Christine Lombard                 | 41,261        |  | 165,514        |  | 206,775        |  | 34%      | 
|                                        |               |  |                |  |                |  |          | 
|Total                                   | 170,033       |  | 608,859        |  | 778,892        |  |          | 
|                                        |               |  |                |  |                |  |          | 
|(in €, except percentages)              |               |  |                |  |                |  |          | 

The costs of the granted performance shares in 2006 amounted
  for Peter Bakker: €81,679, for Henk van Dalen and Harry Koorstra: €40,842
  and for Marie-Christine Lombard: €74,810. Vesting of the long term incentiveThe vesting of the long term incentive, the share options and
  the performance shares, depends on the companys performance on total shareholder
  return. Our relative total shareholder return over the period from 1 January
  2003 through 31 December 2005 governs the share option grant and performance
  share grant for 2003. Our relative total shareholder return over the period
  from 1 January 2004




through 31 December 2006 governs the share option grant and
  performance share grant for 2004. Our relative total shareholder return over
  the period from 1 January 2005 through 31 December 2007 governs the performance
  share grant for 2005. Our relative total shareholder return over the period
  from 4 May 2006 through 3 May 2009 governs the performance share grant for 2006. Based on the total shareholder return vesting percentages,
  the next table shows the actual vesting of the 2003 and 2004 share options as
  well as the 2003 and 2004 performance shares. For the grants after 2004 it shows
  what would vest if the performance period ended on 31 December 2006.


|
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|    |                      |   |           
|--- | -------------------- | - | ----------
|141 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   



|VESTING PER YEAR END ACCORDING |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|------------------------------ | ---- |  | ---------------------------------------------------------------------- |  | --------------------------------- |  | -------------------------------------------------------------- |  | --------------------------------- | 
|TO TSR PERFORMANCE SCHEDULES   |      |  |                                                                        |  |                                   | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | Year |  | Share options                                                          |  | Performance shares                | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               |      |  | Vesting % of baseallocation
        relatingto TSR performanceschedule |  | Vesting as per31
        Dec 2006 |  | Vesting % of baseallocation relating toTSR performanceschedule |  | Vesting as per31
        Dec 2006 | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|Peter Bakker                   | 2003 |  | 75%                                                                    |  | 30,000                            |  | 75%                                                            |  | 7,373                             | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2004 |  | 100%                                                                   |  | 60,000                            |  | 100%                                                           |  | 10,846                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2005 |  |                                                                        |  |                                   |  | 110%                                                           |  | 42,671                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2006 |  |                                                                        |  |                                   |  | 75%                                                            |  | 20,039                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|Henk van Dalen                 | 2006 |  |                                                                        |  |                                   |  | 75%                                                            |  | 10,020                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|Harry Koorstra                 | 2003 |  | 75%                                                                    |  | 15,000                            |  | 75%                                                            |  | 4,916                             | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2004 |  | 100%                                                                   |  | 30,000                            |  | 100%                                                           |  | 5,423                             | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2005 |  |                                                                        |  |                                   |  | 110%                                                           |  | 21,335                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2006 |  |                                                                        |  |                                   |  | 75%                                                            |  | 10,020                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|Marie-Christine Lombard        | 2003 |  | 75%                                                                    |  | 9,000                             |  |                                                                |  |                                   | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2004 |  | 100%                                                                   |  | 30,000                            |  | 100%                                                           |  | 5,423                             | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2005 |  |                                                                        |  |                                   |  | 110%                                                           |  | 21,335                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                               | 2006 |  |                                                                        |  |                                   |  | 75%                                                            |  | 22,520                            | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|Total                          |      |  |                                                                        |  | 174,000                           |  |                                                                |  | 181,921                           | 
|                               |      |  |                                                                        |  |                                   |  |                                                                |  |                                   | 
|                              

Long term incentive/share option planThe table below summarises the status of the number of outstanding
    options of our ordinary shares granted to the




Board of Management. During 2006 all members of the Board exercised
  options.


|OPTIONS BOARD OF MANAGEMENT 1                                                                                                                            |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | --------------------------------- |  | ---------------------------- |  | ---------------------------- |  | ----------------------------------- |  | ------------- |  | -------------------------- |  | --------------- | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              | 
|                                                                                                                                                         | Year |  | Number of options                 |  | Amounts in €                 |  | Remaining                    | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  | years in        | 
|                                                                                                                                                         |      |  | Oustandingas at
        1 Jan2006 |  | Exercisedduring
        2006 |  | Forfeitedduring
        2006 |  | Outstandingas at
        31 Dec2006 |  | Exerciseprice |  | Share priceon exercisedate |  | contractuallife | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Peter Bakker                                                                                                                                             | 2001 |  | 20,000                            |  | 20,000                       |  |                              |  |                                     |  | 23.66         |  | 27.20                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2002 |  | 30,000                            |  | 30,000                       |  |                              |  |                                     |  | 22.24         |  | 27.20                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2003 |  | 60,000                            |  | 30,000                       |  | 30,000                       |  |                                     |  | 13.85         |  | 31.84                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2004 |  | 90,000                            |  |                              |  | 30,000                       |  | 60,000                              |  | 18.44         |  |                            |  | 5.3             | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Harry Koorstra                                                                                                                                           | 2001 |  | 20,000                            |  | 20,000                       |  |                              |  |                                     |  | 23.66         |  | 27.29                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2002 |  | 15,000                            |  | 15,000                       |  |                              |  |                                     |  | 22.24         |  | 27.24                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2003 |  | 30,000                            |  | 15,000                       |  | 15,000                       |  |                                     |  | 13.85         |  | 32.00                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2004 |  | 45,000                            |  |                              |  | 15,000                       |  | 30,000                              |  | 18.44         |  |                            |  | 5.3             | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Marie-Christine Lombard                                                                                                                                  | 2001 |  | 9,000                             |  | 9,000                        |  |                              |  |                                     |  | 23.66         |  | 27.12                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2002 |  | 6,750                             |  | 6,750                        |  |                              |  |                                     |  | 22.24         |  | 27.12                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2003 |  | 18,000                            |  | 9,000                        |  | 9,000                        |  |                                     |  | 13.85         |  | 31.82                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2004 |  | 45,000                            |  |                              |  | 15,000                       |  | 30,000                              |  | 18.44         |  |                            |  | 5.3             | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Total current members                                                                                                                                    |      |  | 388,750                           |  | 154,750                      |  | 114,000                      |  | 120,000                             |  |               |  |                            |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Jan Haars                                                                                                                                                | 2002 |  | 15,000                            |  | 15,000                       |  |                              |  |                                     |  | 18.41         |  | 27.32                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2003 |  | 30,000                            |  | 15,000                       |  | 15,000                       |  |                                     |  | 13.85         |  | 27.93                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2004 |  | 45,000                            |  |                              |  | 45,000                       |  |                                     |  | 18.44         |  |                            |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Dave Kulik                                                                                                                                               | 2001 |  | 10,000                            |  | 10,000                       |  |                              |  |                                     |  | 23.66         |  | 27.15                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2002 |  | 7,500                             |  | 7,500                        |  |                              |  |                                     |  | 22.24         |  | 27.15                      |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2003 |  | 18,000                            |  |                              |  | 9,000                        |  | 9,000                               |  | 13.85         |  |                            |  | 0.3             | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|                                                                                                                                                         | 2004 |  | 45,000                            |  |                              |  | 15,000                       |  | 30,000                              |  | 18.44         |  |                            |  | 0.3             | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Total former members                                                                                                                                     |      |  | 170,500                           |  | 47,500                       |  | 84,000                       |  | 39,000                              |  |               |  |                            |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|Total Board of Management                                                                                                                                |      |  | 559,250                           |  | 202,250                      |  | 198,000                      |  | 159,000                             |  |               |  |                            |  |                 | 
|                                                                                                                                                         |      |  |                                   |  |                              |  |                              |  |                                     |  |               |  |                            |  |                 | 
|1 The options of the (former) members of the
      Board of Management include the options granted before appointment to the
      Board of Management.. |      |  |                                  



|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

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Back to Contents

|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 142
|          



Long term incentive/performance share planThe table below summarises the status of the rights awarded
  under the performance share plan to the members of the Board of Management:







|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|------------------------------------------------ | ---- |  | -------------------------------------------- |  | ----------------------------------- |  | --------------------- |  | --------------------- |  | ------------------------------ |  | --- | 
|RIGHTS ON PERFORMANCE SHARES BOARD OF MANAGEMENT | Year |  | Number of rights on performance
      shares |  | Remaining years in contractual life | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                | 
|                                                 |      |  | Outstanding as at 1 Jan 2006                 |  | Granted during 2006                 |  | Exercised during 2006 |  | Forfeited during 2006 |  | Outstanding as at 31 Dec 20061 |  |    
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Peter Bakker                                     | 2003 |  | 11,795                                       |  |                                     |  | 7,373                 |  | 4,422                 |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2004 |  | 13,015                                       |  |                                     |  |                       |  | 2,169                 |  | 10,846                         |  | 0.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2005 |  | 46,550                                       |  |                                     |  |                       |  |                       |  | 46,550                         |  | 1.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2006 |  |                                              |  | 32,062                              |  |                       |  |                       |  | 32,062                         |  | 2.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Henk van Dalen                                   | 2006 |  |                                              |  | 16,032                              |  |                       |  |                       |  | 16,032                         |  | 2.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Harry Koorstra                                   | 2003 |  | 7,863                                        |  |                                     |  | 4,916                 |  | 2,947                 |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2004 |  | 6,507                                        |  |                                     |  |                       |  | 1,084                 |  | 5,423                          |  | 0.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2005 |  | 23,275                                       |  |                                     |  |                       |  |                       |  | 23,275                         |  | 1.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2006 |  |                                              |  | 16,032                              |  |                       |  |                       |  | 16,032                         |  | 2.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Marie-Christine Lombard                          | 2004 |  | 6,507                                        |  |                                     |  |                       |  | 1,084                 |  | 5,423                          |  | 0.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2005 |  | 23,275                                       |  |                                     |  |                       |  |                       |  | 23,275                         |  | 1.3 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2006 |  |                                              |  | 36,032                              |  |                       |  |                       |  | 36,032                         |  | 2.5 | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Total current members                            |      |  | 138,787                                      |  | 100,158                             |  | 12,289                |  | 11,706                |  | 214,950                        |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Jan Haars                                        | 2003 |  | 7,863                                        |  |                                     |  | 4,916                 |  | 2,947                 |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2004 |  | 6,507                                        |  |                                     |  |                       |  | 6,507                 |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2005 |  | 23,275                                       |  |                                     |  |                       |  | 23,275                |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Dave Kulik                                       | 2004 |  | 6,507                                        |  |                                     |  | 4,971                 |  | 1,536                 |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2005 |  | 23,275                                       |  |                                     |  | 9,698                 |  | 13,577                |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|                                                 | 2006 |  |                                              |  | 16,032                              |  | 1,893                 |  | 14,139                |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Total former members                             |      |  | 67,427                                       |  | 16,032                              |  | 21,478                |  | 61,981                |  |                                |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 
|Total Board of Management                        |      |  | 206,214                                      |  | 116,190                             |  | 33,767                |  | 73,687                |  | 214,950                        |  |     | 
|                                                 |      |  |                                              |  |                                     |  |                       |  |                       |  |                                |  |     | 

|1 | The years 2005 and 2006 are on the basis of 120% of base
      allocation being the maximum number of rights on performance shares
      that can vest under the performance schedule.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The 2006 performance shares grant for Marie-Christine Lombard
    includes an additional one-off grant of 20,000 shares. In 2006 the average price on exercise for performance shares
    for the (former) members of the Board of Management was € 29.01. PensionsPeter Bakker, Harry Koorstra and Henk van Dalen are




participants in a defined benefit scheme, which provides an
  annual benefit of 70% of pensionable salary, assuming 35 years of service. Marie-Christine
  Lombard participates in a defined contribution pension scheme. The pensionable
  age of all members of the Board of Management is 65 year. The accrued benefits
  and the transfer values (for participants in a defined benefit scheme) of the
  members of the Board of Management are as follows:


|                                                                            |                    |  |                          |  |                                          |  |                                                     |  |               |  |                                 |  |                                 |  |                                        
|--------------------------------------------------------------------------- | ------------------ |  | ------------------------ |  | ---------------------------------------- |  | --------------------------------------------------- |  | ------------- |  | ------------------------------- |  | ------------------------------- |  | ---------------------------------------
|BENEFITS AND TRANSFER VALUE DEFINED BENEFIT
      PLANS BOARD OF MANAGEMENT | Age at 31 Dec 2006 |  | Type of pension scheme 1 |  | Defined benefit obligation at 1 Jan 2006 |  | Defined benefit obligation at 31 Dec 2006
        2 |  | Service costs |  | Accrued benefits at 31 Dec 2005 |  | Accrued benefits at 31 Dec 2006 |  | Changes in accrued benefits during 2006
|                                                                            |                    |  |                          |  |                                          |  |                                                     |  |               |  |                                 |  |                                 |  |                                        
|Peter Bakker                                                                | 45                 |  | DB                       |  | 2,606,519                                |  | 2,348,646                                           |  | 121,825       |  | 251,861                         |  | 269,845                         |  | 17,984                                 
|                                                                            |                    |  |                          |  |                                          |  |                                                     |  |               |  |                                 |  |                                 |  |                                        
|Henk van Dalen 3                                                            | 54                 |  | DB                       |  |                                          |  | 531,118                                             |  | 314,968       |  |                                 |  | 42,949                          |  | 42,949                                 
|                                                                            |                    |  |                          |  |                                          |  |                                                     |  |               |  |                                 |  |                                 |  |                                        
|Harry Koorstra                                                              | 55                 |  | DB                       |  | 4,783,845                                |  | 4,138,283                                           |  | 113,725       |  | 310,345                         |  | 321,930                         |  | 11,585                                 
|                                                                            |                    |  |                          |  |                                          |  |                                                     |  |               |  |                                 |  |                                 |  |                                        

|(in €) |                                                                                                                                                                
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|1      | DB = Defined Benefit.                                                                                                                                          
|2      | The defined benefit obligation at 31 Dec 2006 has decreased
      compared to the obligation at 1 Jan 2006 due to an increased interest rate.                  
|3      | The obligation relates to his time in service with TNT
        only. The service costs include the acturial value of the 2006 contribution
        of €337.500.



|
|
|
|

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Back to Contents

|    |                      |   |           
|--- | -------------------- | - | ----------
|143 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   
|



The pension contribution for Marie-Christine Lombard has been
    increased up to €276,000 (2005: €180,000) in order to bring the
    benefit at retirement more in line with the current level of base salary. According to the employment agreement of Henk van Dalen an
  amount of €1,350,000 will be made available to be contributed by the company
  to the Stichting Ondernemingspensioenfonds TPG. This amount will be contributed
  in four equal annual installments and will only become payable to the Stichting
  Ondernemingspensioenfonds TPG under the condition that he is still employed
  by the company on the payment dates. The amount of €314,968 service costs
  shown in the table above, includes one annual installment, actuarially calculated. Performance share plan managementThe performance share scheme is an equity-settled plan with
  annual grants. Participants will be granted a conditional right over a number
  of TNT shares. The number of shares comprised in the share award reflects the
  position that the participant holds and managements assessment of their
  future contribution to the company.




Participants will become owner of the share after a period
    of three years (vesting period). The plan includes market based vesting conditions
    such that the number of shares is dependent on TNTs Total Shareholder
    Return (TSR) performance relative to certain other stock indices. These conditions
    are included in the calculation of the fair value at grant date. This plan
    is similar to the stock option plan as described below with the only difference
    that the exercise price of performance shares is equal to zero. 
    Performance shares were granted in May 2006
      to about 776 TNT managers at a fair value of €18.64. These grants were
      part of the policy of granting rights on performance shares each year to
      eligible members of senior management from 2005 onwards.
    Shares will become unconditional after the
      third anniversary of the grant.
    The participant retains the right to be compensated
      when he/she leaves the company for certain reasons (retirement, certain
      reorganisations, disability or death). The total number of rights on performance shares for management
  granted in 2006 is stated below.


|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |           |  |     | 
|--------------------------------------------- | ---------------------------- |  | -------------------------------------------- |  | ----------------------------------- |  | --------------------- |  | --------------------- |  | ----------------------------- |  | --------- |  | --- | 
|RIGHTS ON PERFORMANCE SHARES
      MANAGEMENT | Year                         |  | Number of rights on performance
      shares |  | Remaining years in contractual life | 
|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |          
|                                              | Outstanding as at 1 Jan 2006 |  | Discontinued operations                      |  | Granted during 2006                 |  | Exercised during 2006 |  | Forfeited during 2006 |  | Outstanding as at 31 Dec 2006 |  |          
|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |           |  |     | 
|Management                                    | 2005                         |  | 1,210,970                                    |  | 366,720                             |  |                       |  | 10,130                |  | 56,590                        |  | 777,530   |  | 1.3 | 
|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |           |  |     | 
|                                              | 2006                         |  |                                              |  |                                     |  | 627,712               |  | 260                   |  | 33,844                        |  | 593,608   |  | 2.3 | 
|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |           |  |     | 
|Total                                         |                              |  | 1,210,970                                    |  | 366,720                             |  | 627,712               |  | 10,390                |  | 90,434                        |  | 1,371,138 |  |     | 
|                                              |                              |  |                                              |  |                                     |  |                       |  |                       |  |                               |  |           |  |     | 



In 2006 the average price on exercise for performance shares
    for the management was €29.92. Option plan managementNo options were granted in 2006. In 2005 the option plan was
  replaced by the performance share scheme. The number of options granted in each of the three years that
  will ultimately be eligible for exercise is dependent on our total shareholder
  return relative to a peer group of direct competitors and a peer group of AEX
  companies. Option rights were granted in accordance with the management
    option plan, which is approved by the Supervisory Board. This plan sets out
    the procedures for share option grants in more than 40 countries around the
    world.The significant aspects of the plan are: 
    options are granted at the average market
      price as traded on the Euronext Amsterdam on the date the grant is made
      (2004:€18.44/share),
    for options granted in 2003 and 2004 the option
      is exercisable between the third and eighth anniversary of the day of grant;
      after eight years the outstanding options are forfeited,





    for options granted prior to 2003 the option
      is exercisable between the third and fifth anniversary of the day of grant;
      after five years the outstanding options are forfeited,
    the option holder retains the right to exercise
      his/her option when he/she leaves the company for certain reasons (retirement,
      certain reorganisations, disability or death), and
    the option holder loses the right to exercise
      his/her option when he/she leaves the company for reasons other than those
      mentioned above. The exercise of options is subject to the TNT Rules concerning
    Inside Information.




|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F
|                                

---



Back to Contents

|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 144
|          



The table below summarises the status of the number of outstanding
  options granted to the Board of Management and




former members of the Board of Management as well as to eligible
  members of senior managers in the current TNT group.


|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|------------------------------------------------- |  | ---------------------------- |  | ----------------------- |  | --------------------- |  | ----------------------------------- |  | ----------------------------- |  | -------------- |  | ---------------------------- |  | ----- |  | ---
|STATEMENT OF CHANGES IN OUTSTANDING
      OPTIONS |  | Year                         |  | Number of options       |  | Amounts in €          |  | Remaining years in contractual life
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              | 
|                                                  |  | Outstanding as of 1 Jan 2006 |  | Discontinued operations |  | Exercised during 2006 |  | Forfeited during 2006               |  | Outstanding as at 31 Dec 2006 |  | Exercise price |  | Share price on exercise date | 
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|Board of Management (incl. former members) 1      |  | various                      |  | 559,250                 |  |                       |  | 202,250                             |  | 198,000                       |  | 159,000        |  |                              |  |       |  |    
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|Management                                        |  | 2001                         |  | 640,251                 |  | 198,000               |  | 366,042                             |  | 76,209                        |  |                |  | 23.66                        |  | 26.08 |  |    
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|                                                  |  | 2002                         |  | 654,043                 |  | 172,318               |  | 415,296                             |  | 14,550                        |  | 51,879         |  | 22.24                        |  | 28.27 |  | 0.1
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|                                                  |  | 2003                         |  | 2,493,600               |  | 622,500               |  | 766,923                             |  | 945,900                       |  | 158,277        |  | 13.85                        |  | 27.84 |  | 4.1
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|                                                  |  | 2003                         |  | 19,500                  |  |                       |  | 13,200                              |  |                               |  | 6,300          |  | 14.51                        |  | 29.76 |  | 4.4
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|                                                  |  | 2004                         |  | 2,929,404               |  | 760,300               |  | 61,401                              |  | 825,167                       |  | 1,282,536      |  | 18.44                        |  | 27.81 |  | 5.3
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    
|Total                                             |  |                              |  | 7,296,048               |  | 1,753,118             |  | 1,825,112                           |  | 2,059,826                     |  | 1,657,992      |  |                              |  |       |  |    
|                                                  |  |                              |  |                         |  |                       |  |                                     |  |                               |  |                |  |                              |  |       |  |    

|1 | The options of the (former) members of the Board of Management
      include the options granted before appointment to the Board of Management.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------



|                                      |                   |   |                                                |  |                   |   |                                                | 
|------------------------------------- | ----------------- | - | ---------------------------------------------- |  | ----------------- | - | ---------------------------------------------- | 
|HISTORIC OVERVIEW OUTSTANDING OPTIONS | 2006              |   | 2005                                           | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|                                      | Number of options |   | Weighted average exercise price (in
        €) |  | Number of options |   | Weighted average exercise price (in
        €) | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Balance at beginning of year          | 7,296,048         |   | 17.63                                          |  | 10,717,990        |   | 19.07                                          | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Discontinued operations               | (1,753,118        | ) | 17.77                                          |  |                   |   |                                                | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Exercised                             | (1,825,112        | ) | 27.37                                          |  | (1,101,545        | ) | 25.09                                          | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Forfeited                             | (2,059,826        | ) | 16.38                                          |  | (2,320,397        | ) | 22.06                                          | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Balance at end of year                | 1,657,992         |   | 18.08                                          |  | 7,296,048         |   | 17.63                                          | 
|                                      |                   |   |                                                |  |                   |   |                                                | 
|Exercisable at 31 December            | 225,456           |   | 15.80                                          |  | 1,446,794         |   | 22.80                                          | 
|                                      |                   |   |                                                |  |                   |   |                                                | 



Statements of changes of outstanding optionsThe table above also includes the outstanding options of the
  members of the Board of Management and former members of the Board of Management.
  All options granted entitle the holder to the allotment of ordinary shares when
  they are exercised and are equity settled. Bonus/matching plan for senior managementMembers of a select group of senior managers are paid 75% of
  their 2003, 2004 and 2005 and 2006 bonus in cash and 25% as a grant of TNT shares
  with an associated matching right in 2006 (67,107), 2005 (121,345), 2004 (107,710)
  and in 2003 (54,405) if at least 50% of the shares are kept for three
  years. We see the bonus/matching plan as part of our remuneration package for
  the members of our top management, and it is particularly aimed at further aligning
  their interests with the interests of the shareholders. The rights on bonus
  and matching shares are granted in accordance with the bonus/matching plan,
  which has been approved by the Supervisory Board. The significant aspects of the plan are: 
    the grant of the right on bonus shares is
      in lieu of 25% of an individuals annual bonus payment, and bonus shares
      are delivered shortly after the right is granted,
    the number of bonus shares is calculated by
      dividing 25% of an individuals gross annual bonus relating to the
      preceding financial year by the weighted average share price on the Euronext
      Amsterdam on the date the grant is made (2006:€ 29.94/share),





    the rights on matching shares are granted
      for zero and the number of shares is equal to the number of bonus shares,
    the matching shares are delivered three years
      after the delivery of the bonus shares. One matching share is delivered
      for each bonus share that has been retained for three years,
    for each bonus share that is sold within three
      years, the associated right to one matching share lapses. If more than 50%
      of the bonus shares are sold within three years, the entire right to matching
      shares lapses with immediate effect,
    where a participant leaves the company for
      certain reasons (retirement, certain reorganisations, disability or death)
      the right to matching shares will vest immediately and he/she can exercise
      his/her right pro rata, and
    a participant loses the right to exercise
      his/her right on matching shares when he/she leaves the company for reasons
      other than those mentioned above, The exercise of the rights on matching shares is subject to
    the TNT rules concerning inside information that apply to our company. All
    awards under this plan are equity settled.




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The table below summarises the status of the number of outstanding
  rights on matching shares granted to senior managers in the current TNT group:







|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|------------------------------------------------- | ---------------------------- |  | ----------------------------------------- |  | ----------------------------------- |  | ---------------------------------- |  | ----------------------------- |  | ------- |  | --- | 
|BONUS CONNECTING MATCHING RIGHTS
      MANAGEMENT | Year                         |  | Number of matching rights on
      shares |  | Remaining years in contractual life | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |        
|                                                  | Outstanding as at 1 Jan 2006 |  | Discontinued operations                   |  | Granted during 2006                 |  | Exercised or forfeited during 2006 |  | Outstanding as at 31 Dec 2006 |  |        
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|Management                                        | 2003                         |  | 44,959                                    |  | 1,374                               |  |                                    |  | 43,585                        |  |         |  |     | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|                                                  | 2004                         |  | 94,786                                    |  | 16,341                              |  |                                    |  | 5,174                         |  | 73,271  |  | 0.3 | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|                                                  | 2005                         |  | 114,304                                   |  | 21,938                              |  |                                    |  | 5,590                         |  | 86,776  |  | 1.3 | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|                                                  | 2006                         |  |                                           |  |                                     |  | 67,107                             |  | 1,211                         |  | 65,896  |  | 2.3 | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|Total                                             |                              |  | 254,049                                   |  | 39,653                              |  | 67,107                             |  | 55,560                        |  | 225,943 |  |     | 
|                                                  |                              |  |                                           |  |                                     |  |                                    |  |                               |  |         |  |     | 
|                                                 



In 2006 the average price on exercise for matching shares for
  the management was €29.36. Fair value assumptions and hedgingOur share based payments have been measured using the Monte
    Carlo fair value measurement method. Significant assumptions used in our calculations
    are as follows: 2006
      
      2005
      
      2004Share price (in €)
      30.05
      
      20.71
      
      18.44Volatility (%)
      20.89
      
      28.35
      
      32.39Vesting period (in years)
      3
      
      3
      
      3Risk free rate (%)
      3.60
      
      2.39
      
      4.09Dividend yield (%)
      2.29
      
      3.13
      
      2.90




As of 4 May 2006, the 2006 grant date the fair value of our
  matching shares awarded was €28.13 and the fair value of our performance
  shares awarded was €18.64. As of 5 May 2005, the 2005 grant date, the fair value of our
    matching shares awarded was €18.62 and the fair value of our performance
    shares awarded was €14.11. As of 27 April 2004, the 2004 grant date,
    the fair value of our options awarded was€4.73,
    of our matching shares was €16.29 and of our performance shares awarded
    was €10.74. We manage our risk in connection with the obligations we have
  under the existing share and option plans by purchasing shares in the market.
  In 2006, we purchased 2,700,000 shares at an average price per share of €29.34.
  In 2005, 2004 and 2003 we purchased no shares for hedging purposes. At 31 December 2006, we held a total of 2,884,441 shares to
  cover share and options schemes (2005: 3,791,438), purchased at a weighted average
  price per share of €26.98 (2005: 22.06).


£20 DEPRECIATION, AMORTISATION AND IMPAIRMENTS:
  318 MILLION (2005: 303; 2004: 296)

Impairment costs for property, plant and equipment of €5
  million (2005: 9; 2004: 11) are included in the depreciation expense.







|                                                          | Year ended at 31 December | 
|--------------------------------------------------------- | ------------------------- | 
|                                                          |                           | 
|                                                          | 2006                      | 
|                                                          |                           | 
|Amortisation and impairment of other intangibles          | 63                        | 
|                                                          |                           | 
|Depreciation and impairment property, plant and equipment | 255                       | 
|                                                          |                           | 
|Total                                                     | 318                       | 
|                                                          |                           | 
|(in € millions)                                           |                           | 

£21OTHER OPERATING EXPENSES: 578 MILLION (2005: 608; 2004: 537)

|The other operating expenses in express in 2006 were €286
      million (2005: 281; 2004: 264) and in mail €291 million (2005: 257;
      2004: 248). The operating expenses per division includes cost for shared
      services cost. The comparative figures for 2005 and 2004 have been adjusted
      to reflect the transfer of Cendris UK from mail to express. |  | Total advertising expenses incurred in 2006
      amounted to €28 million (2005: 15; 2004: 42), €20 million in express
      and €8 million in mail.Included within other operating expenses are costs incurred
        for services provided by our group statutory auditors, PricewaterhouseCoopers
        Accountants N.V.
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The fees for their services can be divided into the following
  categories:

|                   | Year ended at 31 December | 
|------------------ | ------------------------- | 
|                   |                           | 
|                   | 2006                      | 
|                   |                           | 
|Audit fees         | 14                        | 
|                   |                           | 
|Audit related fees | 9                         | 
|                   |                           | 
|Tax advisory fees  | 0                         | 
|                   |                           | 
|Other fees         | 0                         | 
|                   |                           | 
|Total              | 23                        | 
|                   |                           | 
|(in € millions)    |                           | 



Included in the table is approximately €7 million in 2006,
  €4 million in 2005 and €3 million in 2004 related to fees for services
  provided to our discontinued business. Fees for audit services include the audit of TNTs annual
  financial statements, testing of internal controls and the attestation of managements
  assessment on internal controls, as required by the Sarbanes-Oxley Act of 2002,
  the review of interim financial statements, statutory audits, services associated
  with issuing an audit opinion on the postal concession reporting and services
  that only the independent auditor can reasonably provide. Fees for audit related
  services include employee benefit plan audits, due diligence related to mergers
  and acquisitions, internal control reviews, consultation concerning financial
  accounting, transition to IFRS and reporting matters not classified as audit.
  Audit related fees in 2005 also include consultation and review of our controls
  framework related to the Sarbanes-Oxley Act requirements amounting to approximately
  €2 million. Fees for tax services include tax compliance, tax advice, including
  all services performed by the independent auditors professional staff
  in its tax division, except those rendered in connection with the audit. Fees
  for other services include financial risk management reviews and audit of corporate
  sustainability reports.




£22NET FINANCIAL INCOME AND EXPENSES INTEREST AND SIMILAR INCOME: 199 MILLION (2005: 117; 2004:
  100)Interest and similar income of €199 million (2005: 117;
  2004: 100) mainly relates to interest income on banks, loans and deposits of
  €109 million, of which €93 million relates to a gross up of interest
  on cash pools (fully offset by an equal amount in interest expenses), interest
  income on funding our discontinued business (logistics and freight management)
  of €73 million, and hedge income of €15 million relating to outstanding
  hedges. Interest and similar income in 2005 of €117 million mainly
    relates to interest income on funding our discontinued business (logistics
    and freight management) of €74 million, interest of€21
    million relating to an income tax refund, interest income on loans and deposits
    of €12 million and interest income of €6 million relating to outstanding
    hedges. Interest and similar income in 2004 of €100 million mainly
    relates to interest income on funding our discontinued business (logistics
    and freight management) of €67 million, interest income on loans and
    deposits of €12 million, a one-off gain of€11
    million on the unwind of a USD 435 million swap and amortisation of forward
    points of €3 million relating to outstanding hedges.


INTEREST AND SIMILAR EXPENSES: 246 MILLION (2005: 117; 2004:
  116)

|                                              | Year ended at 31 December | 
|--------------------------------------------- | ------------------------- | 
|                                              |                           | 
|                                              | 2006                      | 
|                                              |                           | 
|Interest on longterm borrowings               | 52                        | 
|                                              |                           | 
|Interest added to provisions                  |                           | 
|                                              |                           | 
|Interest on shortterm borrowings              | 117                       | 
|                                              |                           | 
|Foreign currency swaps - fair value hedges    | 31                        | 
|                                              |                           | 
|Net foreign exchange transaction gains/losses |                           | 
|                                              |                           | 
|Other financial expenses                      | 46                        | 
|                                              |                           | 
|Total                                         | 246                       | 
|                                              |                           | 
|(in € millions)                               |                           | 

Interest and similar expense in 2006 of €246 million mainly
    relates to interest expense on bank overdrafts and bank loans of €117
    million, of which €93 million relates to a gross up of interest on cash
    pools (fully offset by an equal amount in interest income), interest expense
    on long term borrowings of€52 million, interest
    on fundings owed to discontinued business (logistics and freight management)
    of €21 million, hedge costs and fair value adjustments on outstanding
    hedges of €31 million and interest expenses on taxes of €21 million.
    Relating to the




interest expenses on taxes an amount of €14 million is
  to be paid as at 31 December 2006. Interest and similar expense in 2005 of €117 million mainly
  relates to interest on long term borrowings of €54 million, interest expense
  on funding from our discontinued business (logistics and freight management)
  of €21 million, hedge costs and fair value adjustments on outstanding hedges
  of €23 million and interest expense on bank overdrafts and bank loans of
  €7 million.


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|147 | FINANCIAL STATEMENTS | | | CHAPTER 12
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|Interest and similar expense in 2004 of €116 million mainly
  relates to interest expenses on long term borrowing of €61 million, interest
  expense on funding from our discontinued logistics business of €18 million,
  amortisation of forward points relating to hedging instruments of €9 million
  and interest expense on bank overdrafts and bank loans of €10 million. |  | £23INCOME TAXES: 395 MILLION (2005: 376; 2004:
        372)
Income taxes in the statements of income of 2006 amount to €395 million (2005: 376; 2004: 372), or 32.3%, (2005:
  32.8%; 2004: 34.1%) of income before income taxes. Of the €395 million,
  €213 million of our total income taxes related to tax authorities outside
  the Netherlands.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                | Year ended at 31 December |  
|--------------------------------------------------------------- | ------------------------- | -
|                                                                |                           |  
|                                                                | 2006                      |  
|                                                                |                           |  
|Dutch statutory income tax rate                                 | 29.6                      |  
|                                                                |                           |  
|Adjustment regarding effective income tax rates other countries | 0.8                       |  
|                                                                |                           |  
|Permanent differences:                                          |                           |  
|                                                                |                           |  
|Non and partly deductible costs                                 | 1.5                       |  
|                                                                |                           |  
|Exempt income                                                   | (0.7                      | )
|                                                                |                           |  
|Other                                                           | 1.1                       |  
|                                                                |                           |  
|Effective income tax rate                                       | 32.3                      |  
|                                                                |                           |  
|(in percentages)                                                |                           |  

|Income taxes differ from the amount calculated by multiplying
  the Dutch statutory corporate income tax rate with the income before income
  taxes. In 2006, the effective income tax rate was 32.3% (2005: 32.8%; 2004:
  34.1%), which is higher than the statutory corporate income tax rate of 29.6%
  in the Netherlands (2005: 31.5%; 2004: 34.5%).The item Other in 2006 was positively impacted
  by 6.3% for the recognition of a tax benefit on the liquidation of the remaining
  relevant entities of our French business. An adverse effect of 4.0% relating
  to prior years was caused by agreements |  | and expected settlements with tax authorities in various tax
  jurisdictions. A further one-off adverse effect of 3.4% relates to the tax effects
  caused by various restructurings. Furthermore, the decrease of the Dutch corporate
  income tax rate to 25.5% in 2007 lead to an improvement of our deferred tax
  position which caused the effective tax rate to decrease by 1.9%. The remaining
  Other, amounting to 1.9%, includes the adverse impact of losses.
Income tax expense consists of the following:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                  | Year ended at 31 December |  
|------------------------------------------------- | ------------------------- | -
|                                                  |                           |  
|                                                  | 2006                      |  
|                                                  |                           |  
|Current tax expense                               | 396                       |  
|                                                  |                           |  
|Changes in deferred taxes                         | (1                        | )
|(excluding acquisitions/foreign exchange effects) |                           |  
|                                                  |                           |  
|Total income taxes                                | 395                       |  
|                                                  |                           |  
|(in € millions)                                   |                           |  

|In 2006, the current tax expense amounted to €396 million
  (2005: 334; 2004: 341). The difference between the total income taxes in the
  statements of income and the current tax expense is due to timing differences.
  These differences are recognised as deferred tax assets or deferred tax liabilities. |  | In 2006 we paid income taxes for an amount of €282 million
  (2005: 125; 2004: 403).
The following table shows the movements in deferred tax assets
  in 2006.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                        |            |  |           |  |         |   |       |   |       |  
|--------------------------------------- | ---------- |  | --------- |  | ------- | - | ----- | - | ----- | -
|                                        | Provisions |  | Property, |  | Losses  |   | Other |   | Total |  
|                                        |            |  | plant and |  | carried |   |       |   |       |  
|                                        |            |  | equipment |  | forward |   |       |   |       |  
|                                        |            |  |           |  |         |   |       |   |       |  
|Deferred tax assets at 31 December 2005 | 18         |  | 6         |  | 71      |   | 93    |   | 188   |  
|                                        |            |  |           |  |         |   |       |   |       |  
|Transfers to assets held for sale       | 0          |  | 0         |  | (1      | ) | (2    | ) | (3    | )
|                                        |            |  |           |  |         |   |       |   |       |  
|Changes credited directly to equity     | 0          |  | 0         |  | 0       |   | 15    |   | 15    |  
|                                        |            |  |           |  |         |   |       |   |       |  
|Other changes                           | 14         |  | 2         |  | (7      | ) | 2     |   | 11    |  
|                                        |            |  |           |  |         |   |       |   |       |  
|Deferred tax assets at 31 December 2006 | 32         |  | 8         |  | 63      |   | 108   |   | 211   |  
|                                        |            |  |           |  |         |   |       |   |       |  
|(in € millions)                         |            |  |           |  |         |   |       |   |       |  

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 148
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Deferred tax assets at 31 December 2006 of €4 million
    related to our discontinued freight management business are included in assets
    held for sale. For deferred tax assets an amount of €14 million is to
  be recovered within 12 months and an amount of €197 million is to be recovered
  after 12 months. Deferred tax assets and liabilities with the same term and
  the same consolidated tax group are presented net in the balance sheet if we
  have a legally enforceable right to offset the recognised amounts. Out of the total other
    deferred tax assets of €108 million (2005: 93; 2004: 104) an amount of
    €61 million (2005: 42; 2004: 45) relates to temporary differences for
    assets that are both capitalised and depreciable for tax purposes only. The total accumulated
    losses available for carry forward at 31 December 2006 amounted to €689
    million (2005: 639; 2004: 602). With these losses carried forward, future
    tax benefits of €221 million could be recognised (2005: 203; 2004: 194).
    Tax deductible losses give rise to deferred tax assets at the statutory rate
    in the relevant country. Deferred tax assets are recognised if it is probable
    that they will be realised. The




probability of the realisation is impacted by uncertainties regarding the utilisation
  of such benefits, for example as a result of the expiry of tax losses carried
  forward and projected future income. As a result we have not recognised €158
  million (2005: 133; 2004: 116) of the potential future tax benefits and have
  recorded deferred tax assets of €63 million at the end of 2006 (2005: 70;
  2004: 78). The expiration of total accumulated losses is presented in
    the table below: 2007
      32008
      112009
      92010
      202011 and thereafter
      224Indefinite
      422Total
      689(in € millions) The following table shows the movements in deferred tax liabilities
  in 2006:


|                                                                             |            |   |                               |  |       |   |       |  
|---------------------------------------------------------------------------- | ---------- | - | ----------------------------- |  | ----- | - | ----- | -
|                                                                             | Provisions |   | Property, plant and equipment |  | Other |   | Total |  
|                                                                             |            |   |                               |  |       |   |       |  
|Deferred tax liabilities at 31 December 2005                                 | 153        |   | 62                            |  | 18    |   | 233   |  
|                                                                             |            |   |                               |  |       |   |       |  
|Transfers to liabilities related to assets classified as
      held for sale | 0          |   | 0                             |  | (2    | ) | (2    | )
|                                                                             |            |   |                               |  |       |   |       |  
|Changes                                                                      | (8         | ) | 3                             |  | 14    |   | 9     |  
|                                                                             |            |   |                               |  |       |   |       |  
|Deferred tax liabilities at 31 December 2006                                 | 145        |   | 65                            |  | 30    |   | 240   |  
|                                                                             |            |   |                               |  |       |   |       |  
|(in € millions)                                                              |            |   |                               |  |       |   |       |  

|Deferred tax liabilities at 31 December 2006 of €6 million
  related to our discontinued freight management business are included in liabilities
  related to assets classified as held for sale.
For deferred tax liabilities an amount of €19 million
  is to be recovered within 12 months and amount of €221 million is to be
  recovered after 12 months. |  | Multinational groups of the size of TNT are exposed to varying
  degrees of uncertainty related to tax planning and regulatory reviews and audits.
  We account for our income taxes on the basis of our own internal analyses, supported
  by external advice. We continually monitor our global tax position, and whenever
  uncertainties arise, we assess the potential consequences and either accrue
  the liability or disclose a contingent liability in our financial statements,
  depending on the strength of our position and the resulting risk of loss.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





NOTES TO THE CONSOLIDATED CASH FLOW
  STATEMENTS

|£24 NET CASH FROM OPERATING ACTIVITIES (CONTINUING
  OPERATIONS): 857 MILLION (2005: 969; 2004: 690)
The net cash from operating activities decreased by €112
  million from €969 million in 2005 to €857 million in 2006. After correction
  of the gross up in 2006 of interest paid by €89 million, due to a new set
  up of our cash pool structure, and fully offset by the same amount of interest
  received, and correction of the repayment of €162 million of taxes in 2005
  relating to previous years, the net cash from operating activities would have
  increased by €139 million compared to 2005. |  | CASH GENERATED FROM OPERATIONSThe increased cash generated from operations reflects an improved
  profit before income taxes of €77 million compared to 2005. In 2006 profit
  before income taxes contributed €1,223 million, and €1,541 million
  if adjusted for the non-cash impact of depreciation, amortisation and impairments,
  an increase of € 92 million or 6.3% compared to 2005 (€1,449
  million).
The changes in pension liabilities of €110 million (2005:
  121; 2004: 256) reflects the total non-cash charges for the defined benefit
  pension schemes of €120 million, lowered by our total
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cash contributions
  of €230 million to various pension funds. The majority of the cash contributions are for our Dutch employees
  who fall under our collective labour agreement. Of the total cash contribution
  an amount of €107 million is for pensions which fall under the transitional
  plan of our Dutch collective labour agreement and which are directly paid by
  TNT (see note 10 to our consolidated financial statements). In total the cash
  contributions are €34 million lower than last year, mainly due to €59
  million lower contributions as prescribed by the minimum funding requirements
  of DNB, and a reduced number of eligible employees. In 2006 the other provisions increased as a consequence
  of a higher provision for claims and indemnities compared to last year of €64
  million. This reflects amongst others the disposal of various businesses. In 2006 the net working capital increased by €90 million
  compared to an increase of €178 million in 2005. The increase is mainly
  a result of organic growth and acquisitions. The movements in net working capital
  cannot be directly reconciled to the balance sheet as a consequence of the treatment
  of the logistics business as a discontinued operation as at the end of 2005
  and the freight management business as at 31 December 2006. INTEREST PAIDThe total cash out flow for interest paid in 2006 is €199
    million. In 2006 interest paid increased by €89 million, due to new cash
    pool structure. This largely explains the variance in interest paid compared
    to 2005. Interest paid also includes interest on our long term borrowings
    of €53 million, interest payments of€25 million
    relating to an increase of short term debt, realised hedge costs on foreign
    exchange hedges of €17 million and interest paid on taxes of €7
    million. Interest and similar expenses in the statements of income amounted
  to €246 million. The difference with the interest paid can be explained
  mainly by interest expense of €21 million relating to our discontinued
  logistics and freight management business (included in financing relating to
  our discontinued operations), an increased accrual for interest related to late
  tax payments of €14 million and interest expenses relating to fair value
  adjustments on hedges of €9 million. TAXES PAIDThe cash outflow of the total tax payments amounted to €282
    million (2005: 125; 2004: 403).The net amount of income taxes paid in 2005
    includes €162 million repayments by the Dutch tax authority of taxes
    over previous years after it was concluded that preliminary payments were
    too high. £25 NET CASH USED IN INVESTING ACTIVITIES (CONTINUING OPERATIONS):
    1,068 MILLION (2005: -262; 2004: -266) ACQUISITION OF GROUP COMPANIES (NET OF CASH)In 2006, the
    total payments net of cash for acquisitions of group companies amounted to
    €89 million. Most acquisitions took place in our express division (€58
    million), the largest being ARC India Private Ltd., India (€32 million),
    TG Plus Transcamer Gomez S.A.U., Spain (€22 million) and ISH Nocni Express,
    Czech Republic (€3 million). Mail acquired for a total




amount of €31 million, mainly related to PostCon Deutschland GmbH, Germany
  (€12 million), CBS City Briefservice GmbH, Germany (€4 million), Mail
  Express GmbH, Germany (€3 million), Ridas Sicherheits- und Handelsgesellschaft
  m.b.H, Germany (€3 million), TWM Italia Srl., Italy (€2 million) and
  Turbo P.O.S.T. GmbH, Germany (€1 million) (we also refer to note 28 of
  our consolidated financial statements). The investments in associated companies primarily related to
  additional capital contributions in Logispring Investment Fund Holding B.V.
  and amounted to €20 million. DISPOSAL OF GROUP COMPANIES AND JOINT VENTURESOn 4 November 2006, we completed the sale of the majority of
    our logistics division to Louis Topco Limited, a company formed and managed
    by Apollo Management International L.P. The proceeds from the transaction
    amount to €1,335 million. Furthermore, the following investments have been sold during
  2006: 
    100% of the outstanding shares in Cendris
      Document Management B.V. (€19 million),
    100% of the outstanding shares in ID Company
      Fashion B.V. (€8 million),
    our 50% shareholding in Mailprofs Employment
      B.V. (€2 million) and
    other disposals of €1 million. CAPITAL EXPENDITURE ON INTANGIBLE ASSETS AND PROPERTY,
    PLANT AND EQUIPMENTIn 2006, net capital expenditures on property, plant and equipment
    amounted to €277 million (2005: 230; 2004: 217). This is excluding the
    purchase of a Boeing 747 of €110 million which is funded by means of
    a finance lease. Of this amount,€200 million (2005:
    140; 2004: 136) related to express, €74 million (2005: 80; 2004: 75)
    to mail and €3 million (2005: 10; 2004: 6) to non-allocated. The capital
    expenditures on intangible assets of €103 million (2005: 80; 2004: 59)
    mostly related to software. In 2006, capital expenditures were funded primarily
    by cash generated from operations. PROCEEDS FROM SALE OF PROPERTY, PLANT AND EQUIPMENT AND
    INTANGIBLE ASSETSProceeds from the sale of property, plant and equipment in
    2006 totaled €65 million (2005: 43; 2004: 14), which mainly related to
    the sale of several buildings from TNT Real Estate B.V. and TNT Real Estate
    Development B.V.(€44 million). In 2005 the proceeds from the sale of
    property, plant and equipment related to several buildings from TNT Real Estate
    B.V. and TNT Real Estate Development B.V. (€23 million) and buildings
    and equipment from the joint venture Postkantoren B.V. (€7 million) in
    the mail segment and equipment in our express operations in the United Kingdom
    (€4 million). Proceeds from the disposal of intangible assets in 2006 amounted
  to €2 million (2005: 2; 2004: 2). INTEREST RECEIVEDIn 2006 interest received amounted to €111 million of
    which€89 million is due to new cash management
    arrangements. This largely explains the variance in interest received compared
    to 2005. Interest received also includes interest on short term deposits and
    bank balances of €12 million and realised hedge income on foreign exchange
    hedges of €6 million.


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|Interest and similar income in the statements of income amounted
  to €199 million. The total cash in flow for interest received is €111
  million. The difference between interest income and interest received can be
  mainly explained by interest income of €73 million relating to our discontinued
  logistics and freight management business (included in financing relating to
  our discontinued operations) and interest income relating to fair value adjustments
  on hedges of €9 million, also not having a cash effect.
      £26NET
        CASH USED IN FINANCING ACTIVITIES (CONTINUING OPERATIONS): -2,152 MILLION
        (2005: -768; 2004: -298)
      REPURCHASES OF SHARESUnder our share buy back programme announced on 6 December
        2005 we purchased 27.8 million of our ordinary shares in 2006 for an amount
        of €769 million, of which €17 million, relating to the ordinary
        shares purchased in the last days of 2005, was paid in 2006. Under our
        share buy back programme announced on 6 November 2006 we purchased for
        an amount of €887 million, 27.6 million of our ordinary shares of
        which 18.2 million from the State of the Netherlands. As at 31 December
        2006, we paid €881 million relating to 27.5 million shares with the
        remainder of the amount being paid in 2007.
In addition to the share buy back programmes we purchased 2.7
  million ordinary shares for an amount of €79 million to cover our obligations
  under the existing management option plans and share grants.
TNT received cash payments of €52 million (2005: 16) for
  the exercise of employee stock options in 2006. The increase results from the
  accelerated vesting of logistics participants and an increase in the number
  of regular exercises. |  | REPAYMENTS TO LONG TERM BORROWINGSThe total repayments relating to long term borrowing of
        €53 million (2005: 2; 2004: 16) related mainly to repayments of bank
        loans. The scheduled payments on aircraft leases and other leases amount
        to €10 million (2005: 4; 2004: 9).
      PROCEEDS FROM AND REPAYMENTS TO SHORT TERM BORROWINGSMovements in short term liabilities resulted in a net cash
        inflow of €166 million (2005 (outflow): 50; 2004: 37). The total
        repayments to short term borrowings mainly relates tot the repayment of
        the bilateral bullet loan agreement maturing in 2006 of €129 million,
        to a decrease of bank overdrafts of €32 million and to repayments
        on short term leases of €4 million (2005: 47, 2004: 0) partly offset
        by a cash inflow relating to short term liabilities of €328 million
        (2005: 14; 2004: 8), of which €287 million relates to our commercial
        paper programme and €41 million to an increase of bank facilities.
      DIVIDENDS PAIDA final cash dividend over 2005, amounting to €173
        million or€0.41 per ordinary share and a cash
        interim dividend for 2006 of €109 million or €0.26 per ordinary
        share were paid in 2006.
FINANCING RELATED TO OUR DISCONTINUED OPERATIONSIn 2006 the net cash flow used in financing our discontinued
        logistics business and freight management amounted to €276 million
        (2005: 21; 2004: -135). This mainly relates to the repayment of €215
        million of the Canadian dollar denominated, syndicated facility that was
        signed in May 2001 before completion of the sale of our logistics business
        to Apollo.
£27 RECONCILIATION TO CASH AND CASH EQUIVALENTS
The following table presents a reconciliation between the cash
  flow statements and the cash and cash equivalents as presented in the balance
  sheet.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                               | Year ended at 31 December |  
|-------------------------------------------------------------- | ------------------------- | -
|                                                               |                           |  
|                                                               | 2006                      |  
|                                                               |                           |  
|Cash at the beginning of the year                              | 663                       |  
|                                                               |                           |  
|Adoption of IAS 32/39 per 1 January 2005 1                     |                           |  
|                                                               |                           |  
|Cash from divested Logistics business                          | (48                       | )
|                                                               |                           |  
|Exchange rate differences                                      | (5                        | )
|                                                               |                           |  
|Total change in cash (as in consolidated cash flow statements) | (284                      | )
|                                                               |                           |  
|Cash at the end of the year                                    | 326                       |  
|                                                               |                           |  
|of which dicontinued business                                  | (29                       | )
|                                                               |                           |  
|Cash at the end of the year as reported                        | 297                       |  
|                                                               |                           |  
|(in € millions, except percentages)                            |                           |  

|1 On adoption of IAS 32 as at 1 January 2005,
      bank overdraft of €46 million was no longer netted off from cash and
      cash equivalents.
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|151 | FINANCIAL STATEMENTS | | | CHAPTER 12
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ADDITIONAL NOTES

|£ | 28 BUSINESS COMBINATIONS
|- | ------------------------

Summary of principal acquisitions in the year 2006

|                                                  |         |                |         |  |             |  |             | 
|------------------------------------------------- | ------- | -------------- | ------- |  | ----------- |  | ----------- | 
|Company name                                      |         |                |         |  | Acquisition |  | Goodwill on | 
|                                                  | Segment | Month acquired | % owner |  | Cost        |  | Acquisition | 
|                                                  |         |                |         |  |             |  |             | 
|TG Plus Transcamer Gomez S.A.U.                   | Express | January        | 100%    |  | 22          |  | 34          | 
|                                                  |         |                |         |  |             |  |             | 
|ARC India Private Ltd.                            | Express | September      | 100%    |  | 33          |  | 23          | 
|                                                  |         |                |         |  |             |  |             | 
|PostCon Deutschland A.G.                          | Mail    | October        | 99%     |  | 22          |  | 17          | 
|                                                  |         |                |         |  |             |  |             | 
|Mail Express GmbH                                 | Mail    | January        | 100%    |  | 6           |  | 6           | 
|                                                  |         |                |         |  |             |  |             | 
|Turbo P.O.S.T. GmbH                               | Mail    | April          | 74%     |  | 4           |  | 4           | 
|                                                  |         |                |         |  |             |  |             | 
|CBS City briefservice GmbH                        | Mail    | April          | 100%    |  | 4           |  | 4           | 
|                                                  |         |                |         |  |             |  |             | 
|Ridas Sicherheits- und Handelsgesellschaft m.b.H. | Mail    | November       | 100%    |  | 3           |  | 3           | 
|                                                  |         |                |         |  |             |  |             | 
|Other acquisitions (including remaining shares)   |         |                |         |  | 16          |  | 8           | 
|                                                  |         |                |         |  |             |  |             | 
|Total                                             |         |                |         |  | 110         |  | 99          | 
|                                                  |         |                |         |  |             |  |             | 
|(in € millions)                                   |         |                |         |  |             |  |             | 

|Additions in 2006 include €99 million (2005: 26)
        of goodwill arising from the acquisition of interests in newly acquired
        group companies and from extending our interests in group companies acquired
        in prior years. Our acquisitions in 2006 have generally centered on addressing
        our long term strategic plans. All acquisition costs paid or to be paid,
        are paid in cash. Of the total acquisition costs an amount of €89
        million is paid in cash in 2006. The acquisition costs shown also include
        an amount of €5 million of acquired cash. Furthermore the acquisition
        cost includes an amount of €16 million to be paid as at 31 December
        2006. This reflects contingent consideration costs, of which PostCon
    Deutschland AG is the main acquisition involved. |  | In respect of the acquisition of PostCon
          Deutschland AG a maximum amount of €5 million is dependent on
          the revenue and earnings before interest and taxes realised in the
          business for each of the years 2006 and 2007.
      The acquisition cost of TG Plus Transcamer Gomez S.A.U.
          of€22 million reflects the agreed enterprise
          value of €49 million less agreed adjustments of €27 million
          relating to loans, financial lease obligations and some smaller items.Loans
          for an amount of €23 million have been repaid by us on the moment
    of acquisition.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The pre-acquisition balance sheet and the opening balance sheet
  of the acquired businesses is summarised in the table below: Pre-acquisition
      
      Acquisitionsbalance sheets(unaudited)Goodwill
      1
      
      99Other non-current assets
      13
      
      45Total non-current assets
      14
      
      144Total current assets
      49
      
      48Total assets
      63
      
      192Equity
      (15
      )
      115Non-current liabilities
      28
      
      27Current liabilities
      50
      
      50Total liabilities and equity
      63
      
      192(in € millions)




Other non-current assets include an amount of approximately€31
    million relating to separately identified intangible assets with respect
to 2006 acquisitions. The largest acquisitions in 2006 relate to ARC India Private
    Limited, TG Plus Transcamer Gomez S.A.U. and PostCon Deutschland AG. On acquisition
    an amount of goodwill was recognised. The main factors that contributed to
    a cost that resulted in the recognition of goodwill are summarized below: 
    TG Plus Transcamer Gomez S.A.U. is the third
      largest industrial parcel operator in Spain and a strategic fit for Express
      Europe.
    Acquiring Arc India Private Ltd. is in line
      with TNTs strategic objective to become the leading provider of express
      deliveries in the emerging markets in Asia, specifically India. We believe
      that combining Arc India Private Ltd. s strong domestic road network
      with TNTs international and domestic networks will form a powerful
      platform for


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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 152
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further expansion in the fast growing Indian
      express market.
    In Germany, one of the key mail markets in
      Europe, we reinforced our position as the number one challenger in the German
      market for delivering addressed mail by the acquisition of PostCon Deutschland
      AG, the market leader in mail consolidation in Germany. Through this acquisition




we now have a solid basis for rapid growth
      once the postal market has been fully liberalised in Germany.The (pre-) acquisition balance
        sheets in ARC India Private Ltd.,TG Plus Transcamer Gomez S.A.U. and PostCon
        Deutschland AG are separately shown below:


|                             |                                 |   |                        |  |                          | 
|---------------------------- | ------------------------------- | - | ---------------------- |  | ------------------------ | 
|BALANCE SHEETS               | TG Plus Transcamer Gomez S.A.U. |   | ARC India Private Ltd. |  | PostCon Deutschland A.G. | 
|                             |                                 |   |                        |  |                          | 
|                             | Pre-acquisition                 |   |                        |  | Pre-acquisition          | 
|                             | (unaudited)                     |   | Acquisition            |  | (unaudited)              | 
|                             |                                 |   |                        |  |                          | 
|Goodwill                     |                                 |   | 34                     |  |                          | 
|                             |                                 |   |                        |  |                          | 
|Other non-current assets     | 3                               |   | 8                      |  | 1                        | 
|                             |                                 |   |                        |  |                          | 
|Total non-current assets     | 3                               |   | 42                     |  | 1                        | 
|                             |                                 |   |                        |  |                          | 
|Total current assets         | 21                              |   | 21                     |  | 7                        | 
|                             |                                 |   |                        |  |                          | 
|Total assets                 | 24                              |   | 63                     |  | 8                        | 
|                             |                                 |   |                        |  |                          | 
|                             |                                 |   |                        |  |                          | 
|                             |                                 |   |                        |  |                          | 
|Equity                       | (22                             | ) | 17                     |  |                          | 
|                             |                                 |   |                        |  |                          | 
|Non-current liabilities      | 24                              |   | 24                     |  | 1                        | 
|                             |                                 |   |                        |  |                          | 
|Current liabilities          | 22                              |   | 22                     |  | 7                        | 
|                             |                                 |   |                        |  |                          | 
|Total liabilities and equity | 24                              |   | 63                     |  | 8                        | 
|                             |                                 |   |                        |  |                          | 
|(in € millions)              |                                 |   |                        |  |                          | 



ACQUIREES RESULTSThe total acquirees result accounted within TNT,
  since acquisition date, amounts to €-14 million. This relates to TG Plus
  Transcamer Gomez S.A.U. for an amount of €-10 million, to Arc India Private
  Limited for an amount of €-2 million, to PostCon Deutschland AG for an
  amount of €1 million and to miscellaneous smaller items for an amount of
  € -3 million.




PRO-FORMA RESULTSThe following represents the pro-forma results of TNT
  for 2006 and 2005 as if these acquisitions had taken place on 1 January 2005.
  These pro-forma results do not necessarily reflect the results that would have
  arisen had these acquisitions actually taken place on 1 January 2005, nor are
  they necessarily indicative of the future performance of TNT. This calculation
  also includes the impact of amortisation of identified intangible assets.


|                                                        | Year ended at 31 December     | 
|------------------------------------------------------- | ----------------------------- | 
|                                                        |                               | 
|                                                        | Pro-forma results (unaudited) | 
|                                                        |                               | 
|                                                        | 2006                          | 
|                                                        |                               | 
|Total group revenues                                    | 10,114                        | 
|                                                        |                               | 
|Profit for the period from continuing operations        | 824                           | 
|                                                        |                               | 
|Profit attributable to the equity holders of the parent | 666                           | 
|                                                        |                               | 
|Earnings per ordinary share (in € cents)                | 158.3                         | 
|                                                        |                               | 
|Earnings per diluted ordinary share (in € cents)        | 157.1                         | 
|                                                        |                               | 
|(in € millions, except per share data)                  |                               | 



£
      29 COMMITMENTS AND CONTINGENCIES(No corresponding financial statement number) At 31 December2006
      
      2005Commitments relating to:Financial guarantees
      211
      
    191Operating guarantees
      137
      
    76Rent and operating lease
      909
      
    1,251Capital expenditure
      150
      
    16Repurchases own shares
      113
      
    769Purchase commitments
      58
      
    100(in € millions)


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|153 | FINANCIAL STATEMENTS | | | CHAPTER 12
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Commitments and contingencies as at 31 December 2005 related
  to our discontinued logistics business amounts to €706 million. The total
  guarantees of freight management as at 31 December 2006 amounted to €32
  million, of which €12 million related to corporate guarantees and €20
  million to bank guarantees. All the guarantees of the discontinued freight management
  business were financial guarantees. Of the total commitments indicated above, €662 million
  are of a short term nature (2005: 1,128). FINANCIAL AND OPERATING GUARANTEESTotal
    guarantees at 31 December 2006 were €348 million
  (2005: 267). Of these guarantees, TNT issued corporate guarantees up to the
  amount of €183 million (2005: 99). Banks and other financial institutions
  issued guarantees up to the amount of €165 million (2005: 147). The obligations
  under the bank guarantees have been secured by our company or its subsidiaries. Of the amount of €348 million, financial guarantees amounted
  to €211 million (2005: 191) and were mainly issued in connection with our
  obligations under lease contracts, custom duty deferment, airline cargo services,
  credit lines and insurance contracts. Operating guarantees amounted to €137
  million (2005: 76) and were mainly issued in connection with mailing and other
  service performance contracts. RENT AND OPERATING LEASE CONTRACTSIn
    2006 operational lease expenses (including rental) in the consolidated statements
    of income amounted to €375 million (2005: 380;
  2004: 304). Future payments on non-cancellable existing lease contracts mainly
  relating to real estate, computer equipment and other equipment were as follows: At 31 DecemberPAYABLE IN THE PERIOD
      2006
      
      2005Less than 1 year
      222
      
      229Between 1 and 2 years
      199
      
      210Between 2 and 3 years
      146
      
      182Between 3 and 4 years
      102
      
      140Between 4 and 5 years
      65
      
      105Thereafter
      175
      
      385Total
      909
      
      1,251of which guaranteed by a third
      
      
      3party/customers(in € millions) CAPITAL EXPENDITURECommitments
    in connection with capital expenditure are €150
  million (2005: 16; 2004: 33), of which €148 million is related to property,
  plant and equipment including €110 million which is related to aircraft
  and €2 million related to intangible assets. These commitments primarily
  related to projects within the operations of the express division. REPURCHASE OF SHARESUnder the €1,000 million repurchase programme, announced
  on 6 November 2006 (also refer to note 9) we purchased shares for a total amount
  of €113 million after 31 December




2006. As at 23 January 2007, we have completed the repurchase
  programme. PURCHASE COMMITMENTSAt 31 December
    2006 we had unconditional purchase commitments of €58 million (2005:
    100; 2004: 84) which were primarily related to various service and maintenance
    contracts. These contracts for service and maintenance
  relate primarily to information technology, security, salary registration,
    cleaning and aircraft. CONTINGENT TAX LIABILITIESMultinational groups the size of TNT are exposed to varying
  degrees of uncertainty related to tax planning and regulatory reviews and audits.
  We account for our income taxes on the basis of our own internal analyses, supported
  by external advice. We continually monitor our global tax position, and whenever
  uncertainties arise, we assess the potential consequences and either accrue
  the liability or disclose a contingent liability in our financial statements,
  depending on the strength of our position and the resulting risk of loss. In 2006, TNT continued to investigate and analyse its global
  tax position As a result we currently estimate a range of €100 -€250
  million to reflect the realistic range of our total contingent liability in
  this regard. In early 2004 our audit committee, on behalf of our Supervisory
  Board, conducted an independent investigation regarding representations made
  to the UK tax authorities and to our independent auditors, PricewaterhouseCoopers,
  with respect to certain UK tax matters originally arising in the late 1990s
  relating to one of our UK subsidiaries. In August 2004 we submitted a report
  to the UK tax authorities pursuant to a procedure under UK law designed to ensure
  full disclosure of all relevant information to the UK tax authorities. In the
  first quarter of 2005 we reached a settlement with the UK tax authorities in
  relation to those matters without any further negative impact on our tax position
  in 2005. As previously disclosed, since August 2004, we have been preparing
  an addendum to our original report to the UK tax authorities that cover UK tax
  matters that were not the subject of the original investigation. In 2006 we
  submitted a substantially advanced draft of available information and related
  tax conclusions required by the UK tax authorities and started discussions with
  them on these tax matters. The major issue being discussed with the UK tax authorities
    concerns whether some of our non-UK subsidiaries might have been resident
    in the United Kingdom prior to the acquisition of TNT Limited in December
    1996 and, if so, whether capital gains tax would have been due if the tax
    residency of those subsidiaries later moved to another European country.After having investigated the matter we are of the opinion
    that the relevant subsidiaries were never UK resident But even if they were
    seen to be UK resident, we believe that the imposition of such a capital gains
    tax would be impermissibly discriminatory under EU law. Our opinion has been
    and is supported by strong external specialist advice. We have been in discussion with the UK tax authority to come
  to an agreement on these issues. While to date no assessments relating to the
  item under discussion have been raised, the UK


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|tax authority will issue initial assessments, as we
        understand it, as a matter of procedure, before they and we can effectively
        continue to seek an agreed solution. TNT will appeal against the initial
        assessments. The amounts raised in such initial assessments could exceed
        the realistic range of our estimated total contingent liability as disclosed
        above. It is customary in the UK with respect to such initial assessments
        that the actual obligation for payment will be deferred during the litigation
        and appeal period until either an agreement is reached or a final assessment
        is raised. On the basis of our ongoing discussions with the UK tax authorities
        and the strength of our position, we currently expect either these matters
        to be settled in 2007 or if necessary litigation to be commenced.
      In late 2005 and early 2006 our audit committee conducted
        an independent investigation with respect to whether illegal acts occurred
        in connection with certain past tax matters. Although the investigation
        concluded that such acts had occurred, it was determined in February 2006
        that no provision or contingent liability was required as a result of
        this investigation.
      We have also analysed the tax positions of some of our
        subsidiaries with respect to other countries. Our investigations and analyses
        concerned, among other things, the substance and implementation of tax
        structures set up in connection with the acquisition, in December 1996
        (prior to our formation in 1998), by our former parent company of the
        Australian company TNT Limited through a UK subsidiary, and the integration
        and structuring of those and related businesses after our demerger in
        1998. In early 2006 we actively discussed these structures with the relevant
        tax authorities and have reached an agreement on these matters.
      As part of a pilot publicly announced by the Dutch Ministry
        of Finance, we signed a compliance covenant with the Dutch tax authorities
        in early 2006 to self-assess and transparently discuss our past, present
        and future tax issues with the Dutch tax authorities. The Dutch tax authorities
        have agreed, in turn, to take a clear position on such issues swiftly.
        In 2006 all relevant past matters presented and discussed have been concluded
        upon by the Dutch tax authorities and agreed with us.
      We have fully accrued the expected cost in our financial
        statements for 2006 of all of the matters described above, whether agreed
        or expected to be agreed. From the extensive review to date of our global
        tax position, on the basis of the facts and circumstances as currently
        known, the advice received from external advisors and the discussions
        we have had with various tax authorities some of which are still ongoing,
        we currently believe that it is unlikely that we will incur an additional
        liability beyond what we have accrued to date. Our interpretation of past
        facts and circumstances and relevant tax laws and regulations may be open
        to challenge or as stated above lead to tax assessments being raised.
        In addition it is not certain that litigation can be avoided in all cases.
        However, our positions have been and are supported by strong external
        specialist advice, both contemporaneous and present, on the basis of which
        we have reached our estimates.
      We currently believe that it is unlikely that we will
        incur an additional liability related to the above matters beyond what
        we have accrued to date. |  | We disclosed in our 2005 annual report an
        estimate of a realistic range to reflect our total contingent liability,
        including potential penalties and interest, of €150 - €550 million,
        based on a probability-weighted assessment of our estimated total theoretical
        liability. In April 2006 we disclosed that we reduced the range to €100
        - €250 million which we continue to believe to be the realistic range
        to reflect our contingent liability. This range represents some 25-30%
        of the non-probability weighted estimated theoretical maximum liability
        - in the highly unrealistic scenario where all of our tax positions under
        investigation or analysis were successfully challenged, any expected initial
        assessments were unsuccessfully challenged by us, we and all relevant
        tax authorities were unable to reach any settlement whatsoever, and all
        of our positions were rejected by all relevant courts. We believe this
        is highly unlikely.
      Our estimate involves a series of complex judgments about
        past and future events and relies on estimates and assumptions. Although
        we believe that the estimates and assumptions supporting our positions
        are reasonable and are supported by external advice, our ultimate liability
        in connection with these matters will depend upon the assessments raised,
        the result of any negotiations with the relevant tax authorities and the
        outcome of any related litigation.If the actual taxes, penalties and interest imposed exceed
        the amounts we have accrued, it could adversely affect our financial position,
        results and cash flows.
      CONTINGENT LEGAL LIABILITIESOrdinary course litigationWe are involved in several legal proceedings
        relating to the normal conduct of our business. We do not expect any liability
        arising from any of these legal proceedings to have a material effect
        on our results of operations, liquidity, capital resources or financial
        position. We believe we have provided for all probable liabilities deriving
        from the normal course of business.
      Subcontractor suits in FranceOver the years, the authorities in France have
        brought several criminal and civil actions relating to our express divisions
        French operations alleging that our subcontractors or their employees
        should be regarded as our own unregistered employees. The actions variously
        seek criminal fines or the payment of social security contributions, wage
        taxes and overtime payments in respect of such employees. Similar actions
        have been brought against our competitors.
      Of the cases on which we reported in our annual report
        in 2006, the case that pertains to fines imposed on TNT Express International
        SNC and its regional operations director under a ruling by the Court of
        Appeal in Paris has not yet been concluded. Following a rejection of our
        request by the French Supreme Court, we have brought this matter to the
        attention of the European Court of Human Rights. We obtained discharges
        of the other cases relating to subcontractors previously reported.
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|Liège court caseIn
          Belgium, judicial proceedings were launched by people living around
          Liege airport to stop night flights and seek indemnification
          from the Walloon Region, Liege airport and its operators (including
          TNT). On 29 June 2004 the Liege court of appeal rejected the plaintiffs claims
          on the basis of a substantiated legal reasoning. Thereupon, the plaintiffs
          lodged an appeal with the Belgian Supreme Court, which court may only
          examine pure points of law or procedural items. It does not examine
          facts. On 14 December 2006, the Supreme Court decided to postpone its
          rendering of a decision, and filed two pre-judicial questions with
          the European Court of Justice (ECJ). As a result, it may now take another
          two to three years before the outcome of the proceedings before the
          Supreme Court is known. Should the Supreme Court ultimately decide
          to cancel the 2004 judgement, the matter will be referred to another
          Belgian Court of Appeal for a new exchange of briefs, pleadings and
    ruling. |  | £ 30EARNINGS
          PER SHARE(No corresponding financial statement number)
      To compute diluted earnings per share, the average number
          of shares outstanding (excluding the special share) is adjusted for
          the number of all potentially dilutive shares. At 31 December 2006
          we had potential obligations under stock option and share grants to
          deliver 4,553,308 shares (2005: 9,023,090; 2004: 10,080,990). There
          was no difference in the income attributable to shareholders in computing
          our basic and diluted earnings per share.
      For calculating basic earnings per share, an average
          420,701,641 ordinary shares is taken into account. For calculating
          diluted earnings per share an additional average number of 3,157,581
          shares is to be taken into account.
      The following table summarises our computation related
    to earnings per share and diluted earnings per share:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                    | Year averages and numbers at 31
      December | 
|----------------------------------------------------------------------------------- | ---------------------------------------------- | 
|                                                                                    |                                                | 
|                                                                                    | 2006                                           | 
|                                                                                    |                                                | 
|Number of issued and outstanding ordinary shares                                    | 422,767,600                                    | 
|                                                                                    |                                                | 
|Shares held by the company to cover share plans                                     | 2,884,441                                      | 
|                                                                                    |                                                | 
|Shares held by the company for cancellation                                         | 27,640,543                                     | 
|                                                                                    |                                                | 
|                                                                                    |                                                | 
|                                                                                    |                                                | 
|Average number of ordinary shares per year                                          | 420,701,641                                    | 
|                                                                                    |                                                | 
|Diluted number of ordinary shares per year                                          | 3,157,581                                      | 
|                                                                                    |                                                | 
|Average number of ordinary shares per year on fully
      diluted basis in the year | 423,859,222                                    | 
|                                                                                    |                                                | 



|£ 31JOINT
          VENTURES                                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(No corresponding financial statement number)
      We account for joint ventures in which we and another
          party have equal control according to the proportionate consolidation
    method. Our only significant joint venture as at |  | 31 December 2006 is the 50% interest in Postkantoren
        B.V. with Postbank N.V. to operate post offices in the Netherlands. Key
        pro rata information regarding all of our joint ventures in which we
        have joint decisive influence over operations is set forth below and
    includes balances at 50%:

|                                          | Year ended at 31 December |  
|----------------------------------------- | ------------------------- | -
|                                          |                           |  
|                                          | 2006                      |  
|                                          |                           |  
|Non-current assets                        | 54                        |  
|                                          |                           |  
|Current assets                            | 182                       |  
|                                          |                           |  
|                                          |                           |  
|                                          |                           |  
|Equity                                    | 56                        |  
|                                          |                           |  
|Non-current liabilities                   | 95                        |  
|                                          |                           |  
|Current liabilities                       | 85                        |  
|                                          |                           |  
|                                          |                           |  
|                                          |                           |  
|Net sales                                 | 395                       |  
|                                          |                           |  
|Operating income                          | 18                        |  
|                                          |                           |  
|Profit attributable to the shareholders   | 10                        |  
|                                          |                           |  
|                                          |                           |  
|                                          |                           |  
|Net cash provided by operating activities | 22                        |  
|                                          |                           |  
|Net cash used in investing activities     | (8                        | )
|                                          |                           |  
|Net cash used in financing activities     | (14                       | )
|                                          |                           |  
|Changes in cash and cash equivalents      | 0                         |  
|                                          |                           |  
|(in € millions)                           |                           |  

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 156
|---------- | - | -------------------- | ---
|          

£ 32RELATED
    PARTY TRANSACTIONS WITH THE STATE OF THE NETHERLANDS(No corresponding financial statement
    number) THE STATE OF THE NETHERLANDS AS SHAREHOLDEROver the years 2004  2006 the State of the Netherlands
    reduced its holding in TNT step by step to nil.On 29 September 2004, the State of the Netherlands sold a total
    of 77.7 million ordinary shares in our company reducing its ownership from
    34.8% to 18.6% of the then outstanding share capital. We repurchased 20.7
    million of these shares. Transfer of the repurchased ordinary shares took
    place in two tranches. A first tranche of 7.6 million ordinary shares was
    transferred to us on 4 October 2004. The transfer of the remaining 13.1 million
    ordinary shares was completed on 5 January 2005.On 11 July 2005, the State of the Netherlands sold a further
    43.3 million ordinary shares in a private placement to ABN Amro Holding and
    Citigroup reducing its holding to approximately 10% of the share capital outstanding
    at the time. On 20 November 2006 the State of the Netherlands sold its remaining
    shares in TNT. 27.8 million ordinary shares were acquired by Citibank and
    UBS, and 18.2 million ordinary shares were repurchased by TNT. SPECIAL SHAREUntil 17 November 2006, the State of the Netherlands held
      the one special share in our company. It gave the State of the Netherlands
      the right to approve decisions that lead to fundamental changes in our
      group structure,
including:
    issuing shares in our capital,
    restrictions on or exclusions of the preemptive
      rights of holders of our ordinary shares,
    mergers, demergers and dissolutions with respect
      to us and Royal TNT Post B.V.,
    certain capital expenditures,
    certain dividends and distributions, and
    certain amendments to our articles of association
      and the articles of association of Royal TNT Post B.V. The State of the Netherlands had committed itself to exercising
    the rights attached to the special share only to safeguard the general interest
    in having an efficient operating postal system in the Netherlands and also
    to protect its financial interest as a shareholder. Further restrictions to
    exercising the rights attached to the special share and to transferring or
    encumbering the special share applied.On 28 September 2006 the European Court of Justice ruled that
    ownership by the State of the Netherlands of the special share is in contravention
    of EU law.On 17 November 2006, the special share was transferred for
    free to TNT. As per that date, the special control rights attached to this
    share reverted to the company. At our next Annual General Meeting of Shareholders
    we will propose to convert the special share into an ordinary share as part
    of an amendment to our articles of association. As a result the rights attached
    to the special share will terminate at such time as the amendment to articles
    is effected. We agreed not to exercise the rights attached to the Special
    Share or sell the Special Share in the interim period. THE STATE OF THE NETHERLANDS AS CUSTOMERThe
    State of the Netherlands is a large customer of ours, purchasing services
from us on an arms-length basis. In




addition, the State of the Netherlands may by law require us
    to provide certain services to the State of the Netherlands in connection
    with
    national security and the detection of crime. These activities are subject
    to strict legal scrutiny by the Dutch authorities. THE STATE OF THE NETHERLANDS AS REGULATORThe postal system in the Netherlands is regulated by the State
of the Netherlands. See note 37 of our financial statements. £ 33OTHER
        RELATED PARTY TRANSACTIONS AND BALANCES(No corresponding financial statement
        number) The TNT group companies have trading relationships with a number
  of joint ventures as well as with unconsolidated companies in which we hold
  minority shares. In some cases there are contractual arrangements in place under
  which TNT companies source supplies from such undertakings, or such undertakings
  source supplies from TNT. During 2006, sales made by TNT companies to its joint ventures
  amounted to €8 million (2005: 42; 2004: 24). Purchases of TNT from joint
  ventures amounted to €103 million (2005: 131; 2004: 125). The net amounts
  due to our joint venture entities amounted to €58 million (2005: 49; 2004:
  49). As at 31 December 2006, no material amounts were payable by TNT to associated
  companies. All transactions with joint ventures and investments in associates
  are conducted in the normal course of business and under arms length commercial
  terms and conditions. £ 34SEGMENT INFORMATION(No corresponding financial statement
        number) The presentation of specific data from the
        consolidated financial statements is classified by divisions and geography.
        The primary reporting format is based on the corporate divisions. TNT
    distinguishes between the following corporate divisions:
    Express business.The express business
      provides demand door-to-door express delivery services for customers sending
      documents, parcels and freight.
    Mail business.The mail business provides
      services for collecting, sorting, transporting and distributing domestic
      and international mail. In 2006 and 2005 the decision was taken to respectively divest
  the freight management business and the logistics business. As a consequence
  the discontinued business was not included in the segment information shown. The pricing of intercompany sales is done at arms length. The secondary reporting format is based
    on geography:
    The basis of allocation of net sales by geographical
      areas is the country or region in which the entity recording the sales is
      located.
    Segment assets and investments are allocated
      to the location of the assets, except for TNT goodwill which is not allocated
      to other countries or regions.


|
|
|

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|157 | FINANCIAL STATEMENTS | | | CHAPTER 12
|--- | -------------------- | - | ----------
|   

PRIMARY SEGMENTATION - RESULTS

|                                                            | Year ended at
      31 December 2006 |  
|----------------------------------------------------------- | ------------------------------------ | -
|                                                            |                                      |  
|                                                            | Express                              |  
|                                                            |                                      |  
|Net sales                                                   | 5,922                                |  
|                                                            |                                      |  
|Inter-company sales                                         | 9                                    |  
|                                                            |                                      |  
|Other operating revenues                                    | 80                                   |  
|                                                            |                                      |  
|Total operating revenues                                    | 6,011                                |  
|                                                            |                                      |  
|Other income                                                | 6                                    |  
|                                                            |                                      |  
|Depreciation/impairment property,
      plant and equipment | (142                                 | )
|                                                            |                                      |  
|Amortisation/impairment intangibles                         | (34                                  | )
|                                                            |                                      |  
|Total operating income                                      | 580                                  |  
|                                                            |                                      |  
|Net financial income/(expense)                              |                                      |  
|                                                            |                                      |  
|Results from investments in
      associates                |                                      |  
|                                                            |                                      |  
|Income tax                                                  |                                      |  
|                                                            |                                      |  
|Profit/(loss) from discontinued
      operations            |                                      |  
|                                                            |                                      |  
|Profit for the year                                         |                                      |  
|                                                            |                                      |  
|Attributable to:                                            |                                      |  
|                                                            |                                      |  
|Minority interests                                          |                                      |  
|                                                            |                                      |  
|Equity holders of the parent                                |                                      |  
|                                                            |                                      |  
|                                                            |                                      |  
|                                                            |                                      |  
|Number of employees                                         | 54,060                               |  
|                                                            |                                      |  
|(in € millions, except
      employees)                     |                                      |  



|                                                                                                                                                     | Year ended at
      31 December 2005 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -
|                                                                                                                                                     |                                      |  
|                                                                                                                                                     | Express 1                            |  
|                                                                                                                                                     |                                      |  
|Net sales                                                                                                                                            | 5,324                                |  
|                                                                                                                                                     |                                      |  
|Inter-company sales                                                                                                                                  | 9                                    |  
|                                                                                                                                                     |                                      |  
|Other operating revenues                                                                                                                             | 30                                   |  
|                                                                                                                                                     |                                      |  
|Total operating revenues                                                                                                                             | 5,363                                |  
|                                                                                                                                                     |                                      |  
|Other income                                                                                                                                         |                                      |  
|                                                                                                                                                     |                                      |  
|Depreciation/impairment property,
      plant and equipment                                                                                          | (139                                 | )
|                                                                                                                                                     |                                      |  
|Amortisation/impairment intangibles                                                                                                                  | (31                                  | )
|                                                                                                                                                     |                                      |  
|Total operating income                                                                                                                               | 476                                  |  
|                                                                                                                                                     |                                      |  
|Net financial income/(expense)                                                                                                                       |                                      |  
|                                                                                                                                                     |                                      |  
|Results from investments in
      associates                                                                                                         |                                      |  
|                                                                                                                                                     |                                      |  
|Income tax                                                                                                                                           |                                      |  
|                                                                                                                                                     |                                      |  
|Profit/(loss) from discontinued
      operations                                                                                                     |                                      |  
|                                                                                                                                                     |                                      |  
|Profit for the year                                                                                                                                  |                                      |  
|                                                                                                                                                     |                                      |  
|Attributable to:                                                                                                                                     |                                      |  
|                                                                                                                                                     |                                      |  
|Minority interests                                                                                                                                   |                                      |  
|                                                                                                                                                     |                                      |  
|Equity holders of the parent                                                                                                                         |                                      |  
|                                                                                                                                                     |                                      |  
|                                                                                                                                                     |                                      |  
|                                                                                                                                                     |                                      |  
|Number of employees                                                                                                                                  | 48,845                               |  
|                                                                                                                                                     |                                      |  
|(in € millions,
      except employees)
      1 Figures have been adjusted to reflect the transfer of Cendris UK from
      mail to express in 2006. |                                      |  
|                                                                                                                                                     |                                      |  

|                                
|--------------------------------
|2006 ANNUAL REPORT AND FORM 20-F

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 158
|---------- | - | -------------------- | ---
|          

|                                                                                                       | Year ended at 31 December 2004 |  
|------------------------------------------------------------------------------------------------------ | ------------------------------ | -
|                                                                                                       |                                |  
|                                                                                                       | Express 1                      |  
|                                                                                                       |                                |  
|Net sales                                                                                              | 4.933                          |  
|                                                                                                       |                                |  
|Inter-company sales                                                                                    | 6                              |  
|                                                                                                       |                                |  
|Other operating revenues                                                                               | 24                             |  
|                                                                                                       |                                |  
|Total operating revenues                                                                               | 4.963                          |  
|                                                                                                       |                                |  
|Other income                                                                                           |                                |  
|                                                                                                       |                                |  
|Depreciation/impairment property, plant and equipment                                                  | (136                           | )
|                                                                                                       |                                |  
|Amortisation/impairment intangibles                                                                    | (29                            | )
|                                                                                                       |                                |  
|Total operating income                                                                                 | 378                            |  
|                                                                                                       |                                |  
|Net financial income/(expense)                                                                         |                                |  
|                                                                                                       |                                |  
|Results from investments in associates                                                                 |                                |  
|                                                                                                       |                                |  
|Income tax                                                                                             |                                |  
|                                                                                                       |                                |  
|Profit/(loss) from discontinued operations                                                             |                                |  
|                                                                                                       |                                |  
|Profit for the year                                                                                    |                                |  
|                                                                                                       |                                |  
|Attributable to:                                                                                       |                                |  
|                                                                                                       |                                |  
|Minority interests                                                                                     |                                |  
|                                                                                                       |                                |  
|Equity holders of the parent                                                                           |                                |  
|                                                                                                       |                                |  
|                                                                                                       |                                |  
|Number of employees                                                                                    | 46.502                         |  
|                                                                                                       |                                |  
|(in € millions, except employees)                                                                      |                                |  
|1 Figures have been adjusted to reflect
      the transfer of Cendris UK from mail to express in 2006. |                               



|                               | Year ended at 31 December |  
|------------------------------ | ------------------------- | -
|                               |                           |  
|NON-ALLOCATED OPERATING INCOME | 2006                      |  
|                               |                           |  
|Non-core disposals             |                           |  
|                               |                           |  
|Business initiatives           | (27                       | )
|                               |                           |  
|World Food Programme           | (8                        | )
|                               |                           |  
|Other costs                    | (30                       | )
|                               |                           |  
|Total                          | (65                       | )
|                               |                           |  
|(in € millions)                |                           |  



|2006/2005In
          2006, non-allocated operating costs amounted to €65
        million (2005:103). Included in these costs is €27 million (2005:
        61) for business initiatives, of which €25 million (2005: 33) relates
        to the continuing development of our activities in China. As a result
        of maturing operations, more employees were allocated to the respective
        express and mail businesses. As a result, the average number of full-time
        equivalents employed for the development initiatives decreased from 485
        at the end of 2005 to 201 at year end 2006. The remaining costs for the
        business initiatives decreased from €28 million in 2005 to €2
        million in 2006. This reduction is a result of lower costs for the rebranding
        of non TNT branded companies into TNT brand and the allocation of costs
        for a procurement initiative and a cost efficiency project for lean warehousing
        to the respective operations. Costs made to support the World Food Programme
        were €8 million (2005: 9), including costs for knowledge transfer,
        hands-on support, raising awareness and funds for the World Food Programme
        and cash donations. The other costs were €30 million (2005: 45),
    which represent a |  | decrease of €15 million compared to 2005. This decrease
        mainly relates to higher costs in 2005 as a consequence of the self insured
        part of the damage caused by major fires in three different warehouses
        in the United States, Spain and the United Kingdom and employer liability
        in the United Kingdom.Furthermore, the costs for
        tax investigations decreased from€ 23
        million in 2005 to € 21 million in 2006.
      2005/2004In 2005, non-allocated operating income amounted to a loss
        of€103 million (2004: 71). Included in these
        costs is €61 million (2004: 38) for business initiatives of which
        €33 million (2004: 20) was used to further develop our operations
        in China. During 2005 we strengthened the TNT China corporate headoffice,
        we started our domestic parcel express business, which included 75 depots
        at the end of the year and we launched our direct mail activities. The
        average number of full-time equivalents employed for this initiative was
        485 at year end 2005. The remaining €28 million (2004: 18) of the
        business initiatives was used for several other strategic projects,
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|159 | FINANCIAL STATEMENTS | | | CHAPTER 12
|--- | -------------------- | - | ----------
|   

|including the aim to build alliances with
        other organisations and postal operators, rebranding costs of non TNT
        branded organisations into the TNT brand and a cost efficiency project
        for lean warehousing. Costs made to support the World Food Programme
        were €9 million (2004: 9), including costs for knowledge transfer,
        hands-on support, raising awareness and funds for the World Food Programme
        and cash donations. The other costs were €45 million (2004: 24),
        which represent an increase of €21 million compared to 2004. This
    increase mainly related to costs incurred for tax investigations, which |  | amounted to €23 million compared to €13
        million in 2004 and to costs for the self insured part of the damage
        caused by major fires in three different warehouses in the United States,
        Spain and the United Kingdom and employer liability in the United Kingdom.
        These costs were partly offset by the gain on the sale of Global Collect
    B.V. (€12 million).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



PRIMARY SEGMENTATION  BALANCE SHEET INFORMATION

|                                                     |         |  |       |  | At 31 December 2006 | 
|---------------------------------------------------- | ------- |  | ----- |  | ------------------- | 
|                                                     |         |  |       |  |                     | 
|                                                     | Express |  | Mail  |  | Non-allocated       | 
|                                                     |         |  |       |  |                     | 
|Goodwill paid in the year                            | 58      |  | 41    |  |                     | 
|                                                     |         |  |       |  |                     | 
|Intangible assets                                    | 1,480   |  | 301   |  | 4                   | 
|                                                     |         |  |       |  |                     | 
|Capital expenditure on property, plant and equipment | 329     |  | 84    |  | 4                   | 
|                                                     |         |  |       |  |                     | 
|Property, plant and equipment                        | 1,015   |  | 651   |  | 12                  | 
|                                                     |         |  |       |  |                     | 
|Investments in associates                            | 1       |  | 1     |  | 56                  | 
|                                                     |         |  |       |  |                     | 
|Accounts receivable                                  | 1,025   |  | 415   |  | 121                 | 
|                                                     |         |  |       |  |                     | 
|Total assets 1                                       | 4,006   |  | 1,611 |  | 691                 | 
|                                                     |         |  |       |  |                     | 
|Total liabilities 2                                  | 1,388   |  | 1,380 |  | 1,532               | 
|                                                     |         |  |       |  |                     | 

|(in € millions)
|---------------
|1              
|2              



The balance sheet information at 31 December 2005 is as follows:

|                                                     |           |  |        |  |                    |  | At 31 December 2005 | 
|---------------------------------------------------- | --------- |  | ------ |  | ------------------ |  | ------------------- | 
|                                                     |           |  |        |  |                    |  |                     | 
|                                                     | Express 1 |  | Mail 1 |  | Freight Management |  | Non-allocated       | 
|                                                     |           |  |        |  |                    |  |                     | 
|Goodwill paid in the year                            | 5         |  | 21     |  |                    |  |                     | 
|                                                     |           |  |        |  |                    |  |                     | 
|Intangible assets                                    | 1,358     |  | 264    |  | 213                |  | 3                   | 
|                                                     |           |  |        |  |                    |  |                     | 
|Capital expenditure on property, plant and equipment | 140       |  | 80     |  | 3                  |  | 10                  | 
|                                                     |           |  |        |  |                    |  |                     | 
|Property, plant and equipment                        | 832       |  | 695    |  | 9                  |  | 16                  | 
|                                                     |           |  |        |  |                    |  |                     | 
|Investments in associates                            |           |  |        |  | 3                  |  | 44                  | 
|                                                     |           |  |        |  |                    |  |                     | 
|Accounts receivable                                  | 935       |  | 383    |  | 127                |  | 26                  | 
|                                                     |           |  |        |  |                    |  |                     | 
|Total assets 2                                       | 3,513     |  | 2,099  |  | 406                |  | 2,378               | 
|                                                     |           |  |        |  |                    |  |                     | 
|Total liabilities 3                                  | 1,052     |  | 1,453  |  | 156                |  | 2,456               | 
|                                                     |           |  |        |  |                    |  |                     | 

|(in € millions)
|---------------
|1              
|2              
|3              

|                                
|--------------------------------
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 160
|---------- | - | -------------------- | ---
|          

|SECONDARY SEGMENTS  GEOGRAPHICALThe basis of allocation of net sales by geographical
    areas is the country or region in which the entity recording the sales is
    located. |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 

|                         | Year ended at 31 December | 
|------------------------ | ------------------------- | 
|                         |                           | 
|                         | 2006                      | 
|                         |                           | 
|Europe                   |                           | 
|                         |                           | 
|The Netherlands          | 3,633                     | 
|                         |                           | 
|United Kingdom           | 1,349                     | 
|                         |                           | 
|Italy                    | 774                       | 
|                         |                           | 
|Germany                  | 950                       | 
|                         |                           | 
|France                   | 649                       | 
|                         |                           | 
|Belgium                  | 277                       | 
|                         |                           | 
|Rest of Europe           | 1,130                     | 
|                         |                           | 
|Americas                 |                           | 
|                         |                           | 
|USA and Canada           | 74                        | 
|                         |                           | 
|South & Middle America   | 43                        | 
|                         |                           | 
|Africa & the Middle East | 89                        | 
|                         |                           | 
|Australia & Pacific      | 442                       | 
|                         |                           | 
|Asia                     |                           | 
|                         |                           | 
|China and Taiwan         | 288                       | 
|                         |                           | 
|India                    | 51                        | 
|                         |                           | 
|Rest of Asia             | 199                       | 
|                         |                           | 
|Total net sales          | 9,948                     | 
|                         |                           | 
|(in € millions)          |                           | 

The location of the total assets of our company at 31 December
  2006 and the capital expenditures (including finance leases) in 2006 were as
  follows:

|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  | At 31 December 2006 | 
|------------------------------------------------------------------------------------ | ----------------- |  | ----------------------------- |  | ---------------------- |  | ------------------------ |  | -------------- |  | ------------------- | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     | Intangible assets |  | Property, plant and equipment |  | Financial fixed assets |  | Total non-current assets |  | Current assets |  | Total assets        | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Europe                                                                               |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|The Netherlands 1                                                                    | 1,005             |  | 692                           |  | 104                    |  | 1,801                    |  | 493            |  | 2,294               | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|United Kingdom                                                                       | 168               |  | 464                           |  |                        |  | 632                      |  | 310            |  | 942                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Italy                                                                                | 45                |  | 36                            |  | 36                     |  | 117                      |  | 286            |  | 403                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Germany                                                                              | 117               |  | 64                            |  | 125                    |  | 306                      |  | 154            |  | 460                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|France                                                                               | 287               |  | 66                            |  | 12                     |  | 365                      |  | 155            |  | 520                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Belgium                                                                              | 31                |  | 202                           |  | 4                      |  | 237                      |  | 81             |  | 318                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Rest of Europe                                                                       | 67                |  | 52                            |  | 8                      |  | 127                      |  | 322            |  | 449                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Americas                                                                             |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|USA and Canada                                                                       |                   |  | 3                             |  | 1                      |  | 4                        |  | 18             |  | 22                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|South & Middle America                                                               | 1                 |  | 2                             |  | 1                      |  | 4                        |  | 24             |  | 28                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Africa & the Middle East                                                             | 2                 |  | 4                             |  |                        |  | 6                        |  | 34             |  | 40                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Australia & Pacific                                                                  | 21                |  | 70                            |  | 16                     |  | 107                      |  | 59             |  | 166                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Asia                                                                                 |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|China and Taiwan                                                                     | 5                 |  | 8                             |  |                        |  | 13                       |  | 99             |  | 112                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|India                                                                                | 35                |  | 4                             |  | 2                      |  | 41                       |  | 23             |  | 64                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Rest of Asia                                                                         | 1                 |  | 11                            |  | 5                      |  | 17                       |  | 64             |  | 81                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Total                                                                                | 1,785             |  | 1,678                         |  | 314                    |  | 3,777                    |  | 2,122          |  | 5,899               | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|(in € millions)                                                                      |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|1 Including TNT goodwill which is not allocated
      to other countries or regions. |                   |  |                               |  |                        |  |                          |  |                |  |                    

|
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|161 | FINANCIAL STATEMENTS | | | CHAPTER 12
|--- | -------------------- | - | ----------
|   

For 2005, the assets and capital expenditures on property,
  plant and equipment can be specified as follows:

|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  | At 31 December 2005 | 
|------------------------------------------------------------------------------------ | ----------------- |  | ----------------------------- |  | ---------------------- |  | ------------------------ |  | -------------- |  | ------------------- | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     | Intangible assets |  | Property, plant and equipment |  | Financial fixed assets |  | Total non-current assets |  | Current assets |  | Total assets        | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Europe                                                                               |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|The Netherlands 1                                                                    | 980               |  | 756                           |  | 99                     |  | 1,835                    |  | 789            |  | 2,624               | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|United Kingdom                                                                       | 163               |  | 400                           |  | 1                      |  | 564                      |  | 323            |  | 887                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Italy                                                                                | 34                |  | 32                            |  | 40                     |  | 106                      |  | 254            |  | 360                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Germany                                                                              | 73                |  | 57                            |  | 85                     |  | 215                      |  | 113            |  | 328                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|France                                                                               | 288               |  | 62                            |  | 3                      |  | 353                      |  | 141            |  | 494                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Belgium                                                                              | 32                |  | 94                            |  | 14                     |  | 140                      |  | 143            |  | 283                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Rest of Europe                                                                       | 241               |  | 47                            |  | 2                      |  | 290                      |  | 253            |  | 543                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Americas                                                                             |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|USA and Canada                                                                       | 1                 |  | 3                             |  | 2                      |  | 6                        |  | 41             |  | 47                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|South & Middle America                                                               |                   |  | 2                             |  | 1                      |  | 3                        |  | 28             |  | 31                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Africa & the Middle East                                                             |                   |  | 3                             |  |                        |  | 3                        |  | 31             |  | 34                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Australia & Pacific                                                                  | 20                |  | 74                            |  | 19                     |  | 113                      |  | 67             |  | 180                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Asia                                                                                 |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|China and Taiwan                                                                     | 4                 |  | 11                            |  |                        |  | 15                       |  | 97             |  | 112                 | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|India                                                                                | 1                 |  | 2                             |  | 1                      |  | 4                        |  | 10             |  | 14                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Rest of Asia                                                                         | 1                 |  | 9                             |  | 6                      |  | 16                       |  | 65             |  | 81                  | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|Total                                                                                | 1,838             |  | 1,552                         |  | 273                    |  | 3,663                    |  | 2,355          |  | 6,018               | 
|                                                                                     |                   |  |                               |  |                        |  |                          |  |                |  |                     | 
|(in € millions)                                                                      |                  
|1 Including TNT goodwill which is not allocated
      to other countries or regions. |                  

The location of employees at year end, including temporary
  employees on our payroll, is as follows:

|                         |         |  |        |  |               |  |         |  |         |  |         | 
|------------------------ | ------- |  | ------ |  | ------------- |  | ------- |  | ------- |  | ------- | 
|                         | Express |  | Mail   |  | Non-allocated |  | 2006    |  | 2005    |  | 2004    | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Europe                   |         |  |        |  |               |  |         |  |         |  |         | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|The Netherlands          | 2,898   |  | 58,141 |  | 230           |  | 61,269  |  | 64,035  |  | 69,907  | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|United Kingdom           | 11,822  |  | 682    |  |               |  | 12,504  |  | 11,857  |  | 11,702  | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Italy                    | 3,101   |  | 1,183  |  |               |  | 4,284   |  | 4,217   |  | 4,353   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Germany                  | 5,255   |  | 15,218 |  |               |  | 20,473  |  | 17,979  |  | 16,106  | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|France                   | 4,687   |  | 30     |  |               |  | 4,717   |  | 4,664   |  | 4,528   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Belgium                  | 2,300   |  | 639    |  |               |  | 2,939   |  | 2,803   |  | 2,648   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Rest of Europe           | 7,979   |  | 8,628  |  |               |  | 16,607  |  | 7,276   |  | 4,799   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Americas                 |         |  |        |  |               |  |         |  |         |  |         | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|USA and Canada           | 758     |  | 202    |  |               |  | 960     |  | 978     |  | 1,199   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|South & Middle America   | 649     |  |        |  |               |  | 649     |  | 538     |  | 701     | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Africa & the Middle East | 1,506   |  | 8      |  |               |  | 1,514   |  | 1,045   |  | 1,330   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Australia & Pacific      | 5,011   |  |        |  |               |  | 5,011   |  | 4,928   |  | 5,027   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Asia                     |         |  |        |  |               |  |         |  |         |  |         | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|China and Taiwan         | 2,418   |  |        |  | 201           |  | 2,619   |  | 2,461   |  | 2,250   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|India                    | 2,399   |  |        |  |               |  | 2,399   |  | 668     |  | 537     | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Rest of Asia             | 3,277   |  |        |  |               |  | 3,277   |  | 2,851   |  | 2,974   | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 
|Total                    | 54,060  |  | 84,731 |  | 431           |  | 139,222 |  | 126,300 |  | 128,061 | 
|                         |         |  |        |  |               |  |         |  |         |  |         | 

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|2006 ANNUAL REPORT
        AND FORM 20-F

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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 162
|---------- | - | -------------------- | ---
|          

|£                                                                                                                                                                                            | 35DIFFERENCES BETWEEN
      IFRS AND US GAAP
      (No corresponding financial statement number) |                                                                                                                                                                                                                                                                | generally accepted accounting principles in
      the United States (US GAAP).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------
|PROFIT FOR THE YEAR AND EQUITY RECONCILIATION
      STATEMENTS
      Our consolidated financial statements are prepared in accordance with IFRS,
      which differ in certain respects from |                                                                                                  | The following tables summarise the principal adjustments,
      gross of their tax effects, which reconcile profit for the period and total
      shareholders equity under IFRS to the amounts that would have been
      reported had US GAAP been applied:



|                                                                               | Year ended at 31 December |  
|------------------------------------------------------------------------------ | ------------------------- | -
|                                                                               |                           |  
|                                                                               | 2006                      |  
|                                                                               |                           |  
|Profit attributable to the equity holders of the parent
      under IFRS       | 670                       |  
|                                                                               |                           |  
|Adjustments for:                                                               |                           |  
|                                                                               |                           |  
|Employee benefits                                                              | 4                         |  
|                                                                               |                           |  
|Employment schemes: cancellation of contract                                   |                           |  
|                                                                               |                           |  
|Employment schemes and group reorganisation                                    |                           |  
|                                                                               |                           |  
|Real estate sale                                                               |                           |  
|                                                                               |                           |  
|Depreciation and amortisation related to discontinued logistics
      business | (60                       | )
|                                                                               |                           |  
|Impact of US GAAP differences on sale of logistics business                    | 31                        |  
|                                                                               |                           |  
|Other                                                                          |                           |  
|                                                                               |                           |  
|Tax effect of adjustments                                                      | 12                        |  
|                                                                               |                           |  
|Profit attributable to the equity holders of the parent
      under US GAAP    | 657                       |  
|                                                                               |                           |  
|of which related to discontinued operations                                    | (173                      | )
|                                                                               |                           |  
|of which related to continuing operations                                      | 830                       |  
|                                                                               |                           |  
|Earnings per ordinary share/ADS under US GAAP 1(in
      € cents)              | 156.2                     |  
|                                                                               |                           |  
|Earnings per diluted ordinary share/ADS under US GAAP 2(in € cents)            | 155.0                     |  
|                                                                               |                           |  

|(in € millions, except per share figures)
|-----------------------------------------
|1                                        
|2                                        
|3                                        



|                                                                                   |       |   | At 31 December |  
|---------------------------------------------------------------------------------- | ----- | - | -------------- | -
|                                                                                   |       |   |                |  
|                                                                                   | 2006  |   | 2005           |  
|                                                                                   |       |   |                |  
|Total equity under IFRS                                                            | 2,008 |   | 3,279          |  
|                                                                                   |       |   |                |  
|Minority interest                                                                  | (25   | ) | (17            | )
|                                                                                   |       |   |                |  
|Equity for the equity holders of the parent under IFRS                             | 1,983 |   | 3,262          |  
|                                                                                   |       |   |                |  
|Adjustments for:                                                                   |       |   |                |  
|                                                                                   |       |   |                |  
|Employee benefits                                                                  | (5    | ) | 18             |  
|                                                                                   |       |   |                |  
|Other long lived intangible assets                                                 | 147   |   | 43             |  
|                                                                                   |       |   |                |  
|Other intangible assets amortisation                                               | (7    | ) | (10            | )
|                                                                                   |       |   |                |  
|Repurchase of shares                                                               |       |   |                |  
|                                                                                   |       |   |                |  
|Pension liability 1                                                                | (539  | ) | (587           | )
|                                                                                   |       |   |                |  
|Depreciation and amortisation related to our discontinued
      logistics business |       |   | (8             | )
|                                                                                   |       |   |                |  
|Other                                                                              | (1    | ) | (6             | )
|                                                                                   |       |   |                |  
|Deferred taxes on adjustments                                                      | (7    | ) | 45             |  
|                                                                                   |       |   |                |  
|Total equity under US GAAP                                                         | 1,571 |   | 2,757          |  
|                                                                                   |       |   |                |  

|(in € millions)
|---------------
|               
|1.             

|
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|163 | FINANCIAL STATEMENTS | | | CHAPTER 12
|--- | -------------------- | - | ----------
|   

The following is a summary of the significant differences for
  our company. EMPLOYEE BENEFITSAs permitted under IFRS 1, First-time Adoption
    of International Financial Reporting Standards, at the date of transition
    to IFRS we have elected to recognise all cumulative actuarial gains and losses
    and as permitted under IAS 19, Employee Benefits, the unrecognised
    prior year service costs for all our defined benefit pension plans. For US
    GAAP purposes the actuarial gains and losses continue to be recognised under
    the corridor approach while unrecognised prior year service costs are recognised
    during the future service periods of the active employees. This has resulted
    in a lower pension expense of €15 million, €10 million and €16
    million under US GAAP than under IFRS in 2006, 2005 and 2004, respectively.
    In 2006, the lower pension expense is partially offset by a curtailment gain
    of €11 million under IFRS that is not recognised in the statements of
    income under US GAAP because this is fully offset by unrecognised losses.
    The curtailment relates to an efficiency incentive of Mail Netherlands and
    the sales of the logistics business and Cendris Document Management. In 2005 employee benefits include expenses of €26 million
  related to payments expected to be made to certain employees on reaching a specific
  number of years of service. As permitted under IFRS 1, First-time Adoption
  of International Financial Reporting Standards, at the date of transition
  to IFRS, we recorded a liability with a corresponding adjustment to shareholders
  equity as at that date. For US GAAP purposes, we have included the amount in
  the income statement resulting in a difference in the profit for the period
  between IFRS and US GAAP. Under IFRS, we have accounted for certain defined benefit obligations
  in Italy by using the actuarial present value of the vested benefits to which
  an employee is currently entitled to, but based on the employees expected
  date of separation or retirement. As permitted under Emerging Issues Task Force
  (EITF) No. 88-1, Determination of Vested Benefit Obligation for Defined Benefit
  Plan, we have accounted for these obligations using the nominal value of
  the vested benefits to which the employee is entitled to if an employee separates
  immediately. The majority of the differences related to such obligations no
  longer exist as of 31 December 2006 due to the sale of the logistics division. EMPLOYMENT SCHEMESIn the past, we recognised a liability for future wage
    guarantees, which did not qualify as a liability under US GAAP. This difference
    resulted in reconciliation to US GAAP shareholders equity. As at 1 January
    2001, after approval of our labour unions and central works council, we transferred
    the liability to an insurance company. As a result, the obligation for future
    wage guarantees was settled in full in December 2001. For US GAAP we recognised
    the transfer payment to the insurance company as a deposit asset that was
    charged to our statements of income based on the wage guarantees paid by the
    insurance company of €11 million in 2004. Following the outcome of an unfavourable court decision with
  regard to the timing of the deductibility of the settlement amount paid for
  fiscal filing purposes in October 2004, we have decided to unwind the contract
  in accordance with the




resolutive condition in the contract as per 23 December 2004.
  For IFRS purposes the termination of the contract led to a repayment by the
  insurance company (for an amount of €134 million) which was accounted for
  as a reduction in our salary costs. For US GAAP purposes however, we have unwound
  the deposit asset (with a remaining balance of €130 million at the moment
  of termination of the contract). Due to the cancellation of the contract the
  reconciling item relating employee schemes no longer exists as per 31 December
  2004. REAL ESTATE SALESDue to timing differences when to account for gains
    on sale of real estate between IFRS and US GAAP, there is a difference in
    the statements of income in 2004 of €20 million caused by the fact that
    for certain real estate transactions in prior years, the legal ownership was
    not transferred until 2004, resulting in a book profit under US GAAP (already
    accounted for in prior years under IFRS at the moment the economic risk was
    transferred). There were no such differences in 2006 and 2005. DISCONTINUED OPERATIONSAs a result of our December 2005 announcement to
    focus on our core competency of providing delivery services, we presented
    assets and liabilities of our discontinued logistics business as long lived
    assets to be disposed of by sale and presented our profit (loss) for the period
    from our discontinued logistics business as profit (loss) from discontinued
    operations. As required under IFRS 5, Non-current Assets Held for Sale and
    Discontinued Operations, we have not depreciated or amortised, since 6 December
    2005, our assets held for sale. On 4 November 2006 we have sold our logistics
    business. In 2005 IFRS 5, Non-current Assets Held for Sale and Discontinued
  Operations, required us to classify non-current assets or a disposal group
  as held for sale if its carrying amount will be recovered principally through
  a sale transaction rather than through continuing use. We met all the criteria
  as required under IFRS 5 for such classification. The position of the SEC is that in the event shareholder approval
  is required, management is not considered having authority to dispose of an
  asset, a requirement in accordance with US GAAP to treat such assets as being
  held for sale. Accordingly, under US GAAP this criteria was not met until 29
  September 2006. The French logistics business met all criteria and was presented
  as discontinued operations in 2005 and the remainder of the logistics business
  was presented as part of continuing operations, whose assets continued to be
  depreciated. At 29 September 2006 the Extraordinary General Meeting of Shareholders
  approved the sale of the remaining logistics division. Due to the approval,
  the US GAAP statements of income have been restated in to reflect the entire
  logistics division as discontinued operations. Depreciation and amortisation from 1 January 2006 to 29 September
    2006 and from 6 December 2005 to 31 December 2005 for our discontinued logistics
    business, other than the French activities that we sold during 2005, amounted
    to €60 million and €8 million, respectively. These amounts are included
    as reconciling items between IFRS and US GAAP.


|                                        
|----------------------------------------
|2006 ANNUAL REPORT
        AND FORM 20-F

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|           |   |                      |    
|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 164
|          

On 4 November 2006 we completed the sale of the logistics division
  to affiliates of Apollo Management L.P. Under IFRS we recognised a loss on disposal
  of €87 million. Under US GAAP, we recognised a loss of €56 million.
  The difference is a result of a smaller loss due to differences in the valuation
  of assets and liabilities between IFRS and US GAAP offset by the release of
  a larger negative currency translation adjustment of €69 million. During 2006 we accelerated the vesting of equity awards pertaining
  to our logistics business employees. This resulted in a remeasurement of such
  awards under US GAAP and recognition of €2 million additional compensation
  expense compared to IFRS. OTHER LONG LIVED INTANGIBLE ASSETS, BUSINESS COMBINATIONS
    AND IMPAIRMENT OF GOODWILLAs permitted under IFRS 1, First-time Adoption of International
    Financial Reporting Standards, we have not adjusted business combinations
    that took place prior to the 1 January 2004 transition date. Prior to 1 January
    2004, goodwill on business combinations differed under our previous GAAP and
    under US GAAP mainly due to differences related to recognition of identifiable
    and separable intangible assets and recognition of certain provisions such
    as restructuring provisions. In addition, we continued to amortise goodwill
    under our previous GAAP until the adoption of IFRS. We adopted SFAS No. 141, Business Combinations, and
  SFAS No. 142, Goodwill and Other Intangible Assets, for business




combinations initiated after 30 June 2001. Effective 2002,the
  provisions of SFAS No. 142 were applied to goodwill and other intangible assets
  acquired prior to 30 June 2001. Since the adoption of SFAS No. 141 and SFAS
  No. 142 goodwill is no longer amortised, but tested, at least annually, for
  impairment. The differences identified within our reconciliation of total
  equity pertaining to other long lived intangible assets are due to the reasons
  noted above as well as differences in our assessment of impairment based upon
  the requirements of our previous GAAP and IFRS compared to US GAAP. Under IFRS and under US GAAP, we amortise identifiable and
  separable intangible assets over their estimated useful lives. Prior to 1 January
  2004, we were not required to separate out intangible assets from goodwill resulting
  in a different carrying value and related amortisation between IFRS and US GAAP
  for separately identifiable intangible assets. The relating gross carrying amount
  was €20 million and the accumulated amortisation was €7 million as
  at 31 December 2006. The impact of such amortisation has resulted in a reduction
  of profit of €3 million in 2006, 2005 and 2004; including €1 million
  in 2006 and €2 million in 2005 and 2004, respectively, related to our discontinued
  logistics business. These differences are included in the other
  line item on our reconciliation of profit under IFRS to US GAAP. The changes in the carrying amount of goodwill for the year
    ended 31 December 2006 are as follows:


|                                     |         |  |      |  |       |  
|------------------------------------ | ------- |  | ---- |  | ----- | -
|                                     | Express |  | Mail |  | Total |  
|                                     |         |  |      |  |       |  
|Balance as at 1 January 2006         | 1,345   |  | 266  |  | 1,611 |  
|                                     |         |  |      |  |       |  
|Additions                            | 56      |  | 42   |  | 98    |  
|                                     |         |  |      |  |       |  
|Disposals                            |         |  | (9)  |  | (9    | )
|                                     |         |  |      |  |       |  
|Internal transfers/reclassifications | 45      |  | (24) |  | 21    |  
|                                     |         |  |      |  |       |  
|Exchange rate differences            | 5       |  | (6)  |  | (1    | )
|                                     |         |  |      |  |       |  
|Balance as at 31 December 2006       | 1,451   |  | 269  |  | 1,720 |  
|                                     |         |  |      |  |       |  
|(in € millions)                      |         |  |      |  |       |  

REPURCHASE OF SHARESOn 29 September 2004 we announced that the State
    of the Netherlands sold a total of 77.7 million ordinary shares in our outstanding
    share capital. We repurchased 20.7 million shares for a per share price of
    €19.74 of the total amount of shares sold by the State of the Netherlands.
    Transfer of the repurchased ordinary shares has taken place in two tranches.
    The first tranche of 7.6 million shares was transferred to us on 4 October
    2004. The transfer of the remaining 13.1 million shares was completed on 5
    January 2005 and repurchased for€ 259 million. Under IFRS, the first tranche of 7.6 million shares representing
  an amount of €150 million, was accounted for in the balance sheet as a
  debit against equity. Related transaction costs (€1 million) have been
  debited against equity both under IFRS and under US GAAP. The transfer of the legal ownership for the second tranche
  took place on 5 January 2005. Under US GAAP (SFAS 150,




Accounting for Certain Financial Instruments with Characteristics
  of both Liabilities and Equity ), the second tranche (of 13.1 million shares)
  classifies as a financial instrument that should be accounted for as a liability
  rather than as equity. Therefore, we have reclassified an amount of €259
  million (including €1 million interest costs) from equity to liabilities
  in our balance sheet as per 31 December 2004. Under IFRS the second tranche
  was presented as a commitment not appearing in the balance sheet as we only
  adopted the requirements of IAS 32 and IAS 39 effective 1 January 2005. We do
  not expect any reconciling items on subsequent share repurchase programmes. MINIMUM PENSION LIABILITY/FAS 158Until the end of 2005 US GAAP required us to record
    a minimum pension liability in the event the accumulated benefit obligation
    (ABO) exceeds the fair value of the pension plan assets, with a corresponding
    reduction in shareholders equity net of deferred taxes. Under IFRS,
    such a minimum pension liability is not required.




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|    |                      |   |           
|--- | -------------------- | - | ----------
|165 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

As at 31 December 2005 and 2004, the ABO amounted to €5,194
    million and €4,643 million, respectively. For certain of our pension
    plans in the Netherlands, in Germany, and in the United States the ABO exceeded
    plan assets, requiring us to record a minimum pension liability. The increase
    in the ABO was mainly due to a decrease in interest rates. In September 2006 the FASB issues Financial Accounting Standard
    158, Employers Accounting for Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R) (FAS
    158). FAS 158 requires companies to fully recognize an asset or liability
    for the overfunded or underfunded status of their benefit plans in the financial
    statements for years ending after 15 December 2006. The pension asset or liability
    equals the difference between the fair value of the plans assets and
    its benefit obligation. The benefit obligation is measured as the projected
    benefit obligation for pension plans and as the accumulated postretirement
    benefit obligation for other postretirement benefits. The impact of the companys
    net funded status is to be recorded in equity as a component of accumulated
    other comprehensive income, net of tax. The impact of this standard for the
    year ended December 2006 resulted in a decrease in Accumulated other comprehensive
    income of €500 million (net of deferred tax assets of €171 million)
    an increase in plan assets of €135 million and an additional provision
    for pension liabilities of €807 million in our financial statements under
    US GAAP. The impact of the adoption of FAS 158 within equity was offset by
    an overall reduction in the pension liability in 2006 primarily due to an
    increase in the discount rate from 4.3% to 4.7%. As of 31 December 2006 the
    amount of unrecognised pension expense within accumulated other comprehensive
    income was€539 million, net of tax. The amounts
    in accumulated other comprehensive income expected to be recognised as components
    of net periodic benefit costs in 2007 are an amortised prior service cost
    credit of €39 million, offset by an amortised net actuarial loss of €37
    million. SHARE BASED PAYMENTSPrior to 1 January 2006, Statement of Financial
    Accounting Standards no. 123, Accounting for Stock-based Compensation
    (SFAS 123), encouraged, but did not require, companies to record compensation
    cost for stock based compensation plans at fair value. During 2004, we chose
    to continue to account for stock based compensation using the intrinsic value
    method prescribed in Accounting Principles Board Opinion no. 25,Accounting
    for Stock Issued to Employees (APB 25), and related interpretations. This
    resulted in the €6 million difference between the 2004 IFRS and US GAAP
    profit attributable to shareholders included within the other
    line item on our reconciliation of profit attributable to shareholders. As all options were granted at an exercise price that equals
  the average price on the Amsterdam Stock Exchange on the day of grant, no charges
  would have been recorded in the 2002, 2003 and/or 2004 income statements. If
  the company had elected to recognise compensation expense based on the fair
  value at the grant dates in accordance with FAS 123, the companys net
  income and net income per share would have decreased to the pro forma amounts
  indicated in the following table:




Year ended at 31 December2004Profit attributable to the equity holdersof the parentAs reported
      752As adjusted
      744Earnings per ordinary share and per ADSAs reported (in € cents)
      158.9As adjusted (in € cents)
      157.2Earnings per ordinary share and per ADSAs reported (in € cents)
      158.7As adjusted (in € cents)
      157.0( in € millions, except per share data) Significant assumption used in our calculation of fair value
  is as follows: Year ended at 31 December2004Risk free interest rate (%)
      3.07Dividend (in € cents per share)
      57.0Volatility (%)
      21.7Life op the option (in years)
      8Vesting period (in years)
      3 These pro forma results are not an indicator of future performance.
  Prior to 1 January 2002, we calculated the fair value of options granted to
  senior managers and members of the Board using the binomial method, American
  style with dividend. From 1 January 2002 until 31 December 2004, we calculated
  the fair value of these options using the Black Scholes model. The use of the
  Black Scholes model, rather than the binomial pricing model, did not have a
  material effect on the compensation expense or on the pro forma profit or per
  share amounts disclosed. Effective 1 January 2005, as permitted by FASB Statement No.
    148,Accounting for Stock-Based Compensation  Transition and Disclosure,
    we have elected to measure our share based payments using a fair value method.
    We have used the modified-prospective method wherein we have recognised share
    based employee compensation as if the fair value based accounting method had
    been used to account for all employee awards granted, modified, or settled
    since 1 January 1994 and not yet vested. When all of our share based awards
    vest over a three year period, this meant fair valuing all awards issued on
    or after 1 January 2002. Under IFRS, as permitted by IFRS 1,First-time
    Adoption of International Financial Reporting Standards, we were required
    to fair value share based awards issued after 7 November 2002 resulting in
    a €1 million difference in the income statement in 2005 between IFRS
    and US GAAP. In December 2004, the FASB issued a revised version of SFAS
    123, Share based payments, Revised 2004 (SFAS 123(R)). The SEC has
    issued Staff Accounting Bulletin No. 107 relating to the adoption of SFAS
    123(R). SFAS 123(R) requires us to measure all employee share based compensation
    awards using a fair value method, estimate award forfeitures, and record such
    expense in our consolidated statements of income. This


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|statement supersedes APB Opinion No. 25,Accounting
        for Stock issued to Employees.The provisions of this statement were
        effective 1 January 2006. Effective 1 January 2005, our share based payments
        for all future awards are measured using the Monte Carlo fair value measurement
        method. The adoption of SFAS 123(R) did not have an impact on our financial
        statements.
      Other differences
      SALE AND LEASEBACK TRANSACTIONSUnder IFRS, if a sale and leaseback transaction results
        in a finance lease, any excess of sales proceeds over the carrying amount
        shall be deferred and amortised over the lease term. If a sale and leaseback
        transaction results in an operating lease, any loss is generally recognised
        immediately. Recognition of gain is based on whether sale price is at,
        below or greater than fair value.
      US GAAP has more specific accounting criteria for sale
        and leasebacks under SFAS No. 28,Accounting for Sales with Leasebacks,
        SFAS No. 66, Accounting for Sales of Real Estate, and SFAS No.
        98, Accounting for Leases (SFAS No. 98). Under SFAS No. 98, a seller-lessee
        is required to make a determination whether the transaction qualifies
        for sale and leaseback accounting. Where sale and leaseback transactions
        do not qualify for sale and leaseback accounting, they are required to
        be accounted for as finance leases.
      Under US GAAP, gains on transactions qualifying as sale
        and leasebacks are recognised based on the degree to which the seller-lessee
        retains the right to use the real estate through the leaseback. Where
        the seller-lessee retains substantially all of the use of the property,
        the gain on the sale transaction is required to be deferred and amortised
        over the lease term. Where the seller-lessee retains only a minor use
        of the property, any profit or loss generally is recognised at the date
        of sale. If the seller-lessee retains more than a minor part but less
        than substantially all of the use of the property, any profit in excess
        of the present value of the minimum lease payments is recognised at the
        date of sale. Losses are recognised immediately upon consummation of the
        sale.
      Differences between IFRS and US GAAP resulted in a cumulative
        effect of €5 million on shareholders equity to defer gains
        on sale of property and to realise these gains over the respective lease
        terms as at 31 December 2005. Due to the sale of the logistics division
        in 2006 we no longer have differences related to such transactions. These
        differences were previously included on the other line item
        within our reconciliation of total equity from IFRS to US GAAP.
      LONG TERM CONTRACT INCENTIVESUnder IFRS, expenses related to long term contract incentive
        payments made to induce customers to enter or renew long term service
        contracts may be deferred and accounted for over the contract period.
        Under US GAAP such payments may not qualify for deferral, and must be
        recognised fully in income in the initial period that the cost is incurred.
        We have paid certain long term contract incentives totaling €6 million
        that did not qualify for deferral under US GAAP. As a result, under US
        GAAP, such payments were recognised immediately in the income statement,
        while under IFRS they have been deferred |  | and will be recognised over the term of the contract.
        This difference resulted in an adjustment to the US GAAP net income and
        shareholders equity in 2005 to reflect the reversal of the related
        annual charge to the income statement recorded under IFRS. Due to the
        sale of the logistics division in 2006 we no longer have differences related
        to such incentives.
      FINANCIAL INSTRUMENTSEffective 1 January 2005, under IFRS we are required to
        value derivative instruments at fair value and are required to recognise
        changes therein recognised either in current earnings or through a separate
        component of shareholders equity, depending on specific criteria.
        Similar accounting treatment is required under US GAAP. As at 31 December
        2006 and 2005 we had no significant differences between IFRS and US GAAP,
        in accounting for our derivative instruments.
      GUARANTEESWe have provided certain indemnifications in 2006 related
        to the sale of our logistics division to Apollo Management L.P. which
        are within the scope of FASB Interpretation No. 45, Guarantors
        Accounting and Disclosure Requirements forGuarantees,
        Including Indirect Guarantees of Indebtedness of Others (FIN 45).
        These provisions expand those required by Statements of Financial Accounting
        Standards 5, Accounting for Contingencies, by requiring the guarantor
        to recognize and disclose certain types of guarantees, even if the likelihood
        of requiring the guarantors performance is remote. The indemnifications
        we have provided relate to circumstance in which payment by us is conditional
        on claims made by Apollo Management L.P., which typically allow for us
        to challenge the claim. Further, our obligations under these agreements
        are limited in terms of time and / or amount.
      It is not possible to predict the maximum potential amount
        of future payments under these or similar agreements due to the conditional
        nature of our obligations and the unique facts and circumstances involved
        in each particular agreement. There is no difference between the amounts
        which we have accrued under IFRS related to these indemnifications and
        the amounts we have accrued under US GAAP. We refer to note 12 of the
        consolidated financial statements.
      The remainder of our guarantees are outside the scope
        of FIN 45 because they are guarantees of our own performance. We had no
        guarantees that met the criteria of FIN 45 in 2005.
      OTHERUnder IFRS, a curtailment gain on a suspended retirement
        plan is recognised as the difference between the curtailment gain and
        the estimated additional liability to terminate the plan. Under US GAAP,
        an estimated liability to terminate a plan is not recorded until the plan
        is formally terminated. This accounting difference resulted in a €2
        million adjustment to our 2005 reconciliation of shareholders equity
        under IFRS to that under US GAAP in order to reverse the recognition of
        the estimated liability to terminate the plan that was made in 2002. Due
        to the sale of the logistics division in 2006 we no longer have differences
        related to the recognition of curtailment gains.
      Under IFRS, provisions were made for constructive obligations
        for early retirement benefits for certain part-time employees in one of
        our group companies. Under US GAAP these provisions
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were not permitted as we were not legally obligated to make
  these payments at year end 2006.This also resulted in a difference at year end
  2004. This difference amounted to €6 million and €3 million at year
  end 2006 and 2005, respectively, and is included on the other line
  item within our reconciliation of total equity from IFRS to US GAAP. Under IFRS, for intangible assets other than goodwill, restoration
  of previously recognised impairments is required when the reason for the impairment
  is no longer valid. Under US GAAP, restoration of previously recognised impairments
  is prohibited. This difference amounted to €1 million, €2 million
  and €3 million at year end 2006, 2005 and 2004, respectively, and is included
  on the other line item within our reconciliation of total equity
  from IFRS to US GAAP. Property, plant and equipment transferred to our company in
  connection with the incorporation of the postal and telecommunications business
  as of 1 January 1989, were valued at the then current value. This method is
  prescribed under Dutch law and permitted under IFRS. US GAAP requires that property,
  plant and equipment be valued at historical cost. No adjustment to the IFRS
  accounts is made in the US GAAP reconciliation in relation to this difference,
  as the original historical cost can not be determined. We recognise deferred tax assets if it is more likely than
  not that they will be realised. Accordingly, we have established valuation allowances
  of €158 million (2005:133) and recorded as at 31 December 2006 net deferred
  tax assets of €63 million (2005:70). Under IFRS we have recorded the same
  amounts of net deferred tax assets. Under IFRS, investments in joint ventures may be proportionately
  consolidated. In general, the proportionate consolidation method is prohibited
  under US GAAP. However, as allowed under the United States Securities and Exchange
  Commissions (SEC) rules applicable to Form 20-F, no adjustment has been
  made for this difference as the joint ventures, in which we hold an investment,
  are operating entities for which we have joint control over the financial operating
  policies with all other parties holding an interest in the respective joint
  venture. We prepare our statement of cash flows in accordance with requirements
  of IFRS, IAS No. 7, Cash Flow Statements. As permitted under the SECs
  rules applicable to Form 20-F, no adjustment has been made for any difference
  that may arise between IFRS and US GAAP.




Additional information related to roll forward of the equity,
  comprehensive income and accumulated other comprehensive income is included
  in the following tables: TotalequityEquity for the equity holders of the parent
      3,146under US GAAP at 31 December 2003Profit attributable to shareholders over 2004
      714under US GAAPFinal dividend 2003 and interim dividend 2004
      (237)Translation adjustment IFRS
      (29)Translation adjustment on US GAAP reconciling items
      (113)Stock options exercised
      3Repurchase of shares 2004 plan October 2004 tranche
      (151)Repurchase of shares 2004 plan January 2005 tranche
      (258)Minimum liability for defined benefit plans
      (454)Other
      1Equity for the equity holders of the parent
      2,622under US GAAP at 31 December 2004Profit attributable to shareholders over 2005
      632under US GAAPFinal dividend 2004 and interim dividend 2005
      (268)Translation adjustment IFRS
      8Translation adjustment on US GAAP reconciling items
      86Stock options exercised
      41Additional liability for defined benefit plans
      (133)Repurchase of shares 2005 plan
      (231)Equity for the equity holders of the parent
      2,757under US GAAP at 31 December 2005Profit attributable to shareholders over 2006
      657under US GAAPFinal dividend 2005 and interim dividend 2006
      (282)Translation adjustment IFRS
      11Translation adjustment on US GAAP reconciling items
      (8)Share based compensation
      15Reduction of liability for defined benefit plans
      48Release of currency translation adjustment related to
      69logistics businessRepurchase/cancellation of shares in 2006
      (1,736)Stock options exercised
      52Other
      (12)Equity for the equity holders of the parent
      1,571under US GAAP at 31 December 2006(in € millions)


|                                                                               |      |  | Year ended at 31 December | 
|------------------------------------------------------------------------------ | ---- |  | ------------------------- | 
|                                                                               |      |  |                           | 
|COMPREHENSIVE INCOME                                                           | 2006 |  | 2005                      | 
|                                                                               |      |  |                           | 
|Profit attributable to the equity holders of the parent                        | 657  |  | 632                       | 
|under US GAAP                                                                  |      |  |                           | 
|                                                                               |      |  |                           | 
|Unrealised forex gains and (losses) IFRS                                       | 11   |  | 8                         | 
|                                                                               |      |  |                           | 
|Unrealised forex gains and (losses) US GAAP reconciling
      items            | (8)  |  | 86                        | 
|                                                                               |      |  |                           | 
|Decrease/(Increase) liability for defined benefit plans                        | 48   |  | (133)                     | 
|                                                                               |      |  |                           | 
|Release of currency translation adjustment related to logistics
      business | 69   |  |                           | 
|                                                                               |      |  |                           | 
|Other                                                                          | (9)  |  |                           | 
|                                                                               |      |  |                           | 
|Comprehensive income under US GAAP                                             | 768  |  | 593                       | 
|                                                                               |      |  |                           | 
|(in € millions)                                                                |      |  |                           | 



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|                                                                               |       |  | Year ended at 31 December | 
|------------------------------------------------------------------------------ | ----- |  | ------------------------- | 
|                                                                               |       |  |                           | 
|ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF RELATED                         | 2006  |  | 2005                      | 
|INCOME TAXES (UNDER US GAAP)                                                   |       |  |                           | 
|                                                                               |       |  |                           | 
|Opening accumulated comprehensive income                                       | (822) |  | (783)                     | 
|                                                                               |       |  |                           | 
|Unrealised forex gains and (losses) IFRS                                       | 11    |  | 8                         | 
|                                                                               |       |  |                           | 
|Unrealised forex gains and (losses) US GAAP reconciling
      items            | (8)   |  | 86                        | 
|                                                                               |       |  |                           | 
|Decrease/(Increase) liability for defined benefit plans                        | 48    |  | (133)                     | 
|                                                                               |       |  |                           | 
|Release of currency translation adjustment related to logistics
      business | 69    |  |                           | 
|                                                                               |       |  |                           | 
|Other                                                                          | (9)   |  |                           | 
|                                                                               |       |  |                           | 
|Total accumulated other comprehensive income,                                  | (711) |  | (822)                     | 
|net of taxes (US GAAP)                                                         |       |  |                           | 
|                                                                               |       |  |                           | 
|(in € millions)                                                                |       |  |                           | 





|The total accumulated other comprehensive income,
            net of taxes, of €711 million mainly includes a pension liability
            of €539 million and the remainder consist of unrealised gains
            and losses on foreign currency translations.
          RECENT US GAAP ACCOUNTING PRONOUNCEMENTSThe Financial Accounting Standards Board
            in the United States (FASB) has issued certain Statements of Financial
            Accounting Standards (SFAS), each of which, when adopted, could affect
            our consolidated financial statements for US GAAP reporting.
          In September 2006 the FASB issued SFAS 157, Fair
            Value Measures,(SFAS 157). This statement enhances the guidance
            for using fair value to measure assets and liabilities. SFAS 157 provides
            a single definition of fair value, together with a framework for measuring
            it, and requires additional disclosure about the use of fair value
            to measure assets and liabilities. We are required to adopt this pronouncement
            effective 1 January 2008. We are evaluating the impact this standard
            will have on our financial statements.
          In September 2006, the FASB issued FASB Staff Position
            (FSP) No. AUG Air-1, Accounting for Planned Major Maintenance Activities.
            The FSP prohibits the use of the accrue-in-advance method of accounting
            for planned major maintenance activities in annual and interim reporting
            periods. This FSP amends the requirements of American Institute of
            Certified Public Accountants (AICPA) Audit and Accounting Guide, Airlines.
            This FSP is effective for us starting 1 January 2007. We do not expect
            this FSP will have an impact on our financial statements related to
            the maintenance of our aircraft, as our current practice is to expense
            such maintenance costs when incurred.
          In June 2006, the FASB issued FASB interpretation
            No. 48,Accounting for Uncertainty in Income
            taxes an interpretation of FASB Statement No. 109, Accounting for
            Income Taxes. This interpretation prescribes a recognition threshold
            and measurement attribute for the financial statement recognition
            and measurement of a tax position taken or expected to be taken in
            a tax return. This interpretation also provides guidance on derecognition,
            classification, interest and penalties, accounting in interim periods,
            disclosure, and transition. This interpretation is effective for us
            starting 1 January 2007. We are evaluating the impact this interpretation
            will have on our financial statements. |  | In June 2006, the Emerging Issues Task Force (EITF)
            of the FASB ratified EITF 06-2, Accounting for Sabbatical Leave
            and Other Similar Benefits Pursuant to FASB Statement No. 43, Accounting
            for Compensated Absences(SFAS 43). This pronouncement
            provides guidelines under which sabbatical leave or other similar
            benefits provided to an employee are considered to accumulate, as
            defined in SFAS 43. If such benefits are deemed to accumulate, then
            the compensation cost associated with a sabbatical or other similar
            benefit arrangement should be accrued over the requisite service period.
            The provisions of this pronouncement are effective for us starting
            1 January 2007 and allow for either retrospective application or a
            cumulative effect adjustment approach upon adoption. We do not expect
            the adoption of this pronouncement will have a material impact on
            our financial statements.
          In March 2006, the EITF of the FASB issued EITF 06-3,
            How Taxes Collected from Customers and Remitted to Governmental
            Authorities Should be Presented in the Income Statement (That is,
            Gross versus Net Presentation). This pronouncement requires disclosure
            of a companies accounting policy regarding the gross or net presentation
            of point-of-sales taxes such as sales tax and value-added tax. If
            taxes included in gross revenues are significant, the amount of such
            taxes for each period for which an income statement is presented should
            also be disclosed. This pronouncement is effective for us starting
            1 January 2007. We do not expect that the adoption of this pronouncement
            will have a material impact on our financial statements as we report
            such revenues on a net basis.
          The EITF of the FASB issued EITF 05 -6, Determining
            the Amortisation Period for Leasehold Improvements Purchased after
            Lease Inception or Acquired in a Business Combination. This pronouncement
            requires that leasehold improvements acquired in a business combination
            or purchased subsequent to the inception of the lease should be amortised
            over the lesser of the useful life of the asset or the lease term
            that includes reasonably assured lease renewals as determined on the
            date of acquisition of the leasehold improvement. We were required
            to adopt this pronouncement effective 1 January 2006. The adoption
            of this pronouncement did not have an impact on our financial statements.
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£36 SUBSEQUENT EVENTS (No corresponding financial statement number) ACQUISITION EXPRESSO MERCURIO S.A.On 10 January 2007 we announced the completion of
    the acquisition of 100% of the shares of Expresso Mercurio S.A. (Mercurio),
    the market leader in the Brazilian domestic express market. The acquisition
    price is €151 million. The unaudited pre-acquisition balance sheet and the preliminary
  opening balance sheet of the acquired business are summarized below: Pre-acquisitionbalance
          sheets(unaudited)
      
      ExpressoMercurio
          S.A.(unaudited)Goodwill
      
      
      106Other non-current assets
      16
      
      43Total non-current assets
      16
      
      149Total current assets
      24
      
      25Total assets
      40
      
      174Equity
      21
      
      151Non-current liabilities
      3
      
      4Current liabilities
      16
      
      19Total liabilities and equity
      40
      
      174(in € millions) The unaudited revenues for 2006 amounted to €190 million.
  The unaudited net profit after tax amounted to €3 million. The acquisition
  of Mercurio helps TNT in achieving our strategic intend to expand in emerging
  markets and to develop our global networks. Thanks to Mercurio we will increase
  our footprint in Brazil and the neighboring countries such as Chile, Argentina
  and Uruguay, while the current Mercurio customers can benefit from the worldwide
  coverage of the TNT network. The Brazilian economy is one of the fastest growing
  in the world, marked by high investments in the manufacturing sector (automotive,
  pharmaceutical/chemical industry), with expected growth rates for the domestic
  express market in the range of 10 to 15% annually in the coming years. REPURCHASE PROGRAMMEOn 23 January 2007, we completed the €1,000
    million repurchase programme, we had announced on 6 November 2006. After 2006
    we purchased 3,307,164 shares at an average price of €34,22 per share
    for a total amount of €113 million. It is our intention to cancel the
    ordinary shares and request for such cancellation to be approved by our shareholders. SALE OF FREIGHT MANAGEMENT BUSINESSOn 16 November 2006 we signed a Sale and Purchase
    Agreement to sell our freight management business unit to the French logistics
    service provider Geodis SA. On 5 February 2007 we completed the sale. The
    total net proceeds are approximately €450 million. The book gain of the
    transaction is expected to be approximately €190 million. Final amounts
    will be calculated on the basis of completion accounts. The results




of the transaction will be accounted for in our 2007 profit
  for discontinued operations. REPURCHASE PROGRAMME 26 FEBRUARY 2007On 26 February 2007 we announced the start of a
    share repurchase programme of up to €400 million, to start as soon as
    possible after the Annual General Meeting of shareholders (AGM) on 20 April
    2007. The programme follows the completion of the sale of our freight management
    business. It is our intention to cancel the ordinary shares acquired through
    the repurchase programme. £37POSTAL REGULATION AND CONCESSION(No corresponding financial statement number) Due to the importance of postal services to society, regulation
  is a significant factor in our mail business. The mandatory undertaking of certain
  postal activities in the Netherlands, some of which are exclusive to us, has
  been assigned to us in the Dutch Postal Act. In the Netherlands, the key legislation regulating our mail
  activities is the Dutch Postal Act. The Dutch Postal Act requires TNT to perform
  the mandatory postal services in the Netherlands and it grants us exclusive
  rights to provide some of these services, the reserved postal services. In connection with the Dutch Postal Act there is the parliamentary
  Postal Decree, which specifies the services that constitute the mandatory postal
  services and defines the scope of the reserved postal services. The combination
  of these mandates and exclusive rights are commonly called the Postal
  Concession. The Postal Concession is performed by our subsidiary Royal
  TNT Post B.V. Furthermore, there is a General Postal Regulations Decree,
  which specifies our obligations regarding the performance of mandatory postal
  services and the transparency of the financial accounting of these services according
  to the EU Postal Directive. The responsibility for supervising our performance of the mandatory
  postal services lies with an independent Supervisory Authority for Post and
  Telecommunications established by the government, which is commonly called by
  its Dutch acronym OPTA. The Minister of Economic Affairs is responsible for
  postal regulation and policy.




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On 16 December 2004 the Minister of Economic Affairs discussed
  his vision for the Dutch postal market with parliament. During this meeting
  parliament gave its support to the vision, which addressed issues such as full
  liberalisation, the scope of the mandatory postal services and tariff regulation.
  The vision for the Dutch postal market has been translated into the proposal
  for a new Dutch Postal Act that passed the Dutch government on 13 April 2006.
  The Dutch governments policy contains the following elements: 
      full liberalisation of the Dutch postal
        market as of 1 January 2008 (conditional on full market liberalisation
        in the United Kingdom and Germany, i.e. the condition of a level playingfield),
      we will be required to perform the mandatory
        postal services in the Netherlands for an undefined period,
      the Postal Act and the scope of the mandatory
        postal services can be evaluated every four years,
      rates for mandatory postal services will
        be regulated using a price cap system linked to inflation,
      non-discrimination will be applicable to
        our mail services. Competitors and customers must be treated equally in
        terms of rates and conditions, and
      the OPTA will be charged with monitoring
        the mandatory services and non-discrimination requirements. We are pleased that the policy regarding liberalisation is
  conditional on the future de facto liberalisation in the United Kingdom and
  Germany, where further liberalisation is also scheduled to take place in 2006
  and 2008 respectively. The decision by the Dutch government to fully liberalise the
  Dutch postal market on 1 January 2008 and the proposal for a new Dutch Postal
  Act await approval of parliament. The dossier will probably be discussed during
  the course of 2007. THE POSTAL CONCESSIONMandatory postal servicesThe domestic mandatory postal services mainly consist of the
  conveyance against payment of standard single rates of the following postal
  items: 
    letters (including reply items) and printed
      matter with a maximum individual weight of two kilogrammes,
    postal parcels with a maximum individual weight
      of 10 kilogrammes, and
    registered, registered insured and registered
      value declared items. In addition, bulk mail of letters up to an individual weight
  of 50 grammes (100 grammes prior to 1 January 2006), which are conveyed against
  separately agreed rates, are part of the mandatory postal services. Mandatory
  postal services also cover rental of P.O. boxes. We are not required to provide the delivery of bulk printed
  matter such as advertising, magazines and newspapers, the delivery of bulk letters
  with an individual weight above 50 grammes and unaddressed mail items. For international inbound and outbound mail, based on the Dutch
  Postal Act and in accordance with the rules of the Universal Postal Union (UPU),
  mandatory postal services mainly comprise conveyance against payment of both
  postal items at standard single rates and of bulk mail items at separately agreed
  rates with a maximum individual weight of




two kilogrammes and of postal parcels with a maximum individual
  weight of 20 kilogrammes. In addition, mandatory postal services cover the postal
  services regulated by the UPU. Reserved postal servicesUnder the Dutch Postal Act and the Postal Decree,
    the reserved postal services include the following exclusive rights: 
      the conveyance of domestic and
        inbound international letters with a maximum individual weight of 50 grammes
        (100 grammes prior to 1 January 2006) at a rate of less than two and a
        half times (three times prior to 1 January 2006) the standard single rate
        (€0.39) for the lowest weight class of 20 grammes,
      the exclusive right to place
        letterboxes intended for the public alongside or on public roads, and
      the exclusive right to issue
        postal stamps and imprinted stamps bearing the likeness of the monarch
        and/or the word Nederland. These exclusive rights do not extend to courier services or
  services where the letters are delivered at the rate of more than two and a
  half times the standard single rate. The exclusive rights also do not extend
  to the conveyance of parcels, letters weighing in excess of 50 grammes and printed
  materials such as advertising, newspapers and magazines. In addition, the exclusive
  rights do not extend to the conveyance of letters by a business to its own customers. Accounting other financial obligationsOur obligations on reporting include the establishment
    of an annual report on our performance of the mandatory postal services, providing,
    among other things, an overview of the financial results related to the mandatory
    postal services. This report must be reviewed by an independent auditor appointed
    by OPTA. Our financial accounting obligations require us to maintain
  separate financial accounts within our internal financial administration for mandatory
  postal services. This separate accounting must be broken down into reserved
  postal services and other mandatory postal services and must be separated from
  the accounting of our other activities. Every year, we must submit to OPTA a
  declaration of an independent auditor, appointed by OPTA that our financial accounting
  system complies with these obligations. This declaration has to be published
  by OPTA in the Staatscourant. Underlying this accounting system and the financial reports
  to OPTA is a system for allocating costs and revenues to the different types
  of services. This system complies with the accounting rules laid down in the
  EU Postal Directive and is approved by OPTA for the period ending 31 December
  2006. The approval of OPTA was officially published in the Staatscourant
  on 14 July 2004. The full text of the description of the allocation system is
  published in Dutch by OPTA on their website, www.opta.nl. Value added tax on postal servicesAt present, we are not allowed to charge value added
    tax on postal items forming part of the mandatory postal services. The flip
    side of this is that for mandatory postal services we can not deduct the VAT
    amounts paid on our purchases of services and goods related to the mandatory
    services. We are required to charge VAT on all services not included in the
    mandatory




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|171 | FINANCIAL STATEMENTS | | | CHAPTER 12
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|services, i.e. the services in competition with other
        operators. Competitors are required to charge VAT on those items as well.
        Therefore, there is a level playing field for competitors and our company
        on these services.
      Regulatory conditions for the provivision of mandatory
        postal servicesRegarding mandatory postal services the General
        Postal Regulation Decree imposes various regulatory conditions on us with
        respect to service provision, tariffs, cost and revenue accounting, financial
        administration and reporting. Other than the mandatory postal services,
        none of our postal services is subject to governmental control.
      According to the Dutch Postal Act, article 2d, we are
        obliged to give our competitors entrance to our P.O. boxes. This service
        has to be delivered against reasonable, objectively justifiable and non-discriminatory
        conditions and remunerations. To date these conditions and remunerations
        are the negotiated results between parties.
      With respect to service levels, the General Postal Regulations
        Decree requires us to provide a level of service that complies with modern
        standards, to provide nationwide services and to perform a delivery round
        every day, except for Sundays and public holidays. We are required to
        deliver not less than 95% of all domestic letters the day after the day
        of posting, not including Sundays and public holidays. We are required
        to maintain a network of service points (post offices and agents) for
        the access of the general public to the services. With respect to rates
        and conditions, we are required to set rates and associated conditions
        that are transparent, non discriminatory and uniform. However, we may
        grant volume discounts for items of correspondence and negotiate specific
        prices and conditions with high-volume users. We are required to submit
        proposed rate changes to OPTA, which has to evaluate whether the proposed
        changes are in accordance with the price cap system.
      The price cap system measures tariff developments in
        two different baskets of services, a total basket and a small
        users basket. The total basket comprises domestic mandatory postal
        services provided to all customers. The small users basket comprises a
        selection of the total basket of domestic mandatory postal services that
        is representative for consumers and small business users.
      The price cap system measures tariff developments in
        two different baskets of services, a total basket and a small
        users basket. The total basket comprises domestic mandatory postal
        services provided to all customers. The small users basket comprises a
        selection of the total basket of domestic mandatory postal services that
        is representative for consumers and small business users.
      The price cap system uses a weighing factor for each
        service in both baskets. The levels of the indices for both baskets are
        not to exceed the official national index of wages for employees in the
        market sector.
      The price cap system was last evaluated in 2002. Since
        an earlier decision of the Ministry of Economic Affairs to freeze the
        tariffs controlled by the price cap system was declared void in June 2004,
        we have remained able to amend the individual |  | rates for mandatory postal services,
      subject to the provisions of the tariff control system. However, in view
      of the wider importance of the adoption of an integral and balanced vision
      for the postal market as submitted to parliament, we announced our intention
      not to increase the price of a stamp for consumers from the level of €0.39
      for the years 2004, 2005 and 2006. On 30 August 2006 we announced to amend
      the TNT Post rates on 1 January 2007. The rate for single-item domestic
      letters up to 20 grammes will be increased to €0.44. This will be the
      first rate increase for single-item mail in five and a half years. We intend
      not to increase the €0.44 rate again until 2010. The newly announced
      rates (12.1% average increase) remain within the inflation rate of 12.5%
      on aggregate since 2001. The rate increases fall within the maximum levels
      allowed by law, which has been confirmed by OPTA.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                
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|2006 ANNUAL REPORT AND FORM 20-F
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|---------- | - | -------------------- | ---
|CHAPTER 12 | | | FINANCIAL STATEMENTS | 172
|          

TNT N.V. CORPORATE BALANCE SHEETS

|      |                                          | At 31 December | 
|----- | ---------------------------------------- | -------------- | 
|      |                                          |                | 
|      | BEFORE PROPOSED APPROPRIATION OF PROFIT  |                | 
|      |                                          | 2006           | 
|      |                                          |                | 
|      | ASSETS                                   |                | 
|      |                                          |                | 
|      | Non-current assets                       |                | 
|      |                                          |                | 
|      | Investments in group companies           | 3,672          | 
|      |                                          |                | 
|      | Investments in associates                | 56             | 
|      |                                          |                | 
|      | Deferred tax assets                      | 5              | 
|      |                                          |                | 
|£38   | Total financial fixed assets             | 3,733          | 
|      |                                          |                | 
|£39   | Pension asset                            | 495            | 
|      |                                          |                | 
|      | Total non-current assets                 | 4,228          | 
|      |                                          |                | 
|      | Current assets                           |                | 
|      |                                          |                | 
|      | Accounts receivable from group companies | 97             | 
|      |                                          |                | 
|      | Other accounts receivable                | 30             | 
|      |                                          |                | 
|      | Cash and cash equivalents                | 16             | 
|      |                                          |                | 
|      | Total current assets                     | 143            | 
|      |                                          |                | 
|      | Total assets                             | 4,371          | 
|      |                                          |                | 
|      |                                          |                | 
|      | LIABILITIES AND EQUITY                   |                | 
|      |                                          |                | 
|£40,9 | Equity                                   |                | 
|      |                                          |                | 
|      | Issued share capital                     | 203            | 
|      |                                          |                | 
|      | Additional paid in capital               | 1,245          | 
|      |                                          |                | 
|      | Cumulative translation adjustment        | (5)            | 
|      |                                          |                | 
|      | Hedge reserves                           | (21)           | 
|      |                                          |                | 
|      | Other reserves                           | 0              | 
|      |                                          |                | 
|      | Unappropriated profit                    | 561            | 
|      |                                          |                | 
|      | Total shareholders equity               | 1,983          | 
|      |                                          |                | 
|      | Non-current liabilities                  |                | 
|      |                                          |                | 
|£13   | Euro Bonds                               | 1,004          | 
|      |                                          |                | 
|      | Total non-current liabilities            | 1,004          | 
|      |                                          |                | 
|      | Current liabilities                      |                | 
|      |                                          |                | 
|      | Accounts payable to group companies      | 1,292          | 
|      |                                          |                | 
|      | Short term provision                     | 47             | 
|      |                                          |                | 
|      | Other current liabilities                | 33             | 
|      |                                          |                | 
|      | Accrued current liabilities              | 12             | 
|      |                                          |                | 
|      | Total current liabilities                | 1,384          | 
|      |                                          |                | 
|      | Total liabilities and equity             | 4,371          | 
|      |                                          |                | 

| | (in € millions, except percentages)
| | -----------------------------------
| |                                   
| |                                   
| |                                   
| |                                    



TNT N.V. CORPORATE
  STATEMENTS OF INCOME

| |                                                         |  | Year ended at 31 December |  
| | ------------------------------------------------------- |  | ------------------------- | -
| |                                                         |  |                           |  
| |                                                         |  | 2006                      |  
| |                                                         |  |                           |  
| | Results from continuing operations                      |  | 806                       |  
| |                                                         |  |                           |  
| | Results from discontinued operations                    |  | (70                       | )
| |                                                         |  |                           |  
| | Results from investments in group companies after taxes |  | 736                       |  
| |                                                         |  |                           |  
| | Other income and expenses after taxes                   |  | (66                       | )
| |                                                         |  |                           |  
| | Profit attributable to the shareholders                 |  | 670                       |  
| |                                                         |  |                           |  

| | (in € millions)
| | ---------------
| |               

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|173 | FINANCIAL STATEMENTS | | | CHAPTER 12
|   

NOTES TO THE CORPORATE
  BALANCE SHEETS AND STATEMENTS OF INCOME

|ACCOUNTING POLICIES FOR VALUATION AND
        DETERMINATION OF RESULT TNT N.V.
      The corporate financial statements for the year ended
        31 December 2006 have been prepared in accordance with Part 9 of Book
        2 of the Dutch Civil Code. We have applied the option in Article 362 (8)
        to use the same principles of valuation and determination of result for
        the corporate financial statements as the consolidated financial statements.Our corporate balance sheets and statements of income
        have been adjusted to reflect the adoption of IFRS. This has impacted
        our equity and the carrying value of the investments in group companies
        by €12 million as at 1 January 2004 and €560 million as at 31
        December 2004. As at 1 January 2005 the adoption of IAS 32 and IAS 39
        resulted in a decrease of €9 million relating to the valuation of
        a put option.
      Our investments in group companies are carried at net
        asset value. For the principles of valuation of assets and liabilities
        and for the determination of results reference |  | is made to the notes to the consolidated balance sheet
        and statements of income.
      The balance sheet as of 31 December 2005 and the statements
        of income over 2005 and 2004 have been restated following a reassessment
        of the risks and rewards related to the Dutch pension plans. These pension
        plans are to be regarded as group plans which should, in accordance with
        IAS 19.34a, be accounted for at TNT N.V. level. As a result of the revised
        position the balance sheet of TNT N.V. as of 31 December 2005 was restated
        with retrospective effect whereby Pension assets of €383 million
        were recorded against a corresponding decrease of €383 million in
        the Investments in group companies balance. There was no impact on equity
        or results since the costs of the pension plans did not change at a consolidated
        level. In order to reflect the difference between the net benefit costs
        for TNT N.V. and the costs recharged to the subsidiaries based on the
        contribution payable, results from investments were lowered by €105
        million and €151 million for 2005 and 2004 respectively. Other income
        and expense over 2005 and 2004 were increased by the corresponding amounts.
        From a fiscal unity perspective the tax effects are accounted for at subsidiary
        level.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

£38 TOTAL FINANCIAL ASSETS: 3,733 MILLION (2005: 4,476)

|STATEMENT OF CHANGES FINANCIAL FIXED ASSETS |  |                                |   |                           |   |                     |  |                              |   |        |  
|------------------------------------------- |  | ------------------------------ | - | ------------------------- | - | ------------------- |  | ---------------------------- | - | ------ | -
|                                            |  | Investments in group companies |   | Investments in associates |   | Deferred tax assets |  | Prepayments & accrued income |   | Total  |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Balance at 31 December 2004                 |  | 3,895                          |   | 32                        |   |                     |  | 3                            |   | 3,930  |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Adoption IAS 32/39                          |  | (9                             | ) |                           |   |                     |  | (3                           | ) | (12    | )
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Balance at 1 January 2005                   |  | 3,886                          |   | 32                        |   |                     |  |                              |   | 3,918  |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|CHANGES IN 2005                             |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Results                                     |  | 634                            |   | (2                        | ) |                     |  |                              |   | 632    |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Acquisitions/additions                      |  |                                |   | 13                        |   | 5                   |  |                              |   | 18     |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Disposals/decreases                         |  | (111                           | ) |                           |   |                     |  |                              |   | (111   | )
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Withdrawals/repayments                      |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Exchange rate differences                   |  | 19                             |   |                           |   |                     |  |                              |   | 19     |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Other changes                               |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Total changes                               |  | 542                            |   | 11                        |   | 5                   |  |                              |   | 558    |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Balance at 31 December 2005                 |  | 4,428                          |   | 43                        |   | 5                   |  |                              |   | 4,476  |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|CHANGES IN 2006                             |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Results                                     |  | 736                            |   | (6                        | ) |                     |  |                              |   | 730    |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Acquisitions/additions                      |  | 647                            |   | 19                        |   |                     |  |                              |   | 666    |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Disposals/decreases                         |  | (2,138                         | ) |                           |   |                     |  |                              |   | (2,138 | )
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Withdrawals/repayments                      |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Exchange rate differences                   |  | (1                             | ) |                           |   |                     |  |                              |   | (1     | )
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Other changes                               |  |                                |   |                           |   |                     |  |                              |   |        |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Total changes                               |  | (756                           | ) | 13                        |   |                     |  |                              |   | (743   | )
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|Balance at 31 December 2006                 |  | 3,672                          |   | 56                        |   | 5                   |  |                              |   | 3,733  |  
|                                            |  |                                |   |                           |   |                     |  |                              |   |        |  
|(in € millions)                             |  |                                |   |                           |   |                     |  |                              |   |        |  



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|2006 ANNUAL REPORT AND FORM 20-F
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|CHAPTER 12 | | | FINANCIAL STATEMENTS | 174
|          

|Investments in group companies include our investments
        in our discontinued freight management business.
      £39 PENSION ASSET 495 MILLION (2005: 383)
      TNT N.V. is the sponsoring employer for two Dutch pension
        plans, which are externally funded and are covering the majority of TNTs
        employees in the Netherlands. In accordance with IAS19.34a the net defined
        benefit cost is recognised in the |  | corporate financial statements of TNT N.V.
      The other group companies recognise the costs equal to the contribution
      payable for the period in their financial statements. For TNT NV the contributions
      received from other group entities offset the pension expense. The impact
      of the contributions is represented as participant contributions in the
      table below. The table below reconciles the opening and closing balances
      of the present value of the defined benefit obligation and the fair value
      of plan assets for the TNT N.V.- sponsored group pension plans.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                |  |        |   |        |  
|----------------------------------------------- |  | ------ | - | ------ | -
|                                                |  | 2006   |   | 2005   |  
|                                                |  |        |   |        |  
|CHANGE IN BENEFIT OBLIGATION                    |  |        |   |        |  
|                                                |  |        |   |        |  
|Benefit obligation at beginning of year         |  | (4,502 | ) | (3,953 | )
|                                                |  |        |   |        |  
|Service costs                                   |  | (137   | ) | (135   | )
|                                                |  |        |   |        |  
|Interest costs                                  |  | (198   | ) | (193   | )
|                                                |  |        |   |        |  
|Amendments                                      |  | 8      |   |        |  
|                                                |  |        |   |        |  
|Prior service costs/termination benefit costs   |  |        |   | (52    | )
|                                                |  |        |   |        |  
|Curtailments/settlements                        |  | 9      |   |        |  
|                                                |  |        |   |        |  
|Actuarial (loss)/gain                           |  | 271    |   | (242   | )
|                                                |  |        |   |        |  
|Benefits paid                                   |  | 81     |   | 73     |  
|                                                |  |        |   |        |  
|Benefit obligation at end of year               |  | (4,468 | ) | (4,502 | )
|                                                |  |        |   |        |  
|CHANGE IN PLAN ASSETS                           |  |        |   |        |  
|                                                |  |        |   |        |  
|Fair value of plan assets at beginning of year  |  | 4,179  |   | 3,615  |  
|                                                |  |        |   |        |  
|Actual return on plan assets                    |  | 382    |   | 477    |  
|                                                |  |        |   |        |  
|Participant contributions                       |  | 122    |   | 160    |  
|                                                |  |        |   |        |  
|Benefits paid                                   |  | (81    | ) | (73    | )
|                                                |  |        |   |        |  
|Fair value of plan assets at end of year        |  | 4,602  |   | 4,179  |  
|                                                |  |        |   |        |  
|FUNDED STATUS AS AT 31 DECEMBER                 |  |        |   |        |  
|                                                |  |        |   |        |  
|Funded status                                   |  | 134    |   | (323   | )
|                                                |  |        |   |        |  
|Unrecognised net actuarial loss                 |  | 322    |   | 653    |  
|                                                |  |        |   |        |  
|Unrecognised prior service costs                |  | 39     |   | 53     |  
|                                                |  |        |   |        |  
|Pension assets                                  |  | 495    |   | 383    |  
|                                                |  |        |   |        |  
|COMPONENTS OF EMPLOYER PENSION EXPENSE          |  |        |   |        |  
|                                                |  |        |   |        |  
|Service costs                                   |  | (137   | ) | (135   | )
|                                                |  |        |   |        |  
|Interest costs                                  |  | (198   | ) | (193   | )
|                                                |  |        |   |        |  
|Expected return on plan assets                  |  | 342    |   | 298    |  
|                                                |  |        |   |        |  
|Amortisation of actuarial loss                  |  | (24    | ) | (25    | )
|                                                |  |        |   |        |  
|Curtailment gain                                |  | 8      |   |        |  
|                                                |  |        |   |        |  
|Other costs                                     |  | (1     | ) |        |  
|                                                |  |        |   |        |  
|Participant contributions                       |  | 122    |   | 160    |  
|                                                |  |        |   |        |  
|Total post employment benefit income/(expenses) |  | 112    |   | 105    |  
|                                                |  |        |   |        |  
|WEIGHTED AVERAGE ASSUMPTIONS AS AT 31 DECEMBER  |  |        |   |        |  
|                                                |  |        |   |        |  
|Discount rate                                   |  | 4.7%   |   | 4.3%   |  
|                                                |  |        |   |        |  
|Expected return on plan assets                  |  | 7.9%   |   | 7.9%   |  
|                                                |  |        |   |        |  
|Rate of compensation increase                   |  | 2.0%   |   | 2.0%   |  
|                                                |  |        |   |        |  
|Rate of benefit increase                        |  | 2.0%   |   | 2.0%   |  
|                                                |  |        |   |        |  
|(in € millions, except percentages)             |  |        |   |        |  

For additional details on the Dutch pension plans we refer
  to note 10.



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|175 | FINANCIAL STATEMENTS | | | CHAPTER 12
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£40 EQUITY: 1,983 MILLION (2005: 3,262)

|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|--------------------------------------------- |  | -------------------- | - | -------------------------- | - | --------------------------------- | - | --------------- | - | -------------- | - | ----------------- | - | -------------------------- | -
|                                              |  | Issued share capital |   | Additional paid in capital |   | Cumulative translation adjustment |   | Hedging reserve |   | Other reserves |   | Retained earnings |   | Total shareholders equity |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Balance at 31 December 2004                   |  | 230                  |   | 1,421                      |   | (35                               | ) |                 |   | 1,052          |   | 657               |   | 3,325                      |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Effect on adoption of IAS 32/39               |  |                      |   |                            |   |                                   |   |                 |   | (268           | ) |                   |   | (268                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Balance at 1 January 2005                     |  | 230                  |   | 1,421                      |   | (35                               | ) |                 |   | 784            |   | 657               |   | 3,057                      |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Profit for the year                           |  |                      |   |                            |   |                                   |   |                 |   |                |   | 659               |   | 659                        |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Gains/(losses) on cashflow hedges, net of tax |  |                      |   |                            |   |                                   |   | (12)            |   |                |   |                   |   | (12                        | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Currency translation adjustment               |  |                      |   |                            |   | 19                                |   |                 |   |                |   |                   |   | 19                         |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Total recognised income for the year          |  |                      |   |                            |   | 19                                |   | (12             | ) |                |   | 659               |   | 666                        |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Final dividend previous year                  |  |                      |   |                            |   |                                   |   |                 |   |                |   | (168              | ) | (168                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Appropriation of net income                   |  |                      |   |                            |   |                                   |   |                 |   | 489            |   | (489              | ) |                            |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Interim dividend current year                 |  |                      |   |                            |   |                                   |   |                 |   |                |   | (100              | ) | (100                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Repurchases of shares                         |  |                      |   |                            |   |                                   |   |                 |   | (231           | ) |                   |   | (231                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Share based compensation                      |  |                      |   |                            |   |                                   |   |                 |   | 10             |   |                   |   | 10                         |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Other                                         |  |                      |   |                            |   |                                   |   |                 |   | 28             |   |                   |   | 28                         |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Total direct changes in equity                |  |                      |   |                            |   |                                   |   |                 |   | 296            |   | (757              | ) | (461                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Balance at 31 December 2005                   |  | 230                  |   | 1,421                      |   | (16                               | ) | (12             | ) | 1,080          |   | 559               |   | 3,262                      |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Profit for the year                           |  |                      |   |                            |   |                                   |   |                 |   |                |   | 670               |   | 670                        |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Gains/(losses) on cashflow hedges, net of tax |  |                      |   |                            |   |                                   |   | (9              | ) |                |   |                   |   | (9                         | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Currency translation adjustment               |  |                      |   |                            |   | (1                                | ) |                 |   |                |   |                   |   | (1                         | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Total recognised income for the year          |  |                      |   |                            |   | (1                                | ) | (9              | ) |                |   | 670               |   | 660                        |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Final dividend previous year                  |  |                      |   |                            |   |                                   |   |                 |   |                |   | (173              | ) | (173                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Appropriation of net income                   |  |                      |   |                            |   |                                   |   |                 |   | 386            |   | (386              | ) |                            |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Interim dividend current year                 |  |                      |   |                            |   |                                   |   |                 |   |                |   | (109              | ) | (109                       | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Repurchases of shares                         |  | (27                  | ) | (176                       | ) |                                   |   |                 |   | (1,533         | ) |                   |   | (1,736                     | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Share based compensation                      |  |                      |   |                            |   |                                   |   |                 |   | 13             |   |                   |   | 13                         |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Other                                         |  |                      |   |                            |   | 12                                |   |                 |   | 54             |   |                   |   | 66                         |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Total direct changes in equity                |  | (27                  | ) | (176                       | ) | 12                                |   |                 |   | (1,080         | ) | (668              | ) | (1,939                     | )
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|Balance at 31 December 2006                   |  | 203                  |   | 1,245                      |   | (5                                | ) | (21             | ) | 0              |   | 561               |   | 1,983                      |  
|                                              |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  
|(in € millions)                               |  |                      |   |                            |   |                                   |   |                 |   |                |   |                   |   |                            |  

See note 9 for additional details on equity.  £41 WAGES AND SALARIES(No corresponding financial statement number) TNT N.V. does not have any employees. Hence no salary and social
  security costs were incurred. In accordance with IAS19.34 the net defined benefit
  cost shall be recognised in the corporate financial statements of TNT N.V. For
  the pension costs reflected we refer to note 39.  £42 COMMITMENTS NOT INCLUDED IN THE BALANCE SHEET(No corresponding financial statement number) Declaration of joint and several liabilityAs at 31 December 2006 TNT N.V. has issued a declaration of
  joint and several liability for some of its group companies in compliance with
  article 403, Book 2 of the Dutch Civil Code.




Those group companies are: 
    Royal TNT Post B.V.
    TNT Holdings B.V.
    TNT Express Holdings B.V.
    TNT Headoffice B.V. Fiscal unity in the NetherlandsTNT N.V. forms a fiscal unity with several Dutch entities
  for corporation tax purposes. The full list of Dutch entities which are part
  of the fiscal unity is included in the list containing the information referred
  to in article 379 and article 414, Book 2 of the Dutch Civil Code, which is
  filed at the office of the Chamber of Commerce in Amsterdam. In accordance with
  the standard conditions a company and its subsidiaries that form part of the
  fiscal unity are jointly and severally liable for taxation payable by the fiscal
  unity. GuaranteesParental support in the form of a guarantee has been
  provided by TNT N.V. relating to its subsidiary TNT Finance B.V. for a syndicated
  loan (€1 billion), various loan facilities including a €1




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|billion commercial paper programme, €250 million cash pooling credit
      facility and for various international swaps and derivatives association
      (ISDA) agreements.
      In addition, we had issued a guarantee for the syndicated loan entered into
      by our indirect subsidiary TNT Canada Inc. (€222 million). This pertains
      to our discontinued logistics business. As the loan was repaid prior to
      the disposal of the logistics business, TNT N.V. was released of its obligations
      under the guarantee.
      A further guarantee of €23 million was issued for a credit facility
      of an indirect Chinese subsidiary.
      Parental support in the form of a letter of guarantee and a subscription
      letter has been provided by TNT Holdings B.V. to its indirect subsidiary
      TNT Pty. Ltd. in relation to a capital reduction of TNT Pty. Ltd. in 1999.
      Parental support in the form of an indemnity has been provided by TNT N.V.
      to its indirect subsidiary TNT Holdings (UK) Ltd. and its subsidiaries in
      connection with the acquisition of TNT PTY Ltd. in 1996 and the financing
      of this acquisition and as a result of the restructuring of the group in
      the course of 1997 as a direct consequence of this acquisition.£43 SUBSIDIARIES AND ASSOCIATED COMPANIES AT
        31 DECEMBER 2006
        (No corresponding financial statement number)
        The full list containing the information referred to in article 379 and
        article 414, Book 2 of the Dutch Civil Code is filed at the office of
        the Chamber of Commerce in Amsterdam.
        Amsterdam, 26 February 2007Board of ManagementM.P. Bakker (Chairman) 
        C.H. Van Dalen 
        H.M. Koorstra 
        M.C. LombardSupervisory BoardJ.H.M. Hommen (Chairman) 
        R.J.N. Abrahamsen 
        J.M.T. Cochrane
        R.  Dahan
        V.  Halberstadt
        G. Kampouri Monnas
        R. King
        W. Kok
        S. Levy
        R.W.H. StombergTNT N.V.
        Neptunusstraat 41-63 
        2132 JA Hoofddorp 
        P.O Box 13000 
        1100 KG Amsterdam 
        The Netherlands |  | 
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OTHER INFORMATION

PAGE LEFT INTENTIONALLY BLANK



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EXTRACT FROM THE ARTICLES OF ASSOCIATION
    ON APPROPRIATION OF PROFIT Under our current articles of association, a dividend
    of 7% is to be paid first on the special share (article 35, paragraph 1).
    The dividend specified in article 35, paragraph 1 will then be paid on the
    preference shares B if outstanding. Subject to the approval of our Supervisory
    Board, our Board of Management will determine which part of the profit remaining
    after payment of dividend on the special share (and any preference shares
    B) will be transferred to the reserves (article 35, paragraph 2). The remaining
    profit will be distributed as dividend on ordinary shares (articles 35, paragraph
    3). No dividends shall be paid on shares held by us in our own capital (article
    35, paragraph 6). On 17 November 2006, the State of the Netherlands transferred
  the special share in the company to TNT. As part of that transaction we agreed
  not to transfer this share to a third party. As no dividend shall be paid on
  shares held by us, in 2007 no dividend shall be paid on the special share. We
  will propose to convert the special share into an ordinary share as part of
  our amendment to our articles of association changed accordingly at our next
  Annual General Meeting of Shareholders. Preference shares B have not been issued. APPROPRIATION OF PROFITSubject to the adoption of our financial statements, the proposed
    2006 dividend has been set at €0.73 in cash per ordinary share of €0.48
    par value. After adjusting for the interim dividend of €0.26 per ordinary
    share paid out in April 2006, the final dividend will be €0.47 per ordinary
    share. APPROPRIATION OF PROFIT2006Profit attributable to the equity holders of the
      670parentAppropriation in accordance with the articles of association:Reserves adopted by the Board of Management
      (378
      )and approved by the Supervisory Board(article 35, par.2)Dividend on ordinary shares
      292Interim dividend paid
      109Final dividend
      183(in € millions) SPECIAL CONTROL RIGHTS UNDER THE
    ARTICLES OF ASSOCIATION On 17 November 2006, the special share held by the State of
    the Netherlands was transferred for free to TNT. As per that date, the special
    control rights attached to this share also reverted to the company. The conversion
    of the special share is part of the amendment to the articles of association
    that will be proposed to the annual general meeting in 2007. We agreed not
    to exercise the rights attached to the special share in the interim period.




GROUP COMPANIES OF TNT N.V.The list containing the information referred to in article
    379 and article 414 of Book 2 of the Dutch Civil Code is filed at the office
    of the Chamber of Commerce in Amsterdam. SUBSEQUENT EVENTSFor information relating to subsequent events reference is
    made to note 36.




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| | Within
        TNT, even though 
        you may not know the 
        individual personally, 
        you can still connect. 
        We all speak the TNT 
        language.
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| | TNT
      EXPRESS INDIA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
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| | Unless
      you want to come away with your head reeling, dont get drawn into
      a detailed conversation with Raj about his job. He is likely to bowl you
      over with computer terms that if you are not in his line of business will
      sound like double Dutch. He clearly knows his stuff. Yet unlike many IT
      specialists, he is also a people person and has a natural charm and understanding
      character that must be the secret to his success. Within three months, in
      a project known simply as Domestic, Raj and his team have connected 63 offices
      across India to create what is now the largest IT network in a TNT country.
      Dont ask about the details!                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
| | Raj: I have
        been fascinated by technology since I was young and can remember trying
        to work out how things like telephones work. You can maybe imagine that
        being in my current position is something of a dream job! When I started
        at TNT India in September 97, we had just 40 PCs and a handful of
        printers. We now have some 1,400 computers and 800 printers, spread across
        63 locations, all connected seamlessly on a hybrid network.
      My greatest
        challenge so far started in January 2006. Before the launch of Domestic,
        we had what we call a distributed network, whereby each of our 19 offices
        had its own local network and services. First step was to set up a data
        centre in Bangalore, where we house all the servers for our CITRIX, Lotus
        Notes and Quantum systems. This was done with help |  | of a project team
        from TNTs ICS centre in Atherstone, while I controlled the rollout
        centrally from Bangalore. Following strict project planning, weekly reviews
        and a contingency plan, we set up the IT systems in the outlying depots.
        With six people, we managed to get all 63 depots completed within four
        months.
      The key to
        the success of the implementation was threefold in my eyes. You have to
        ensure your coordination is tight. You have to provide precision planning
        with contingencies. And you have to listen and understand those you are
        working with  connect with them. Even IT is a people game in the
        end. Just for the record  were in for a fun time again. We
        have just purchased a company called Speedage and they have over 500 offices.
        Were definitely going to need more equipment!
      PHANI RAJTNT Express India,
        Manager - Information Systems 
        34 years old, married, 1 child | 
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POSTAL REGULATION AND CONCESSION INTERNATIONAL POSTAL REGULATIONUniversal Postal UnionThe Universal Postal Union (UPU) is a specialised agency within
    the United Nations framework. It is responsible for the regulation of cross-border
    postal services. Practically all nations are members of the UPU. The common
    rules applicable to cross-border postal services are laid down in the UPUConvention and its regulations. In the Convention, the
    UPU established an international system for mutual payments for the delivery
    of cross-border letter mail, known as the terminal dues system. The purpose
    is to compensate the destination countrys public postal operator for
    delivering international letter post. A different compensation scheme with
    similar purposes exists for parcel mail. Since 1 January 2006 a new terminal dues system applies. Under
  the new system Target countries (previously Industrialised
  Countries) will pay each other country-specific rates linked to domestic
  post charges. Over the next years the current percentage of the domestic 20
  grammes tariff, 60%, will be increased gradually to 68% in 2009. Transition
  countries (previously Developing Countries) will continue to pay
  each other and Target countries a fixed kilogramme rate according
  to a per item and per kilogramme formula based on world average costs and on
  a world average weight. Transition countries are expected to move towards the
  Target system before 2014, at which time all exchanges will be based on country-specific
  compensation. ReimsMost European postal operators view the UPU target terminal
  dues system as inadequate for these purposes. As a consequence a significant
  majority of them are party to the separate, multilateral REIMS II
  agreement where terminal dues are related to a higher percentage of domestic
  tariffs, and to a certain extent to service quality as well. We have not entered
  into the REIMS II agreement because we feel it does not contain a strong incentive/penalty
  system that would guarantee improvement of the quality of service. Instead,
  we have concluded commercially oriented bilateral agreements with most of the
  European postal operators. The REIMS II parties plus TNT and Royal Mail have
  entered into negotiations with a view to concluding a market oriented REIMS
  III agreement. These negotiations are very complicated and have not been
  finalised. TNT Post is currently negotiating bilateral agreements for 2007. EU postal regulationThe current EU Postal Directive 2002/39/EC, amending Directive
  97/67/EC (EU Postal Directive) with regard to the further opening to competition
  of community postal services, sets out a harmonised set of minimum obligations
  for the universal postal service (mandatory postal services) regarding service
  levels, rates, and cost and revenue accounting principles, as well as quality
  of service standards, with which all member states, including the Netherlands,
  must comply.




The EU Postal Directive also defines the maximum scope of postal
  services the EU member states are permitted to reserve for national public postal
  operators (reserved postal services). Member states are permitted to reserve
  postal services for domestic and cross-border mail. As of 1 January 2006 this
  reservation is limited to a weight of up to 50 grammes per item of correspondence
  or a price of less or equal to two and a half times the public tariff for an
  item of correspondence in the first weight step of the fastest category, i.e.
  items of correspondence weighing no more than 20 grammes. To the extent necessary
  to ensure the provision of universal service, outgoing cross border mail and
  direct mail may continue to be reserved within the same weight and price limits. The current EU Postal Directive delays full liberalisation
  of the EU postal market until at least 2009. This is depending on approval,
  by the Council of Ministers and the European Parliament, of the proposal for
  a new Postal Directive of the European Commission. POSTAL REGULATION IN THE NETHERLANDSDue to the importance of postal services to society, regulation
  is a significant factor in our mail business. The mandatory undertaking of certain
  postal activities in the Netherlands, some of which are exclusive to us, has
  been assigned to us in the Dutch Postal Act. In the Netherlands, the key legislation regulating our mail
  activities is the Dutch Postal Act. The Dutch Postal Act requires TNT to perform
  the mandatory postal services in the Netherlands and it grants us exclusive
  rights to provide some of these services, the reserved postal services. In connection with the Dutch Postal Act there is the parliamentary
  Postal Decree, which specifies the services that constitute the mandatory postal
  services and defines the scope of the reserved postal services. The combination
  of these mandates and exclusive rights are commonly called the Postal
  Concession. The Postal Concession is performed by our subsidiary Royal
  TNT Post B.V. Furthermore, there is a General Postal Regulations Decree,
  which specifies our obligations regarding the performance of mandatory postal
  services and the transparency of the financial accounting of these services according
  to the EU Postal Directive. The responsibility for supervising our performance of the mandatory
  postal services lies with an independent Supervisory Authority for Post and
  Telecommunications established by the government, which is commonly called by
  its Dutch acronym OPTA. The Minister of Economic Affairs is responsible for
  postal regulation and policy. On 16 December 2004 the Minister of Economic Affairs discussed
  his vision for the Dutch postal market with parliament. During this meeting
  parliament gave its support to the vision, which addressed issues such as full
  liberalisation, the scope of the mandatory postal services and tariff regulation.
  The vision for the Dutch postal market has been translated into the proposal
  for a new Dutch Postal Act that passed the Dutch government on 13 April 2006.
  The Dutch governments policy contains the following elements:


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
      full liberalisation of the Dutch
        postal market as of 1January 2008 (conditional on full market liberalisation
        in the United Kingdom and Germany, i.e. the condition of a level playing
        field),
      we will be required to perform
        the mandatory postal services in the Netherlands for an undefined period,
      the Postal Act and the scope
        of the mandatory postal services can be evaluated every four years,
      rates for mandatory postal services
        will be regulated using a price cap system linked to infiation,
      non-discrimination will be applicable
        to our mail services. Competitors and customers must be treated equally
        in terms of rates and conditions, and
      the OPTA will be charged with
        monitoring the mandatory services and non-discrimination requirements. We are pleased that the policy regarding liberalisation is
  conditional on the future de facto liberalisation in the United Kingdom and
  Germany. Further liberalisation took place in the United Kingdom as per 1 January
  2006 and is scheduled to take place in Germany in 2008. The decision by the Dutch government to fully liberalise the
  Dutch postal market on 1 January 2008 and the proposal for a new Dutch Postal
  Act still await approval of parliament. The dossier will probably be discussed
  during the course of 2007. THE POSTAL CONCESSIONMandatory postal servicesThe domestic mandatory postal services mainly consist of the
  conveyance against payment of standard single rates of the following postal
  items: 
    letters (including reply items) and printed
      matter with a maximum individual weight of two kilogrammes,
    postal parcels with a maximum individual weight
      of 10 kilogrammes, and
    registered, registered insured and registered
      value declared items. In addition, bulk mail of letters up to an individual weight
  of 50 grammes (100 grammes prior to 1 January 2006), which are conveyed against
  separately agreed rates, are part of the mandatory postal services. Mandatory
  postal services also cover rental of P.O. boxes. We are not required to provide the delivery of bulk printed
  matter such as advertising, magazines and newspapers, the delivery of bulk letters
  with an individual weight above 50 grammes (100 grammes prior to 1 January 2006)
  and unaddressed mail items. For international inbound and outbound mail, based on the Dutch
  Postal Act and in accordance with the rules of the UPU, mandatory postal services
  mainly comprise conveyance against payment of both postal items at standard
  single rates and of bulk mail items at separately agreed rates with a maximum
  individual weight of two kilogrammes and of postal parcels with a maximum individual
  weight of 20 kilogrammes. In addition, mandatory postal services cover the postal
  services regulated by the UPU.




Regulatory conditions for the provision of mandatory postal
  servicesRegarding mandatory postal services the General Postal Regulations
  Decree imposes various regulatory conditions on us with respect to service provision,
  tariffs, cost and revenue accounting, financial administration and reporting.
  Other than the mandatory postal services, none of our postal services is subject
  to governmental control. According to the Dutch Postal Act, article 2d, we are obliged
  to give our competitors entrance to our P.O. boxes. This service has to be delivered
  against reasonable, objectively justifiable and non-discriminatory conditions
  and remunerations. To date these conditions and remunerations are the negotiated
  results between parties. With respect to service levels, the General Postal Regulations
  Decree requires us to provide a level of service that complies with modern standards,
  to provide nationwide services and to perform a delivery round every day, except
  for Sundays and public holidays. We are required to deliver not less than 95%
  of all domestic letters the day after the day of posting, not including Sundays
  and public holidays. We are required to maintain a network of service points
  (post offices and agents) for the access of the general public to the services.
  With respect to rates and conditions, we are required to set rates and associated
  conditions that are transparent, non-discriminatory and uniform. However, we
  may grant volume discounts for items of correspondence and negotiate specific
  prices and conditions with high volume users. We are required to submit proposed
  rate changes to OPTA, which has to evaluate whether the proposed changes are
  in accordance with the price cap system. The price cap system measures tariff developments in two different
  baskets of services, a total basket and a small users basket.
  The total basket comprises domestic mandatory postal services provided to all
  customers. The small users basket comprises a selection of the total basket
  of domestic mandatory postal services that is representative for consumers and
  small business users. The price cap system uses a weighing factor for each service
  in these baskets. The levels of the indices for both baskets are not to exceed
  the official national index of wages for employees in the market sector. The development of the indices from the base year of 1989 is
  illustrated below:


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The price cap system was last evaluated in 2002. Since an earlier
  decision of the Ministry of Economic Affairs to freeze the tariffs controlled
  by the price cap system was declared void in June 2004, we have remained able
  to amend the individual rates for mandatory postal services, subject to the
  provisions of the tariff control system. However, in view of the wider importance
  of the adoption of an integral and balanced vision for the postal market as
  submitted to parliament, we announced our intention not to increase the price
  of a stamp for consumers from the present level of €0.39 for the years
  2004, 2005 and 2006. On 30 August 2006 we announced to amend the TNT Post rates
  on 1 January 2007. The rate for single-item domestic letters up to 20 grammes
  will be increased to €0.44. This will be the first rate increase for single-item
  mail in five and a half years. We intend not to increase €0.44 rate again
  until 2010. The newly announced rates (12.1% average increase) remain within
  the inflation rate of 12.5% on aggregate since 2001. The rate increases fall
  within the maximum levels allowed by law, which has been confirmed by OPTA. Reserved postal servicesUnder the Dutch Postal Act and the Postal Decree, the reserved
  postal services include the following exclusive rights: 
    the conveyance of domestic and inbound international
      letters with a maximum individual weight of 50 grammes (100 grammes prior
      to 1 January 2006) at a rate of less than two and a half times (three times
      prior to 1 January 2006) the standard single rate (€0.39) for the lowest
      weight class of 20 grammes,
    the exclusive right to place letter boxes
      intended for the public alongside or on public roads, and
    the exclusive right to issue postal stamps
      and imprinted stamps bearing the likeness of the monarch and/or the word
      Nederland. These exclusive rights do not extend to courier services or
  services where the letters are delivered at the rate of more than two and a
  half times the standard single rate. The exclusive rights also do not extend
  to the conveyance of parcels, letters weighing in excess of 50 grammes and printed
  materials such as advertising, newspapers and magazines. In addition, the exclusive
  rights do not extend to the conveyance of letters by a business to its own customers. Accounting and other financial obligationsOur obligations on reporting include the establishment of an
  annual report on our performance of the mandatory postal services, providing,
  among other things, an overview of the financial results related to the mandatory
  postal services. This report must be reviewed by an independent auditor appointed
  by OPTA. Our financial accounting obligations require us to maintain
  separate financial accounts within our internal financial administration for mandatory
  postal services. This separate accounting must be broken down into reserved
  postal services and other mandatory postal services and must be separated from
  the accounting of our other activities. Every year, we must submit to OPTA a
  declaration of an independent auditor, appointed by OPTA, that our financial
  accounting system complies with these obligations. This declaration has to be
  published by OPTA in the Staatscourant.




Underlying this accounting system and the financial reports
  to OPTA is a system for allocating costs and revenues to the different types
  of services. This system complies with the accounting rules laid down in the
  EU Postal Directive and is approved by OPTA for the period ending 31 December
  2006. The approval of OPTA was officially published in the Staatscourant
  on 14 July 2004. The full text of the description of the allocation system is
  published in Dutch by OPTA on their website, www.opta.nl. Value added tax on postal servicesAt present, we are not allowed to charge value added tax on
  postal items forming part of the mandatory postal services. The flip side of
  this is that for mandatory postal services we cannot deduct the VAT amounts
  paid on our purchases of services and goods related to the mandatory services.
  We are required to charge VAT on all services not included in the mandatory
  services, i.e. the services in competition with other operators. Competitors
  are required to charge VAT on those items as well. Therefore, there is a level
  playing field for competitors and our company on these services. Public procurementPublic procurement is the purchase of goods, services and public
  works by governments. Public sector procurement must follow transparent, open
  procedures ensuring fair conditions of competition for suppliers. At this moment
  we have no obligation to tender resulting from any public procurement regulation. On 2 February 2004, the EU adopted a package of amendments
  to simplify and modernise its public procurement directives. Those directives
  impose EU-wide competitive tendering for public contracts above a certain value
  and transparency and equal treatment for all tenders to ensure that the contract
  is awarded to the tender offering best value for money. The new directive 2004/17/EC
  of 31 March 2004, coordinating the procurement procedures of entities operating
  in the water, energy, transport and postal services sectors also applies to
  certain postal and non-postal activities that are not exposed to competition.
  However, the directive leaves to the European member states the possibility
  of postponing the application of the directive on postal services until 1 January
  2009. The Netherlands has exercised this option. We will therefore not be subject
  to the directive in the Netherlands until 1 January 2009. TRANSPORT LAWThe transport activities of TNT Express are mainly regulated
  from a liability and security point of view, in addition to the regulation applying
  to TNTs specific means of transport and their use (road vehicles or aircraft
  mainly). The liability of TNT Express in the context of international
  transport of goods by road is governed by the CMR Convention. Similar liability
  rules are provided for under the Warsaw and Montreal Conventions for international
  transport of goods by air. National laws, which differ from one country to another,
  regulate this question with respect to domestic transport of goods. The common
  feature of this legislation is to limit the liability of a carrier in case of
  loss or damage to goods during their transport.


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TNT Express also needs to comply with security related regulations,
  which may entail the performance of (X-ray) screening of the transported goods
  (in case of transport by air) or the compliance with specific transport conditions
  (in terms of accompanying documentation and handling) in case of carriage of
  dangerous goods. COMPETITION LAWOur businesses are subject to competition rules in the jurisdictions
  in which they operate. The most relevant rules stem from: European competition lawThe Court of Justice of the European Community has explicitly
  confirmed that the rules of EU competition law also apply to the national mandatory
  postal services of the EU member states. The European Community published a
  notice in 1998 describing the application of competition rules to the postal
  sector and on the assessment of certain state measures. In particular, we are
  subject to the competition rules contained in articles 81 and 82 of the EC Treaty
  and to preventative control of mergers and acquisitions as regulated in the
  EC Merger Control Regulation. Article 81 prohibits collusion between competitors
  that may affect trade between member states and which has the object or effect
  of restricting competition within the EU. Article 82 prohibits any abuse of
  a dominant position within a substantial part of the EU that may affect trade
  between member states. National competition authorities and national courts
  have been empowered to apply articles 81 and 82 in full, in close operation
  with the European Commission in order to ensure the effective and uniform enforcement
  of these competition rules. We are also subject to the competition rules in the Agreement
    on the European Economic Area, which corresponds to the rules of EU competition
    law. The EEA rules for competition are enforced by the European Commission
    and the EFTASurveillance Authority. Dutch competition lawThe services we provide in the Netherlands, including the mandatory
  postal services, fall within the scope of the Dutch Competition Act.The Dutch Competition Act stipulates a similar structure and
  set of rules as the rules of EU competition law on the prohibition of cartels,
  the prohibition of abuse of a dominant position and the preventive control on
  mergers and acquisitions. Compliance with the Dutch Competition Act is monitored
  by the Netherlands Competition Authority.


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| | TNT Innights
        
        domestic experience 
        and performance are 
        a great basis for an 
        individual Suzuki Europe 
        logistics solution.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | SUZUKI                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | Suzuki
      has been with TNT Germany for over 15 years, with initial contracts signed
      as far back as 1989. More than ninety percent of business with the TNT Group
      is with Innight, TNTs specialised service for late pick-up/next morning
      delivery. Working on just-on-time timetabling, TNT holds keys for Suzuki
      dealers around Germany, allowing them access to their premises. TNT staff
      collects late shipments, some as late as 9 p.m., for early delivery the
      next day by 8 a.m. TNT also takes away returns and supports the returnable
      box system. Suzukis next step with TNT Innight is rolling out the
      equivalent of the German service around Europe. | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | Kai Wrede: In
        selecting TNT, our choice was driven by a number of factors, the most
        important of which were service levels, pricing and the fact that TNT
        offers highly specialised services. Late pickup is critical to our operations
        as we run on extremely tight schedules and need a mix of night and day
        services depending on dealer type. TNTs track record and reputation
        in B2B also played a key role, with good past performance on the German
        market, a solid financial basis and the skills and willingness to support
        our pan-European activities for our future strategy                                                            |  | Between 2000
        and 2004, costs considerations forced us to seek another solution. However,
        after issues with invoicing, the track-and-trace system and the associated
        unnecessary work with the alternative supplier, we returned our business
        to TNT. If there is anything I would still like to see improved, it lies
        in further harmonising all TNT products and systems. We would like to
        set up a communications pyramid with local TNT contacts for each Suzuki
        Distributor and Dealer in their respective country, supplemented by a
        single TNT Europe contact for all the services we use.
      The coming
        time promises to be interesting and a test of TNTs system. In a
        project that spans all our European dealerships, we plan to amalgamate
        our local logistics systems to form a single, virtual stock. I will be
        interested to see how TNT handles the challenge. So far though, as our
        service record with TNT in Germany shows, we have been highly satisfied.
        This is greatly due to the TNT staff who offer a great response for daily
        issues and are friendly, interested and always open to new ideas.
      MR KAI WREDEActing General Manager
        Parts & Logistics 
        Suzuki International Europe GmbH | 
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GENERAL We aim to explain our strategy, business developments and financial
  results to investors. Our chief financial officer has the principle responsibility
  for investor relations with the active involvement of our chief executive officer.
  Our investor relations department organises presentations for analysts, institutional
  and retail investors, which can be viewed on our website. Our policy is to provide all shareholders and other parties
  in the financial markets with equal and simultaneous information about matters
  that may influence the share price. The contacts between the Board of Management
  on the one hand and press and analysts on the other are carefully handled and
  structured, and the company will not engage in any acts that compromise the
  independence of analysts in relation to the company and vice versa. Briefings
  on quarterly results are given either via group meetings or teleconference and
  are both accessible by telephone or via our website. Briefings are similarly
  given to update the market after each quarterly announcement. We may hold briefing
  meetings with institutional shareholders to ensure that the investing community
  receives a balanced and complete view of the companys performance and
  the issues faced by the business. In addition, we communicate with all of our
  shareholders and investors through the publication of the annual report, general
  meetings of shareholders, newsletters, press releases and our website. Meetings
  of analysts can by way of webcasting at all times be reviewed by shareholders.
  Our website provides all relevant information with regard to dates of analyst
  meetings and procedures concerning webcasting. Analysts reports and valuations
  are not assessed, commented upon or corrected other than factually, by the company.
  For further information visit our corporate website at group.tnt. com. We do not pay any fee(s) to parties for the carrying out of
  research for analysts reports or for the production or publication of
  analysts reports with the exception of credit rating agencies. Our Board of Management has adopted investor relations and
  media guidelines with which all Board of Management members must at all times
  abide unless explicitly exempted by the chief executive officer.Our contacts with the capital market are dealt with by the
  members of the Board of Management, our investor relations professionals, and
  from time to time other TNT personnel specially mandated by the Board of Management. Our website provides all information that is required to be
  published. Our website will also give access to shareholders circulars
  required for any approvals sought from the general meeting of shareholders.
  We commit in this respect to shareholders circulars that in form and substance
  will be similar to the standard that applies to similar instruments issued by
  FTSE 100 companies. Our website provides a summary of the resolutions of shareholders
  meetings. The votes cast in relation to all resolutions are disclosed to the
  persons attending the meeting and the results of the voting are published at
  our website.




INFORMATION ON OUR LISTINGS, SHARE PERFORMANCE AND DIVIDEND STOCK EXCHANGE AND SHARE PRICE INFORMATION Since 29 June 1998, following our demerger from Royal KPN N.V.,
  our ordinary shares have been listed on the Amsterdam Stock Exchange, which
  was renamed Euronext Amsterdam in connection with the merger of the Amsterdam,
  Brussels and Paris stock exchanges in 2000, and the New York Stock Exchange. As per 21 March 2006 we ended our listing on the London Stock
  Exchange. We ended our listing on the Frankfurt Stock Exchange on 1 June 2006. The principal market for trading in our ordinary shares is
  Euronext Amsterdam. TNT is included in the AEX index, which consists of the
  top 25 companies in the Netherlands, ranked on the basis of their turnover in
  the stock market and free float. We have an unrestricted sponsored American
  Depositary Receipt (ADR) facility with Citibank N.A. as depositary. The ADRs
  evidence American Depositary Shares (ADSs), which represent the right to receive
  one ordinary share. The ADSs trade on the New York Stock Exchange under the
  symbol TNT (changed from TP as of 4 December 2006). The following tables set forth the high and low closing prices
  for our ordinary shares on Euronext Amsterdam and the ADSs on the New York Stock
  Exchange for the periods indicated:




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|            |                 |  |               | 
|----------- | --------------- |  | ------------- | 
|            | Euronext (in €) |  | NYSE (in US$) | 
|            |                 |  |               | 
|            | High            |  | Low           | 
|            |                 |  |               | 
|2002        | 25.08           |  | 14.98         | 
|            |                 |  |               | 
|2003        | 19.34           |  | 11.71         | 
|            |                 |  |               | 
|1st Quarter | 16.00           |  | 11.71         | 
|            |                 |  |               | 
|2nd Quarter | 15.74           |  | 13.53         | 
|            |                 |  |               | 
|3rd Quarter | 17.62           |  | 14.83         | 
|            |                 |  |               | 
|4th Quarter | 19.34           |  | 16.11         | 
|            |                 |  |               | 
|2004        | 20.15           |  | 16.22         | 
|            |                 |  |               | 
|1st Quarter | 19.34           |  | 16.22         | 
|            |                 |  |               | 
|2nd Quarter | 18.95           |  | 17.12         | 
|            |                 |  |               | 
|3rd Quarter | 19.80           |  | 17.74         | 
|            |                 |  |               | 
|4th Quarter | 20.15           |  | 18.65         | 
|            |                 |  |               | 
|2005        | 26.40           |  | 19.40         | 
|            |                 |  |               | 
|1st Quarter | 22.45           |  | 19.65         | 
|            |                 |  |               | 
|2nd Quarter | 22.55           |  | 20.32         | 
|            |                 |  |               | 
|3rd Quarter | 21.94           |  | 19.91         | 
|            |                 |  |               | 
|4th Quarter | 26.40           |  | 19.40         | 
|            |                 |  |               | 
|2006        | 32.62           |  | 26.30         | 
|            |                 |  |               | 
|1st Quarter | 28.57           |  | 26.30         | 
|            |                 |  |               | 
|2nd Quarter | 31.00           |  | 26.64         | 
|            |                 |  |               | 
|3rd Quarter | 30.27           |  | 27.04         | 
|            |                 |  |               | 
|4th Quarter | 32.62           |  | 29.77         | 
|            |                 |  |               | 
|           
|

|                                    |                 |  |               | 
|----------------------------------- | --------------- |  | ------------- | 
|                                    | Euronext (in €) |  | NYSE (in US$) | 
|                                    |                 |  |               | 
|                                    | High            |  | Low           | 
|                                    |                 |  |               | 
|2006                                |                 |  |               | 
|                                    |                 |  |               | 
|July                                | 28.28           |  | 27.04         | 
|                                    |                 |  |               | 
|August                              | 29.35           |  | 27.59         | 
|                                    |                 |  |               | 
|September                           | 30.27           |  | 28.76         | 
|                                    |                 |  |               | 
|October                             | 31.23           |  | 29.77         | 
|                                    |                 |  |               | 
|November                            | 32.38           |  | 30.36         | 
|                                    |                 |  |               | 
|December                            | 32.62           |  | 31.23         | 
|                                    |                 |  |               | 
|2007                                |                 |  |               | 
|                                    |                 |  |               | 
|January                             | 36.08           |  | 32.56         | 
|                                    |                 |  |               | 
|February (through 22 February 2007) | 34.99           |  | 34.38         | 
|                                    |                 |  |               | 



Average daily volume (in shares) in 2006 was as follows: VOLUMES
      2006
      
      20051st Quarter
      1,968,426
      
      1,491,9622nd Quarter
      2,127,333
      
      1,579,4833rd Quarter
      1,712,878
      
      2,491,0564th Quarter
      2,112,745
      
      2,486,541 The highest closing price during 2006 was €32.62 on 19
  December, and the lowest €26.30 on 13 January. A total of approximately
  21.5 million shares in the form of American Depositary Shares (ADSs) were traded
  on the New York Stock Exchange, compared with approximately 20.5 million in
  2005.




Since 4 January 1999, our ordinary shares have traded on Euronext Amsterdam
    in euro. Fluctuations in the exchange rate between the euro and the US dollar
    will affect the US dollar-equivalent of the euro price of our ordinary shares
    on Euronext Amsterdam and, as a result, will affect the market price of our
    ADSs in the United States. See chapter 10, page 80.




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The following tables set forth the noon buying rates in the
    City of New York for cable transfers as certified by the Federal Reserve Bank
    of New York for the euro. EXCHANGE RATESUS$ per €1
      
      High
      
      Low
      
      Average rate 12002
      
      1.0485
      
      0.8594
      
      0.94512003
      
      1.2597
      
      1.0361
      
      1.14112004
      
      1.3625
      
      1.1801
      
      1.24782005
      
      1.3476
      
      1.1667
      
      1.24002006
      
      1.3327
      
      1.1860
      
      1.25631Average
        of the noon buying rates on the last day of each month during the year.  US$ per €1
      High
      
      Low2006July
      1.2822
      
      1.2500August
      1.2914
      
      1.2735September
      1.2833
      
      1.2648October
      1.2773
      
      1.2502November
      1.3261
      
      1.2705December
      1.3327
      
      1.30732007January
      1.3286
      
      1.2904February (through 22 February 2007)
      1.3140
      
      1.2933 SHARE PERFORMANCE 2006
      
      2005Stock price (in €)High
      32.62
      
      26.40Low
      26.30
      
      19.40Close
      32.58
      
      26.40Earnings per outstanding share
      159.3
      
      145.0(in € cents)Dividend (in € cents)
      73.01
      
      63.0Dividend pay-out ratio (as
        a %)
      45.8
      
      43.4Dividend yield
      2.24
      
      2.39(based on closing rate for the year)P/E Ratio
      20.45
      
      18.21Number of issued ordinary shares
      422,767,600
      
      479,999,999Stock market capitalisation
      13,774
      
      12,672(in € millions)Adjusted stock market
      12,779
      
      11,794capitalisation 2(in
        € millions)1
      Estimate
        based on outstanding number of ordinary shares per 26 February 2007.2
      Adjusted
        for shares held by the company for cancellation.




Our relative performance to the Euronext Amsterdam (AEX) at
    closing prices during 2006 (AEX index rebased to our company):  Our relative performance to the Euronext Amsterdam (AEX) at
  closing prices since listing in 1998 (AEX index rebased to our company):  Our ordinary shares are held worldwide in the form of bearer
  shares, non-ADS registered shares and ADSs. Outside the United States, ordinary
  shares are held primarily in bearer form. In the United States, ordinary shares
  are held primarily in the form of ADSs. Only bearer shares are traded on Euronext
  Amsterdam, and only ADSs are traded on the New York Stock Exchange. Since the ordinary shares are in bearer form, the analyses
  of shareholdings by region and investor type are estimates based on the limited
  information available to us through market sources. These estimates as of 31
  December 2006 and expressed as a percentage of total shares outstanding (excluding
  treasury shares) on that date, are:


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The following table indicates the form in which the ordinary
  shares were held as at 22 February 2007. Number of shares
      
      Percentage of outstanding ordinary sharesBearer shares
      405,560,790
      
      95.93%Non-ADS registered shares
      1,603
      
      0.00%ADSs1
      17,205,207
      
      4.07% 1
    Held by approximately 42 holders of record. Since some
      shares are held by brokers and other nominees for their clients, this number
      may not be representative of the actual number of ordinary shares held by
      US residents or of the actual number of US resident benificial holders of
      ordinary shares. In 2006, 511.3 million TNT shares were traded on the Euronext
  Amsterdam market (2005: 518.7 million).




DIVIDEND TNTWe try to meet shareholders return requirements through
  dividends, share repurchases and growth in value of our shares. TNT annually
  pays interim and final dividends in cash. TNT pays cash dividends in euro. Exchange
  rate movements will affect the amounts received by ADS holders on conversion
  by the depositary of such cash dividends. Dividend pay out as a guideline reflects
  about 35% of normalised net income, which is defined as profit attributable
  to the equity holders of the parent adjusted for significant one time
  and special items. This normalising adjustment, in case it would be applied,
  is meant to better reflect the underlying earnings development. There are no legislative or other legal provisions currently
  in force in the Netherlands or arising under the articles of association restricting
  remittance to holders of our securities not resident in the Netherlands. Cash
  dividends payable in euro on our ordinary shares may be officially transferred
  from the Netherlands and converted into any other convertible currency.  *
      Estimate based on outstanding number of ordinary shares
        per 26 February 2007.




INFORMATION ON OUR SHARE CAPITAL AND SHARES

AUTHORISED SHARE CAPITALBy deed of 27 February 2006 our articles of association were
  amended. As of that date our authorised share capital amounts to €864,000,000,
  and is divided into 900,000,000 ordinary shares, one special share, and 899,999,999
  preference shares B of €0.48 nominal value each. ISSUED SHARE CAPITALGeneralFollowing the reduction of our issued share capital by cancellation
  of shares in 2006, our issued share capital currently amounts to €202,928,448.48.
  It is divided into 422,767,600 ordinary shares and one special share of €0.48
  nominal value each. No preference shares have been issued. All of our outstanding
  shares are fully paid and non-assessable. Repurchase of shares/Share buy back programmesThe reduction of our issued share capital to its current amount




was effected on 12 December 2006 following the completion in
  April 2006 of the share buy back programme announced on 6 December 2005. Following
  the sale of our discontinued logistics business, we commenced another buy back
  programme on 6 November 2006 with the intention to cancel the ordinary shares
  acquired through the programme. This programme was completed on 23 January 2007.
  A proposal to cancel the 30,947,707 shares repurchased under the programme will
  be part of the agenda of the annual general meeting of shareholders in 2007.
  Upon adoption the issued share capital may be reduced accordingly. The table below provides information on the shares repurchased
  under the two programmes mentioned above as well as on the ordinary shares repurchased
  under a programme to hedge our obligations under existing share and share option
  plans. The latter programme was announced on 3 May 2006 and completed on 23
  May 2006. We did not repurchase any other shares in 2006.




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|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|------------------------------------------------ | ---------------------------- | ---------- | ----------------------------------- | ----- | ------------------------------------------------------------------------------------------ | ---------- | -------------------------------------------------------------------------------------------------------------------------------------- | --- | 
|REPURCHASED IN:                                  | Number of shares purchased 1 |            | Average price paid per share (in €) |       | Total number of shares purchased as part
        of publicly announced plans or programmes |            | Approximate value of shares that may yet
        be purchased as part of publicly announced plans or programmes (in
        € million) |    
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|Plan announced on 6 December 2005 2              |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 | January                      | 8,182,752  |                                     | 26.79 |                                                                                            | 17,202,752 |                                                                                                                                        | 550 | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|                                                 | February                     | 6,267,000  |                                     | 27.68 |                                                                                            | 23,469,752 |                                                                                                                                        | 377 | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|                                                 | March                        | 8,665,000  |                                     | 27.68 |                                                                                            | 32,134,752 |                                                                                                                                        | 137 | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|                                                 | April                        | 4,657,170  |                                     | 29.33 |                                                                                            | 36,791,922 |                                                                                                                                        | 0   | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|Plan announced on 3 May 2006 3                   |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 | May                          | 2,700,000  |                                     | 29.34 |                                                                                            | 2,700,000  |                                                                                                                                        | 0   | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|Plan announced on 6 November 2006 4              |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    
|                                                 | November                     | 23,768,386 |                                     | 32.09 |                                                                                            | 23,768,386 |                                                                                                                                        | 237 | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|                                                 | December                     | 3,872,157  |                                     | 32.03 |                                                                                            | 27,640,543 |                                                                                                                                        | 113 | 
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |     | 
|Total number of shares purchased in
        2006 | 58,112,465                   |            | 28.50                               |       |                                                                                            |            |                                                                                                                                        |    
|                                                 |                              |            |                                     |       |                                                                                            |            |                                                                                                                                        |    

|1 | Between 24 May 2006 and 6 November 2006 we purchased no
      shares.                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | This plan to repurchase up to €1 billion worth of
      own shares was expired upon its completion on 19 April 2006.                                                                          
|3 | This plan to repurchase 2.7 million own shares to cover
      our obligation under the existing management option plans and share grants
      was expired upon its completion on 23 May 2006.
|4 | This plan to repurchase up to €1 billion worth of
      own shares was not expired 31 December 2006. The then remaining value of
      €113 million was repurchased in January 2007.          
|  | The plan expired upon completion on 23 January 2007.                                                                                                                                          



For further information on the repurchase of shares in 2006
    see also note 9 to the financial statements. On 26 February 2007 we announced a new share repurchase programme
  of up to €400 million to start as soon as possible after the annual general
  meeting of shareholders on 20 April 2007. The programme follows the completion
  of the sale of our freight management business. It is our intention to cancel
  the ordinary shares acquired through the repurchase programme. Ability of the company to acquire its own sharesIn order to execute share buy back programmes as described
  above the company must be allowed to acquire its own shares. Under Dutch law
  and our articles of association, we may acquire our own shares, provided that
  they are fully paid-up. In addition, if the shares are acquired for consideration,
  the following conditions apply: 
    our shareholders equity less the payment
      required to acquire the shares may not fall below the sum of the paidup
      capital and any reserves required by Dutch law or under the articles of
      association, and
    after the share acquisition, we may not hold
      shares with an aggregate nominal value exceeding one-tenth of our issued
      share capital. The acquisition of shares in our own capital may be effected
  by a resolution of the Board of Management, which resolution is subject to the
  approval of the Supervisory Board. Under our current articles of association,
  an acquisition that amounts to more than 1% of the issued capital of ordinary
  shares is subject to the approval of both the Supervisory Board and the holder
  of the special share. Except as set out below, the Board of Management requires prior
  authorisation by the general meeting of shareholders to acquire shares in the
  company for consideration. This authorisation may be valid for a period of no
  more than 18 months from the date of the meeting and must specify:





    the number of shares that may be acquired,
    the manner in which shares may be acquired,
      and
    the price limits within which shares may be
      acquired. On 20 April 2006, the annual general meeting of shareholders
  extended the then-current authority of the Board of Management for another period
  of eighteen months to end on 20 October 2007. Authorisation by the general meeting of shareholders is not
  required if our own shares are acquired for the purpose of transferring those
  shares to TNT employees pursuant to any arrangements applicable to such employees. Reduction of issued capital in generalCancellation of shares following a repurchase is one of the
  ways to reduce the issued capital. Our issued share capital may also be reduced
  by way of a reduction of the nominal value of our shares by amendment of our
  articles of association. The general meeting of shareholders is the body to
  resolve to a reduction of our issued capital. Under our articles of association,
  such resolution may be taken only upon a proposal of the Board of Management
  that has been approved by the Supervisory Board. The latter requirement is more
  stringent than is required by Dutch law. Increase of issued capital by issuance of shares/ pre-emptive
  rightsOur Board of Management has been designated as the body competent
  to issue shares in our company and grant rights to subscribe for ordinary shares,
  including options and warrants. Under our current articles of association, that
  resolution is subject to the approval of both the Supervisory Board and the
  holder of the special share. The scope and duration of this authority of the Board of Management
    is determined by the general meeting of shareholders. Under our articles of
    association the scope relates to all shares in our authorised share capital
    that have




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not been issued, and duration of the authority shall be for
    a period of five years at most. On 20 April 2006, the annual general meeting of shareholders
    extended the then-current authority of the Board of Management for another
    period of eighteen months to end on 20 October 2007. Therefore, ordinary shares
    up to a maximum of 10% of the issued share capital may be issued by resolution
    of the Board of Management. An additional 10% of the issued share capital
    may be issued that way when a share issue takes place in relation to a merger
    or acquisition. The scope of the authority to issue preference shares B was
    not limited.Extension of this authority may also be effected by amending our
    articles of association to that effect. If no extension is given, the issue
    of shares or granting of rights to subscribe for ordinary shares requires
    a resolution of the general meeting of shareholders. Such resolution may only
    be taken upon a proposal of the Board of Management, which proposal requires
    approval of the Supervisory Board and, under our current articles, the holder
    of the special share. In principle, each holder of ordinary shares has a pre-emptive
    right to any issue of ordinary shares or the granting of rights to subscribe
    for these shares. Holders of ADSs do not qualify as holders of ordinary shares
    in this respect. Shareholders preemptive rights may be restricted or
    excluded by a resolution of the Board of Management, if the Board of Management
    has been designated as body competent to take such resolution. Under our articles
    of association the scope and duration of this authority is identical to the
    scope and duration to issue shares and grant rights to subscribe for ordinary
    shares discussed above. When vested, the authority to exclude or restrict
    preemptive rights terminates on the date of termination of the authority of
    the Board of Management to issue shares. OTHER CHARACTERISTICS OF OUR SHARESNone of our ordinary shares is subject to any: 
      redemption provisions,
      sinking fund provisions,
      change in control provisions, or
      discriminatory provisions against any of
        our shareholders as a result of owning a substantial number of shares. INFORMATION ON TAXATION FOR SHAREHOLDERS OR HOLDERS OF
    ADSs RESIDENT IN THE US The following is a summary of the material Dutch and US tax
    consequences of the ownership of ordinary shares or American Depositary Shares
    (ADSs) by US Holders (as defined below). However, the discussion is limited
    in the following ways: The discussion does not cover you if your functional
    currency is not the US dollar, if you do not hold your ordinary shares or
    ADSs as a capital asset (that is, for investment purposes), or if you have
    a special tax status.The discussion does not cover tax consequences that depend
    upon your particular tax situation in addition to your ownership of the ordinary
    shares or ADSs.




The discussion does not cover you if you are a partner in a
  partnership (or entity treated as a partnership for US tax purposes). If a partnership
  holds ordinary shares or ADSs, the tax treatment of a partner will generally
  depend upon the status of the partners and upon the activities of the partnership.The discussion is based on current law. Changes in the law may change the
  discussion below.The discussion does not cover state, local or foreign law,
  or gift or estate tax.The discussion does not cover you if you are a holder of (i)
  a substantial interest in the company for Dutch tax purposes (in
  broad terms, non-Dutch entities and individuals who hold or have held directly
  or indirectly, either independently or jointly with certain close relatives,
  at least 5% of the nominal paid-up capital of any class of shares in the company,
  or rights to acquire such shares) or (ii) of 10% or more (by vote or value),
  directly, indirectly or by attribution, of ordinary shares or ADSs in the company
  for US federal income tax purposes. To ensure compliance with requirements imposed by the Internal
  Revenue Service, we inform you that: (i) any US federal tax advice contained
  in this communication (including any attachment) is not intended or written
  by us to be used, and cannot be used, by any taxpayer for the purpose of avoiding
  tax penalties under the Internal Revenue Code; (ii) such advice was written
  in connection with the promotion or marketing of the transactions or matters
  addressed herein; and (iii) taxpayers should seek advice based on their particular
  circumstances from an independent tax advisor. This section applies to you if you are a US Holder. A US Holder
  is: 
    an individual US citizen or resident alien;
    a corporation,or entity taxable as a corporation
      for US federal income tax purposes, that was created under US law (federal
      or state); or
    an estate or trust whose world-wide income
      is subject to US federal income tax. For purposes of this section, a US Holder does not include
  any of the above persons who is also resident (or is deemed resident, or has
  elected to be taxed as resident) in the Netherlands for Dutch tax purposes,
  or is engaged in a trade or business in the Netherlands through a permanent
  establishment. The discussion below assumes that the company is not, and will
  not become, a passive foreign investment company for US federal income tax purposes. DUTCH TAX CONSIDERATIONSDividends distributed by the company are in principle subject
  to tax at source at the current rate of 15%, which will be withheld and remitted
  by the company to the Dutch tax authorities. Under the 1992 US-Netherlands treaty,
  as amended by a 2004 protocol (the Treaty), dividends paid by the company to
  a company that is a resident of the United States and that qualifies for the
  benefits of the Treaty are generally eligible for a reduction of this rate to:
  0%, if the recipient is a US company directly owning shares or ADSs, for a 12-month
  period ending on the date the dividend is declared, that represent at least
  80% of the voting power in the company and certain other conditions are met;
  or 5%, if the recipient is a US company (not qualifying for the 0%




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rate) directly owning shares or ADSs that represent at least
  10 percent of the voting power in the company. US TAX CONSIDERATIONSDividendsThe gross amount of any distributions on the ordinary shares
  or ADSs will be subject to US federal income taxation as a dividend. Any tax
  withheld from the payment must be included in this gross amount even though
  it is not in fact received. Such dividends will not be eligible for the dividends
  received deduction generally allowed to US corporations in respect of dividends
  received from other US corporations. However, for a US Holder that is an individual,
  trust or estate, such amount will generally be treated as qualified dividend
  income that is taxable at a preferential tax rate (currently effective
  through 2010) of 15%, provided that such holder has held the ordinary shares
  or ADSs for a minimum holding period of at least 61 days during a specified
  121-day period. Dividends will be income from sources outside the United States.
  Dividends paid in taxable years beginning after December 31, 2006 will be passive
  category or general category income for
  purposes of computing the foreign tax credit allowable to a US Holder. Sale or Other DispositionUpon the sale or other disposition of ordinary shares or ADSs,
  a US Holder will have taxable gain or loss equal to the difference between the
  amount received by such holder and its tax basis (generally, cost) in the ordinary
  shares or ADSs. Such gain or loss will generally be capital gain or loss from
  sources within the United States, and will be long-term capital gain or loss
  if a US Holder held the ordinary shares or ADSs for more than one year. For
  an individual, trust or estate, the maximum tax rate on long-term capital gain
  is 15% for gains realized through 2010. The deductibility of capital losses
  is subject to limitations. Information Reporting and Backup WithholdingBackup withholding and information reporting requirements may
  apply to certain payments to US Holders of dividends on ordinary shares or ADSs,
  and to the proceeds of a sale or other disposition of ordinary shares or ADSs.
  The company, its agent, a broker, or any paying agent, as the case may be, may
  be required to withhold tax from any payment that is subject to backup withholding
  at a rate of 28% (which rate may be subject to change in the future) of such
  payment if the US Holder fails (a) to furnish the US Holders taxpayer
  identification number, (b) to certify that such US Holder is not subject to
  backup withholding or (c) to otherwise comply with the applicable requirements
  of the backup withholding rules. Certain US Holders (including, among others,
  corporations) are not subject to the backup withholding and information reporting
  requirements, Backup withholding is not an additional tax. Any amounts withheld
  under the backup withholding rules from a payment to a US Holder generally may
  be claimed as a credit against such US Holders US federal income tax liability
  provided that the required information is furnished to the US Internal Revenue
  Service. The above description is not intended to constitute a complete
  analysis of all tax consequences relating to the acquisition, ownership and
  disposition of ordinary shares or ADSs.Holders should consult their tax advisors concerning the tax
  consequences of their particular situations, including the tax




consequences under state, local, foreign and other tax laws,
  and their ability to qualify for the benefits of the Treaty. OTHER INFORMATION PEER GROUP COMPARISONFor comparative reasons, our company has defined a peer group
  of publicly listed companies with activities in the same industries in which
  TNT is active. This peer group consists of the Germany-based company Deutsche
  Post, with activities in mail, express and logistics, the Swiss based Kuehne
  & Nagel International AG, active in freight management and logistics, as
  well as the two United States-based express carriers FedEx and United Parcels
  Services. For this peer group, the comparative performance in terms of total
  shareholder returns in 2006 is charted below.  As of 2007 we intend to remove Kuehne & Nagel from our
  peer group to better reflect TNTs business mix following the divestment
  of the logistics division on 4 November 2006 and the planned divestment of our
  freight management business (formerly Wilson) as announced on 16 November 2006. FINANCIAL CALENDAR FOR 2007 26 February
      Announcement of 2006 fourth quarter and
          2006 full year results20 April
      TNT annual general meeting of shareholders24 April
      Final ex-dividend listing (payment: 2
          May 2007)3 May
      Publication of 2007 first quarter results30 July
      Publication of 2007 second quarter results29 October
      Publication of 2007 third quarter results DOCUMENTS ON DISPLAYSecurities and Exchange CommissionWe are subject to the informational reporting requirements
  of the Securities Exchange Act of 1934 and file reports and other information
  with the SEC. You may examine the reports and other information filed by us,
  without charge, at the public reference facilities maintained by the SEC at
  100 F Street, NE, Washington, D.C., 20549. You may also receive copies of these




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materials by mail from the SECs Public Reference Branch
  at 450 Fifth Street, N.W., Washington, D.C., 20549. For more information on
  the public reference rooms, call the SEC at 1-800-SEC-0330. Our reports and
  other information filed with the SEC are also available to the public from commercial
  document retrieval services and the website maintained by the SEC at http://www.sec.gov.
  Our ADSs are traded on the New York Stock Exchange, and these materials are
  available for inspection and copying at their offices at 20 Broad Street, New
  York, New York, 10005. This annual report on Form 20-F is our annual report for purposes
  of compliance with our New York Stock Exchange obligations to provide an annual
  report. PublicationsShare is a Dutch-language quarterly magazine distributed to
  14,000 individual shareholders and other interested readers in the Netherlands.
  This magazine and other publications can also be viewed and ordered through
  our website. WebsitesFor the latest and archived press releases, corporate presentations
  and speeches, current share price and other company information such as our
  online annual report and interim reports, please visit our corporate website
  at group.tnt. com.We also invite you to visit the sites of our two main trading
  brands: www.tnt.com, www.tntpost.nl. The information on these websites does
  not form part of this annual report.








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|CHAPTER 14 | | | INVESTOR RELATIONS | 194
|          



TNT INVESTOR RELATIONS Through our investor relations activities, we aim to provide
    shareholders with accurate and timely information. We proactively and openly
    communicate with institutions and private investors and with intermediary
    groups such as analysts and financial journalists. In addition to the quarterly, half-yearly and yearly result
    presentations, we maintain regular contacts with financial analysts and retail
    and institutional investors through meetings, roadshows, conference calls
    and company visits. In 2006, we visited investors in major financial cities
    in Europe, the United States and Asia. The annual report on Form 20-F is filed electronically with
    the SEC. Visiting address*Neptunusstraat 41-63 
    2132 JA Hoofddorp 
    The Netherlands Mailing address
    TNT Investor Relations 
    P.O. Box 13000 
    1100 KG Amsterdam 
    The Netherlands Telephone +31 20 500 6455 
    Fax +31 20 500 7515 
    E-mail investorrelations@tnt.com 
    Internet site group.tnt.com *
      This is also our registered office address
        where 
        we may be reached under telephone number: 
        +31 (0)20 500 6000.








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|195 | CHAPTER 15
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|CHAPTER 15 | | | CROSS REFERENCE TABLE TO FORM 20-F | 196
|---------- | - | ---------------------------------- | ---
|          

PART I

|     |                                                             |                                                              
|---- | ----------------------------------------------------------- | -------------------------------------------------------------
|ITEM | REQUIRED ITEM IN FORM 20-F                                  | PAGE NUMBER                                                  
|     |                                                             |                                                              
|     |                                                             |                                                              
|     |                                                             |                                                              
|1    | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISORS | N/A                                                          
|     |                                                             |                                                              
|2    | OFFER STATISTICS AND EXPECTED TIMETABLE                     | N/A                                                          
|     |                                                             |                                                              
|3    | KEY INFORMATION                                             | N/A                                                          
|     |                                                             |                                                              
|     | 3A                                                          | SELECTED FINANCIAL DATA                                      
|     |                                                             |                                                              
|     | 3B                                                          | CAPITALISATION AND INDEBTEDNESS                              
|     |                                                             |                                                              
|     | 3C                                                          | REASONS FOR THE OFFER AND USE OF PROCEEDS                    
|     |                                                             |                                                              
|     | 3D                                                          | RISK FACTORS                                                 
|     |                                                             |                                                              
|4    | INFORMATION ON THE COMPANY                                  |                                                              
|     |                                                             |                                                              
|     | 4A                                                          | HISTORY AND DEVELOPMENT OF THE COMPANY                       
|     |                                                             |                                                              
|     | 4B                                                          | BUSINESS OVERVIEW                                            
|     |                                                             |                                                              
|     | 4C                                                          | ORGANISATIONAL STRUCTURE                                     
|     |                                                             |                                                              
|     | 4D                                                          | PROPERTY, PLANTS AND EQUIPMENT                               
|     |                                                             |                                                              
|5    | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                |                                                              
|     |                                                             |                                                              
|     | 5A                                                          | OPERATING RESULTS                                            
|     |                                                             |                                                              
|     | 5B                                                          | LIQUIDITY AND CAPITAL RESOURCES                              
|     |                                                             |                                                              
|     | 5C                                                          | RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES               
|     |                                                             |                                                              
|     | 5D                                                          | TREND INFORMATION                                            
|     |                                                             |                                                              
|     | 5E                                                          | OFF-BALANCE SHEET ARRANGEMENTS                               
|     |                                                             |                                                              
|     | 5F                                                          | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS                
|     |                                                             |                                                              
|     | 5G                                                          | SAFE HARBOUR                                                 
|     |                                                             |                                                              
|6    | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                  |                                                              
|     |                                                             |                                                              
|     | 6A                                                          | DIRECTORS AND SENIOR MANAGEMENT                              
|     |                                                             |                                                              
|     | 6B                                                          | COMPENSATION                                                 
|     |                                                             |                                                              
|     | 6C                                                          | BOARD PRACTICES                                              
|     |                                                             |                                                              
|     | 6D                                                          | EMPLOYEES                                                    
|     |                                                             |                                                              
|     | 6E                                                          | SHARE OWNERSHIP                                              
|     |                                                             |                                                              
|7    | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS           |                                                              
|     |                                                             |                                                              
|     | 7A                                                          | MAJOR SHAREHOLDERS                                           
|     |                                                             |                                                              
|     | 7B                                                          | RELATED PARTY TRANSACTIONS                                   
|     |                                                             |                                                              
|     | 7C                                                          | INTERESTS OF EXPERTS AND COUNSEL                             
|     |                                                             |                                                              
|8    | FINANCIAL INFORMATION                                       |                                                              
|     |                                                             |                                                              
|     | 8A                                                          | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION
|     |                                                             |                                                              
|     | 8B                                                          | SIGNIFICANT CHANGES                                          
|     |                                                             |                                                              
|9    | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                |                                                              
|     |                                                             |                                                              
|     | 9A                                                          | OFFER AND LISTING DETAILS                                    
|     |                                                             |                                                              
|     | 9B                                                          | PLAN OF DISTRIBUTION                                         
|     |                                                             |                                                              
|     | 9C                                                          | MARKETS                                                      
|     |                                                             |                                                              
|     | 9D                                                          | SELLING SHAREHOLDERS                                         
|     |                                                             |                                                              
|     | 9E                                                          | DILUTION                                                     
|     |                                                             |                                                              
|     | 9F                                                          | EXPENSES OF THE ISSUE                                        
|     |                                                             |                                                              

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|197 | CROSS REFERENCE TABLE TO FORM 20-F | | | CHAPTER 15
|--- | ---------------------------------- | - | ----------
|   

PART I

|     |                                                                  |                                       
|---- | ---------------------------------------------------------------- | --------------------------------------
|ITEM | REQUIRED ITEM IN FORM 20-F                                       | PAGE NUMBER                           
|     |                                                                  |                                       
|     |                                                                  |                                       
|     |                                                                  |                                       
|10   | ADDITIONAL INFORMATION                                           |                                       
|     |                                                                  |                                       
|     | 10A                                                              | SHARE CAPITAL                         
|     |                                                                  |                                       
|     | 10B                                                              | MEMORANDUM AND ARTICLES OF ASSOCIATION
|     |                                                                  |                                       
|     | 10C                                                              | MATERIAL CONTRACTS                    
|     |                                                                  |                                       
|     | 10D                                                              | EXCHANGE CONTROLS                     
|     |                                                                  |                                       
|     | 10E                                                              | TAXATION                              
|     |                                                                  |                                       
|     | 10F                                                              | DIVIDENDS AND PAYING AGENTS           
|     |                                                                  |                                       
|     | 10G                                                              | STATEMENT BY EXPERTS                  
|     |                                                                  |                                       
|     | 10H                                                              | DOCUMENTS ON DISPLAY                  
|     |                                                                  |                                       
|     | 10I                                                              | SUBSIDIARY INFORMATION                
|     |                                                                  |                                       
|11   | QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK | 100, 115-117, 134-135                 
|     |                                                                  |                                       
|12   | DESCRIPTION OF SECURITIES OTHER THEN EQUITY
      SECURITIES     | N/A                                   
|     |                                                                  |                                       

PART II

|     |                                                                                    |            
|---- | ---------------------------------------------------------------------------------- | -----------
|ITEM | REQUIRED ITEM IN FORM 20-F                                                         | PAGE NUMBER
|     |                                                                                    |            
|     |                                                                                    |            
|     |                                                                                    |            
|13   | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | N/A        
|     |                                                                                    |            
|14   | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS | N/A        
|     |                                                                                    |            
|15   | CONTROLS AND PROCEDURES                                                            | 65-66      
|     |                                                                                    |            
|16A  | AUDIT COMMITTEE FINANCIAL EXPERT                                                   | 60         
|     |                                                                                    |            
|16B  | CODE OF ETHICS                                                                     | 73-76      
|     |                                                                                    |            
|16C  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                             | 63, 145-146
|     |                                                                                    |            
|16D  | EXEMPTIONS FROM THE LISTING STANDARDS FOR
      AUDIT COMMITTEES                   | 64         
|     |                                                                                    |            
|16E  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED PURCHASERS       | 189-190    
|     |                                                                                    |            

PART III

|     |                            |                   
|---- | -------------------------- | ------------------
|ITEM | REQUIRED ITEM IN FORM 20-F | PAGE NUMBER       
|     |                            |                   
|     |                            |                   
|     |                            |                   
|17   | FINANCIAL STATEMENTS       | N/A               
|     |                            |                   
|18   | FINANCIAL STATEMENTS       | 101-171           
|     |                            |                   
|19   | EXHIBITS                   | FILED WITH THE SEC
|     |                            |                   

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|CHAPTER 15 | | | CROSS REFERENCE TABLE TO FORM 20-F | 198
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Published by
  TNT N.V. 
  P.O. Box 13000 
  1100 KG Amsterdam 
  The Netherlands 
  Telephone + 31 20 500 6000 
  Fax + 31 20 500 7000group.tnt.com
Chamber of Commerce, Amsterdam
Reg. no. 27168968

Design and production coordination 
  Mattmo concept | designwww.mattmo.nl

Photography 
  Anton Corbijn

Lithography and printing 
  Thieme Amsterdam

Binding
Binderij Hexspoor

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|Item
      19: EXHIBITS                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                           
|1.1                                                                                                                                        
|                                                                                                                                           
|2.1                                                                                                                                        
|                                                                                                                                           
|2.2                                                                                                                                        
|                                                                                                                                           
|2.3                                                                                                                                        
|                                                                                                                                           
|4.1                                                                                                                                        
|                                                                                                                                           
|4.2                                                                                                                                        
|                                                                                                                                           
|4.3                                                                                                                                        
|                                                                                                                                           
|4.4                                                                                                                                        
|                                                                                                                                           
|4.5                                                                                                                                        
|                                                                                                                                           
|8. 1                                                                                                                                       
|                                                                                                                                           
|11.1                                                                                                                                       
|                                                                                                                                           
|12.1                                                                                                                                       
|                                                                                                                                           
|12.2                                                                                                                                       
|                                                                                                                                           
|13.1                                                                                                                                       
|                                                                                                                                           
|13.2                                                                                                                                       
|                                                                                                                                           
|15.1                                                                                                                                       
|                                                                                                                                           
|1Incorporated
      by reference to Exhibit 2.1 to our annual report on Form 20-F filed with
      the SEC on 13 March 2001.               
|2Incorporated
      by reference to Exhibit 2.3 to our annual report on Form 20-F filed with
      the SEC on 4 March 2002.                
|3Incorporated
      by reference to Exhibit 4.3 to our annual report on Form 20-F filed with
      the SEC on 31 March 2004.               
|4Incorporated
      by reference to Exhibit 4.3 to the amendment to our annual report on Form
      20-F filed with the SEC on 1 July 2002.
|5Incorporated
      by reference to Exhibit 4.7 to our annual report on Form 20-F filed with
      the SEC on 1 March 2006.                
|6Incorporated
      by reference to Exhibit 4.4 to our annual report on Form 20-F filed with
      the SEC on 21 February 2003.            

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Exhibit 1.1

| | 
| | 



ARTICLES OF ASSOCIATION of

TNT N.V.,having its official seat in Amsterdam.27 February 2006

Office translation of the complete text of the Articles of Association of TNT N.V., having its official seat in Amsterdam, as they read after the deed of amendment executed on 27 February 2006 before G.W.Ch. Visser, civil
law notary in Amsterdam, in respect of which a ministerial Statement of No objections was granted on 27 February 2006, under number NV 617722.

In preparing the attached document, an attempt has been made to translate as literally as possible without jeopardizing the overall continuity of the text. Inevitably, however, differences may occur in translation, and if
they do, the Dutch text will govern by law.

In the attached document, Dutch legal concepts are
  expressed in English terms and not in their original Dutch terms; the concepts
  concerned may not be identical to concepts described by the English terms as
  such terms may be understood under the laws of other jurisdictions.



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|CHAPTER I                                                                                            
|-----------------------------------------------------------------------------------------------------
|                                                                                                     
|Definitions.                                                                                         
|                                                                                                     
|Article 1.                                                                                           
|                                                                                                     
|In these articles
      of association the following terms shall have the meanings as assigned below:
|                                                                                                     
|a.                                                                                                   
|                                                                                                     
|b.                                                                                                   
|                                                                                                     
|c.                                                                                                   
|                                                                                                     
|d.                                                                                                   
|                                                                                                     
|e.                                                                                                   
|                                                                                                     
|f.                                                                                                   
|                                                                                                     
|g.                                                                                                   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|h.                                                                                                   
|                                                                                                     
|i.                                                                                                   
|                                                                                                     
|                                                                                                     

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|   | –                                                                                                                                                                                                                                                                                      | a partnership, a (business) undertaking of
      which has been registered in the commercial register and for which the company
      or a dependent company is fully liable as a partner towards third parties
      for all liabilities;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                       
|j. | Official Price List: the Official
      Price List of Euronext Amsterdam N.V. or an official publication replacing
      it;                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                       
|k. | General Rules: the General Rules
      (Algemeen Reglement)
      Euronext Amsterdam Stock Market;                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                       
|l. | Necigef:Nederlands
      Centraal Instituut voor Giraal Effectenverkeer B.V.:
      the Netherlands central securities depository (centraal instituut) as referred
      to in the Securities Bank Giro Transfer Act (Wet
      giraal effectenverkeer) (Euroclear
      Netherlands);
|   |                                                                                                                                                                                                                                                                                       
|m. | Necigef-beneficiary: in respect of
      ordinary shares, a participant (deelgenoot)
      in the collective deposit (verzameldepot) of ordinary shares
      of a Necigef- participant, all within the meaning of the Securities Bank
      Giro Transfer Act;                       
|   |                                                                                                                                                                                                                                                                                       
|n. | Necigef-participant: an institution
      which is an associated institution (aangesloten
      instelling) within the meaning of the
      Securities Bank Giro Transfer Act;                                                                                                        
|   |                                                                                                                                                                                                                                                                                       
|o. | Necigef Global Certificate: the one
      single share certificate representing all bearer ordinary shares in issue
      from time to time referred to in article 6, paragraph 2, of these articles
      of association.                                                            

|                                                    
|----------------------------------------------------
|CHAPTER II                                          
|                                                    
|Name, registered
      office, structure and object.
|                                                    
|Article 2.
      Name and seat.                     
|                                                    
|1.                                                  
|                                                    
|2.                                                  

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Article 3. Structure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|The company is a 'large company'. The sections
      158 to 164 inclusive of Book 2 of the Netherlands Civil Code shall be applicable.
      Pursuant to the Enabling Act Koninklijke PTT Nederland N.V. (Machtigingswet Koninklijke PTT Nederland N.V.)
      as lastly amended by law of 1 November 2001 (Wijziging
      van de Machtigingswet Koninklijke PTT Nederland N.V. in verband met het
      opheffen van de uitzonderingen die voor Koninklijke KPN Nederland N.V. gelden
      ten aanzien van de in Boek 2 van het Burgerlijk Wetboek opgenomen regeling
      voor grote vennootschappen, Statute Book (Staatsblad) 2001, 560), the exceptions pursuant to the sections 153 paragraph 3
      and 155 of Book 2 of the Netherlands Civil Code do not apply to it.

|                                     
|-------------------------------------
|Article 4.
      Object.             
|                                     
|The objects of
      the company are:
|                                     
|a.                                   

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|                                                                                                                  | converting and transmitting of information,
      to manage and dispose of information, the providing of logistic services
      and the providing of money transactions;         
|----------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                  |                                                                                                                                                                                   
|b.                                                                                                                | to let its subsidiaries carry out the concessions
      or licenses that are granted by the Netherlands government in the field
      mentioned under a;                          
|                                                                                                                  |                                                                                                                                                                                   
|c.                                                                                                                | to manage and finance subsidiaries, group companies,
      dependent companies and participations, among which to guarantee the debts
      of those companies and participations,
|                                                                                                                 
|and further to engage in any activity
      which may be related or conducive to the objects set out hereinabove.
|                                                                                                                 
|CHAPTER III                                                                                                      
|                                                                                                                 
|Capital and shares. Registers.                                                                                   
|                                                                                                                 
|Article 5. Authorised capital.
      Classes of shares.                                                          

|   |                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The authorised capital amounts to eight hundred
      sixty-four million euros (EUR 864,000,000).                                                            
|   |                                                                                                                                                              
|2. | The authorised capital is divided into one
      billion eight hundred million (1,800,000,000) shares of forty-eight eurocents
      (EUR 0.48) each, namely:

| |    |             |                                                                                                                        
| | -- | ----------- | -----------------------------------------------------------------------------------------------------------------------
| | a. | 900,000,000 | nine hundred million ordinary shares;                                                                                  
| |    |             |                                                                                                                        
| | b. | 1           | one special share;                                                                                                     
| |    |             |                                                                                                                        
| | c. | 899,999,999 | eight hundred ninety-nine million nine hundred
      ninety-nine thousand nine hundred ninety-nine preference shares B.

|                                                                     |                                                                                                                                                                                                                                                 
|-------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.                                                                   | The ordinary shares may, at the choice of the
      shareholder, be registered shares or bearer shares. The special share and
      the preference shares B shall be registered shares.                                                         
|                                                                     |                                                                                                                                                                                                                                                 
|4.                                                                   | Where the terms "shares" and "shareholders"
      are used in these articles of association they shall, unless the context
      indicates otherwise, be taken to mean all classes of shares referred to
      in paragraph 2 and their holders.
|                                                                    
|Article 6. Bearer ordinary shares:
      Necigef Global Certificate.

|   |                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | On the occasion of the issuance of ordinary
      shares any person entitled to receive such share may submit a written request
      to the company for a registered ordinary share. Without such request, the
      person entitled to such share shall obtain a bearer ordinary share in conformity
      with the provisions of this article 6.
|   |                                                                                                                                                                                                                                                                                                                                                    
|2. | All bearer ordinary shares in issue from time
      to time shall be represented by one single share certificate (the "Necigef
      Global Certificate").                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                    
|3. | The company shall have the Necigef Global Certificate
      kept in safe custody by Necigef for the benefit of the Necigef-beneficiaries.                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                    
|4. | The company shall confer a right to a bearer
      ordinary share on a person by (i) having Necigef enable the company to add
      an ordinary share to the Necigef Global Certificate, and (ii) by the entitled
      person designating a Necigef-participant that will accordingly credit him
      as Necigef-beneficiary                     
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|                    | in this Necigef-participant's collective deposit
      of ordinary shares in the company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|5.                  | Without prejudice to the provisions in article
      44, paragraph 4, of these articles of association, Necigef shall be irrevocably
      charged with the management of the Necigef Global Certificate and be irrevocably
      authorised on behalf of the Necigef-beneficiaries to perform all acts in
      respect of the shares concerned, including acceptance and delivery and lending
      cooperation in the crediting and debiting of the Necigef Global Certificate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6.                  | No individual bearer ordinary share shall be
      handed over.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|7.                  | A Necigef-beneficiary may at any time require
      the conversion of one or more bearer ordinary shares up to the maximum number
      he is entitled to into registered ordinary shares. Such conversion of one
      or more ordinary shares is only allowed to the maximum number for which
      he is Necigef- participant and shall require (i) the transfer by deed of
      the shares concerned by Necigef to the Necigef-beneficiary, (ii) the company
      acknowledging the transfer of the shares concerned, (iii) Necigef enabling
      the company to have the ordinary shares debited from the Necigef Global
      Certificate, (iv) the Necigef-participant concerned debiting the Necigef-beneficiary
      accordingly as a participant in its collective deposit of ordinary shares
      in the company and (v) the company effecting the entry of the Necigef-beneficiary's
      name in the company's register of shareholders as holder of the registered
      ordinary shares concerned.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8.                  | A holder of registered ordinary shares may
      at any time require the conversion of such ordinary shares into bearer ordinary
      shares. Conversion of one or more registered ordinary shares shall require
      (i) the transfer by deed of the shares concerned by the shareholder to Necigef,
      (ii) the company acknowledging the transfer of the shares concerned, (iii)
      Necigef enabling the company to have the ordinary shares credited to the
      Necigef Global Certificate, (iv) the Necigef-participant crediting the shareholder
      accordingly as Necigef-beneficiary in its collective deposit of ordinary
      shares in the Company, and (v) the company effecting the deletion of the
      shareholder's name as holder of the shares concerned in the company's register
      of shareholders.                                                                                                                                                                             
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|9.                  | For the purpose of application of the provisions
      of these articles of association, shareholders shall be understood to include
      Necigef- beneficiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.                 | In the event of the damage, destruction or
      loss of share certificates, the Board of Management may issue duplicates.
      The issue of a duplicate shall render the original document worthless vis-à-vis
      the company. The new document shall clearly state that it is a duplicate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                   
|Article 7.         
|                   
|Has been cancelled.

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|Article 8.                                       
|-------------------------------------------------
|Has been cancelled.                              
|                                                 
|Article 9.                                       
|Has been cancelled.                              
|                                                 
|Article 10.
      Depositary receipts for shares.
|                                                 
|1.                                               
|                                                 
|2.                                               
|                                                 
|                                                 
|                                                 
|                                                 

|                                             
|---------------------------------------------
|Article 11. Registers
      for shareholders.
|                                             
|1.                                           
|                                             
|2.                                           
|                                             
|3.                                           
|                                             
|4.                                           
|                                             
|5.                                           
|                                             
|6.                                           
|                                             
|7.                                           

|                                 
|---------------------------------
|CHAPTER IV                       
|                                 
|Issue of shares.                 
|                                 
|Article 12. Competent
      body.
|                                 
|1.                               
|                                 
|                                 
|                                 

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|   | shall be determined by a resolution of the
      general meeting and shall be for a period of five years at most.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | Designation of the Board of Management as the
      body competent to issue shares may be extended by the articles of association
      or by a resolution of the general meeting for a period not exceeding five
      years in each case. The resolution of the general meeting thereto shall
      be subject to the approval of the holder of the special share. The number
      of shares which may be issued shall be determined at the time of designation.
      Designation pursuant to the articles of association may be withdrawn by
      an amendment to the articles of association. Designation by resolution of
      the general meeting cannot be withdrawn unless determined otherwise at the
      time of designation.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Upon termination of the authority of the Board
      of Management, the issue of shares shall thenceforth require a resolution
      of the general meeting, save where another corporate body has been designated
      by the general meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | A resolution by the general meeting to issue
      shares or to designate another body as the body competent to issue such
      shares, may only be taken upon a proposal of the Board of Management subject
      to the approval of the Supervisory Board. The resolution of the general
      meeting shall be subject to the approval of the holder of the special share.
      A resolution of the general meeting to designate another corporate body
      can only be effected if it is determined thereto that every resolution to
      issue shares of that body shall be subject to the approval of the Supervisory
      Board and the holder of the special share.                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | The issue of preference shares B pursuant to
      a resolution of a body other than the general meeting as a result of which
      the amount of preference shares B issued would exceed one hundred per cent
      (100%) of the amount of other shares issued may only take place with the
      prior approval of the general meeting, granted from case to case.                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | In the event of an issue of preference shares
      B pursuant to a resolution of a body other than the general meeting as a
      result of which the amount of preference shares B issued does not exceed
      one hundred per cent (100%) of the amount of other shares issued, a general
      meeting of shareholders shall be convened within four weeks of the issue
      at which the reasons for the issue shall be explained.                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|7. | The provisions of paragraphs 1 to 6 inclusive
      shall be applicable mutatis mutandis to the granting of rights to subscribe
      to shares, but shall not be applicable to the issue of shares to persons
      exercising a previously granted right to subscribe to shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|8. | In the event of an issue of preference shares
      B, a general meeting of shareholders shall be convened, to be held not later
      than two years after the date on which preference shares B were issued for
      the first time. The agenda for that meeting shall include a resolution relating
      to the repurchase or                                                                                                                                                                                                                                                                                                                                                                                                           
|  
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|                                                        | cancellation of the preference shares B. If
      the resolution to be adopted in respect of this item on the agenda does
      not extend to the repurchase or cancellation of the preference shares B,
      a general meeting of shareholders shall be convened and held, in each case
      within two years of the previous meeting, the agenda of which meetings shall
      include a resolution relating to the repurchase or cancellation of the preference
      shares B, until such time as no more preference shares B remain issued.
      The foregoing provisions of this paragraph shall not be applicable to preference
      shares B issued pursuant to a resolution of the general meeting.
|------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|9.                                                      | Section 96 of Book 2 of the Netherlands Civil
      Code shall also be applicable to the issue of shares and the granting of
      rights to subscribe to shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                       
|Article 13. Share issue terms.
      Pre-emptive right.

|                                 |                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                               | The price and other terms of issue shall be
      determined at the time of the resolution to issue shares. Save as provided
      in section 80, paragraph 2 of Book 2 of the Netherlands Civil Code, the
      issue price shall not be less than par.                                                                                                                                           
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                    
|2.                               | Each holder of ordinary shares shall have a
      pre-emptive right to any issue of ordinary shares pursuant to the provisions
      of section 96a of Book 2 of the Netherlands Civil Code. The same shall apply
      to the granting of rights to subscribe to ordinary shares.                                                                                                                 
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                    
|3.                               | The pre-emptive right may be restricted or
      excluded by a resolution of the Board of Management. The resolution shall
      be subject to the approval of the Supervisory Board and the holder of the
      special share. The authority vested in the Board of Management shall terminate
      on the date of termination of the authority of the Board of Management to
      issue shares.
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                    
|                                 | Paragraphs 1 to 4 inclusive of article 12 shall
      be applicable mutatis mutandis.                                                                                                                                                                                                                                                                                                              
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                    
|4.                               | Sections 96a and 97 of Book 2 of the Netherlands
      Civil Code shall also be applicable to the issue terms and the pre-emptive
      right, respectively.                                                                                                                                                                                                                                       
|                                
|Article 14. Paying up on shares.

|   |                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | On subscription to each ordinary share and
      the special share, payment must be made of its nominal value and, if an
      ordinary share is subscribed to at a higher amount, the difference between
      such amounts, without prejudice to the provisions of section 80, paragraph
      2 of Book 2 of the Netherlands Civil Code.
|   |                                                                                                                                                                                                                                                                                                                                            
|2. | On subscription to each preference share B,
      paying up must be made of at least one-quarter of its nominal value.                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                            
|3. | Further paying up on preference shares B shall
      not be made until a call for such paying up is made by the company. Calls
      for further paying up shall be made pursuant to a resolution of the Board
      of Management. The resolution is subject to the approval of the Supervisory
      Board.                              
|   |                                                                                                                                                                                                                                                                                                                                            
|4. | Paying up on preference shares B and on the
      special share may be made                                                                                                                                                                                                                                                                
|  
|  
|  
|  

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|                                                                            | only in cash. Paying up on ordinary shares
      must be made in cash, insofar as another form of contribution has not been
      agreed to.                                                                                                                                              
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                            |                                                                                                                                                                                                                                                                                           
|5.                                                                          | The Board of Management shall be authorised,
      without the prior approval of the general meeting, to perform legal acts
      relating to non-cash contributions for ordinary shares and the other legal
      acts referred to in section 94 of Book 2 of the Netherlands Civil Code.
|                                                                            |                                                                                                                                                                                                                                                                                           
|6.                                                                          | Sections 80, 80a, 80b and 94b of Book 2 of
      the Netherlands Civil Code shall also be applicable to payment on shares
      and non-cash contributions, respectively.                                                                                                                 
|                                                                           
|CHAPTER V                                                                  
|                                                                           
|Shares in the company's
      own capital and depositary receipts therefor.
|                                                                           
|Article 15. Acquisition.                                                   

|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|--------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                    | The company may acquire fully paid
      up shares in its own capital or depositary receipts therefor, but may only
      do so for no consideration or if:                                                                                                                                                                                                                                
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|                      | a.                                                                                                                                                                                                                                                                                                                                                                                         
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|                      | b.                                                                                                                                                                                                                                                                                                                                                                                         
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|2.                    | The company may acquire shares in
      its own capital or depositary receipts therefor for the purpose of transferring
      the same to employees of the company or of a group company under a scheme
      applicable to such employees.                                                                                                                                                
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|3.                    | Shares in the company's own capital
      shall be acquired or disposed of pursuant to a resolution of the Board of
      Management.                                                                                                                                                                                                                                                      
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|                      | A resolution to acquire or dispose
      of shares in its own capital amounting to more than one per cent (1%) of
      the issued capital of ordinary shares shall be subject to the approval of
      the holder of the special share; all without prejudice to the provisions
      of article 25 paragraph 2 under A.a and section 98, paragraph 4 of the Netherlands
      Civil Code.
|                      |                                                                                                                                                                                                                                                                                                                                                                                            
|4.                    | Sections 24d, 89a, 95, 98, 98a, 98b,
      98c, 98d and section 118, paragraph 7 of Book 2 of the Netherlands Civil
      Code shall also be applicable to shares in the company's own capital or
      depositary receipts therefor.                                                                                                                                                      
|                     
|CHAPTER VI           
|Reduction of capital.
|Article 16.          

|   |                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The general meeting may, but only
      on a proposal of the Board of Management with the approval of the Supervisory
      Board, resolve to reduce the issued capital:
|   |                                                                                                                                                                         
|   | a.                                                                                                                                                                      
|   |                                                                                                                                                                         
|   | b.                                                                                                                                                                      
|  
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|                                                                                           | the articles of association.                                                                                                                                                                                                               
|------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                           |                                                                                                                                                                                                                                            
|2.                                                                                         | A resolution to cancel may only relate
      to:                                                                                                                                                                                           
|                                                                                           |                                                                                                                                                                                                                                            
|                                                                                           | a.                                                                                                                                                                                                                                         
|                                                                                           |                                                                                                                                                                                                                                            
|                                                                                           | b.                                                                                                                                                                                                                                         
|                                                                                           |                                                                                                                                                                                                                                            
|3.                                                                                         | A resolution to cancel the special
      share shall only be adopted with the prior approval of the holder of the
      special share.                                                                                                     
|                                                                                           |                                                                                                                                                                                                                                            
|4.                                                                                         | Any partial repayment on shares or
      release from the obligation to pay up shall only be permitted in order to
      implement a resolution to reduce the nominal amount of the shares. Such
      a repayment or release must be made:
|                                                                                           |                                                                                                                                                                                                                                            
|                                                                                           | a.                                                                                                                                                                                                                                         
|                                                                                           |                                                                                                                                                                                                                                            
|                                                                                           | b.                                                                                                                                                                                                                                         
|                                                                                           |                                                                                                                                                                                                                                            
|5.                                                                                         | The provisions of sections 99 and
      100 of Book 2 of the Netherlands Civil Code shall also be applicable to
      the reduction of capital.                                                                                            
|                                                                                          
|CHAPTER VII                                                                               
|                                                                                          
|Transfer of the special
      share. Transfer of the registered shares. Restricted rights.

|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Article 17. Transfer
      of the special share.                   
|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|1.                                                                  | The special share can be transferred to the
      company.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2.                                                                  | Any transfer other than that to the company
      can only be effected with the approval of the Board of Management and the
      Supervisory Board.                                                                                                                                                                                                                                                                                                                                                            
|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3.                                                                  | The transfer must take place within three months
      after the approval has been granted. The approval shall be deemed to have
      been granted if the Board of Management and the Supervisory Board, having
      informed the applicant of the refusal of the request, do not simultaneously
      inform the applicant of one or more prospective buyers who are prepared
      to purchase the special share against payment in cash. The company itself
      can be designated as a prospective buyer.
|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4.                                                                  | The transfer of the special share to the company
      or to another prospective buyer as referred to in paragraph 3 shall take
      place against a purchase price that equals the nominal value of the special
      share.                                                                                                                                                                                                                                                                                  
|                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.                                                                  | If the special share is transferred without
      the approval of the Board of Management and the Supervisory Board, the rights
      granted to the holder of the special share as such in the articles of association
      shall terminate.                                                                                                                                                                                                                                                                  
|                                                                   
|Article 18. Transfer of registered
      shares. Restricted rights.

|   |                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | A transfer of a registered share or of a restricted
      right thereto shall require a deed of transfer drawn up for that purpose
      and, save when the company itself is a party to the legal act, acknowledgement
      in writing by the company of the transfer.
|   |                                                                                                                                                                                                                                                                         
|   | Acknowledgement must be given in the instrument
      or by a dated statement embodying such acknowledgement on the instrument
      or on a copy or extract thereof duly authenticated by a civil-law notary
      or by the transferor. Service                       
|  
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|   | of such instrument, copy or extract on the
      company shall be deemed as acknowledgement. If the transfer relates to preference
      shares B which have not been paid up in full, the acknowledgement may be
      given only if the instrument of transfer bears an officially recorded or
      otherwise fixed date.                                                                                                     
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | A pledge may be also established on a share
      without acknowledgement by the company or service of an instrument on the
      company. In such cases, section 239 of Book 3 of the Netherlands Civil Code
      shall be applicable mutatis mutandis whereby acknowledgement by the company
      or service of an instrument on the company shall replace the notification
      referred to in paragraph 3 of that section.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3. | The acknowledgement shall be signed with due
      observance of the provisions on representation of article 24.                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  

|Article 19.
      Usufruct. Pledge.
|-----------------------------------
|                                   
|1.                                 
|                                   
|2.                                 
|                                   

|CHAPTER VIII                          
|--------------------------------------
|                                      
|Management.                           
|                                      
|Article 20.
      Board of Management.
|                                      
|1.                                    
|                                      
|2.                                    
|                                      

|Article 21.
      Appointment, suspension and dismissal.
|--------------------------------------------------------
|                                                        
|1.                                                      
|                                                        
|2.                                                      

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|   | meeting regarding the intended dismissal.                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                
|3. | The Supervisory Board can suspend a member
      of the Board of Management.                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                
|4. | A suspension may be extended on one or more
      occasions, but is not to last for a total of more than three months. If
      no decision has been made to set aside the suspension or dismiss such member
      by the end of that period the suspension shall be set aside.
|   |                                                                                                                                                                                                                                                                                
|5. | Section 158, paragraph 10 of Book 2 of the
      Netherlands Civil Code shall also apply to the appointment and dismissal
      of the members of the Board of Management.                                                                                                     
|   |                                                                                                                                                                                                                                                                                

|Article 22.
      Remuneration.
|-------------------------------
|                               
|1.                             
|                               
|2.                             
|                               
|3.                             
|                               

|Article 23.
      Management duties. Decision-making. Allocation of tasks.
|--------------------------------------------------------------------------
|                                                                          
|1.                                                                        
|                                                                          
|2.                                                                        
|                                                                          
|3.                                                                        
|                                                                          
|4.                                                                        
|                                                                          
|Article 24.
      Representation.                                         

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|1. | The Board of Management represents
      the company. Representative authority shall also vest in:                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | a.                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | b.                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|2. | The Board of Management may appoint
      officers with general or restricted power to represent the company. Any
      such appointment may be withdrawn at any time. All such officers shall represent
      the company with due observance of the restrictions imposed on their powers.
      Their titles shall be determined by the Board of Management.
|   |                                                                                                                                                                                                                                                                                                                                                               
|3. | In the event of a conflict of interest
      between the company and a member of the Board of Management, the company
      shall be represented by a member of the Board of Management or a member
      of the Supervisory Board appointed by the Supervisory Board for this purpose.                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                               

|Article 25.
      Approval of resolutions of the Board of Management.
|---------------------------------------------------------------------
|                                                                     
|1.                                                                   
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                     

|2. | Without prejudice to the other provisions
        of these articles of association as to that subject, the approval of
        the Supervisory Board shall be required for:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                            
|   | A.                                                                                                                                                                         
|   |                                                                                                                                                                            
|   |                                                                                                                                                                            
|   |                                                                                                                                                                            
|   |                                                                                                                                                                            
|   |                                                                                                                                                                            
|   |                                                                                                                                                                            

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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|

|3. | Without prejudice to the provisions of paragraphs 1 and 2 of this article, the approval of the Supervisory Board shall be required for resolutions of the Board of Management:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | a.                                                                                                                                                                            
|  
|   | b.                                                                                                                                                                            

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|                                                                                                                                                                | For the application of what is provided
      for in this sub-paragraph, granting approval for resolutions of a Board
      of Management of a legal entity referred to in a. or b. of this sub-paragraph
      to vote on shares in the capital of another legal entity referred to in
      section 4, paragraph 1 of the Netherlands Postal Act which are held by the
      former legal entity, shall be equated with voting on shares.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                               
|4.                                                                                                                                                              | Without prejudice to the provisions
      of paragraphs 1 up to and including 3 of this article, the approval of both
      the Supervisory Board and the holder of the special share shall be required
      for resolutions of the Board of Management:                                                                                                                                                                                  
|                                                                                                                                                               
|                                                                                                                                                                | a.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                               
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                               
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                               
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                               
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                               
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                               
|                                                                                                                                                                | b.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                               
|5.                                                                                                                                                              | The Supervisory Board may require
      other resolutions of the Board of Management than those specified in paragraphs
      2, 3 and 4, to be subject to its approval. The Board of Management shall
      be notified in writing of such resolutions, which shall be clearly specified.                                                                                                                                                 
|                                                                                                                                                               
|6.                                                                                                                                                              | The lack of approval of the general
      meeting for a resolution as referred to in paragraph 1 or of the Supervisory
      Board or the holder of the special share, respectively, for a resolution
      as referred to in the paragraphs 2, 3, 4 and 5 shall not affect the authority
      of the Board of Management and its members to represent the company.                                                                       
|                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Article 26. Absence or
      inability to act.                                                                                                                 
|                                                                                                                                                               
|In the event of the absence
      or inability to act of a member of the Board of Management, the remaining
      members shall be charged temporarily with the

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|management of the company. In
        the event of the absence or inability to act of all the members of the
        Board of Management, the Supervisory Board shall be charged temporarily
        with the management of the company and shall have the authority to delegate
        the management of the company temporarily to one or more persons, whether
    or not members of the Supervisory Board.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                               
|CHAPTER IX                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                               
|Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                               
|Article 27. Number of Members.
    Profile. Eligibility.                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                               
|1.                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                               
|2.                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                               
|3.                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                               
|4.                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                               

Article 28. Appointment. Resolutions passed in
  the General Meeting of Shareholders.

Section A. Appointment.

|1. | Notwithstanding the provisions
      of paragraph 6, members of the Supervisory Board are appointed by the general
      meeting at a nomination of the Supervisory Board. The Supervisory Board
      shall simultaneously inform the general meeting and the central works council
      of the nomination. The nomination will state the reasons on which it is
    based.                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | The general meeting and the central
      works council may recommend candidates to the Supervisory Board to be nominated
      as members of the Supervisory Board. The Supervisory Board shall inform
      them in time, when, why and in accordance with what profile a vacancy has
      to be filled in its midst. In case the stronger right of recommendation,
      as referred to in paragraph 3, applies to the vacancy, the Supervisory Board
    shall announce that as well.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | With regard to one third of the
      total number of members of the Supervisory Board, the Supervisory Board
      shall put a person recommended by the central works council on the nomination,
      unless the Supervisory Board                                                                                                                                                                                                                                                     

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|   | objects to the recommendation
        because it suspects that the recommended person shall be unsuitable for
        the exercise of the duties of a member of the Supervisory Board or that
        the Supervisory Board shall not be composed properly in case of appointment
        in accordance with the recommendation. If the number of members of the
        Supervisory Board cannot be divided by three, the closest lower number
        that can be divided by three shall be taken into account in order to
        establish the number of members of the Supervisory Board for which the
    stronger right of recommendation applies.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | A recommendation or nomination
      as referred to above in this article shall state the candidate's age, his
      profession, the number of the shares he holds in the capital of the Company
      and the positions he holds or has held, in so far as these are relevant
      for the performance of the duties of a member of the Supervisory Board.
      Furthermore, the names of the legal entities of which he is already a member
      of the Supervisory Board shall be indicated; if those include legal entities
      which belong to the same group, a reference to that group will be sufficient.
      The recommendation and nomination to appoint or re-appoint must be accounted
      for. In case of re-appointment, the performance in the past period of the
    candidate as a member of the Supervisory Board shall be taken into account.                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | If the Supervisory Board objects
      to a recommendation as referred to in paragraph 3, it shall inform the central
      works council of its objection, stating the reasons. The Supervisory Board
      shall forthwith enter into consultation with the central works council in
      order to reach agreement on the nomination. If the Supervisory Board establishes
      that no agreement can be reached, a representative of the Supervisory Board
      designated for that purpose shall request the Commercial Division of the
      Amsterdam Court of Appeal to declare the objection well-founded. The request
      shall not be filed before the lapse of four weeks after the consultation
      with the central works council started. The Supervisory Board shall put
      the recommended person on the nomination if the Commercial Division declares
      the objection unfounded. If the Commercial Division declares the objection
      well-founded, the central works council can make a new recommendation in
    accordance with the provision of paragraph 3.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | The general meeting can, by an
      absolute majority of the votes cast, representing at least one third of
      the issued capital, reject the nomination. If the general meeting resolves
      to reject the nomination by an absolute majority, while this majority does
      not represent at least one third of the issued capital, a new meeting will
      be convened where the nomination can be rejected by an absolute majority
      of the votes cast. The Supervisory Board shall then prepare a new nomination.
      Paragraphs 2 up to and including 5 shall apply. If the general meeting does
      not appoint the nominated person                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|                                                                            | and does not resolve to
      reject the nomination, the Supervisory Board shall appoint the nominated
      person.                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|7.                                                                          | Where in the articles
      of association reference is made to the central works council, this is understood
      to mean the central works council as referred to in section 158, paragraph
      11 of Book 2 of the Netherlands Civil Code.                                                                                                                        
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|8.                                                                          | The sections 158 to 161
      inclusive of Book 2 of the Netherlands Civil Code shall apply to the members
      of the Supervisory Board.                                                                                                                                                                                                                              
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|Section
      B. Resolutions passed in the General Meeting of Shareholders.
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|9.                                                                          | Both the making
      of a recommendation as referred to in paragraph 2 as well as the resolution
      to appoint or reject, can be discussed in one and the same general meeting
      of shareholders, provided that the following provisions of this article
      are observed.                                                                                    
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|10.                                                                         | The agenda for
      the meeting shall include at least the following items for discussion:                                                                                                                                                                                                                                                                             
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | a.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | b.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | c.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | d.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|11.                                                                         | The name of the person
      whom the Supervisory Board wishes to nominate and the information as referred
      to in paragraph 4 shall be stated in the convocation of the general meeting
      of shareholders or in an agenda which is made available at the company's
      office for inspection, in which case the convocation shall refer to this
      agenda.
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|12.                                                                         | The convocation
      of this meeting may not take place until it is certain:                                                                                                                                                                                                                                                                                           
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | a.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|                                                                            | b.                                                                                                                                                                                                                                                                                                                                                                      
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|Article
      29. Retirement. Suspension. Dismissal.                       
|                                                                            |                                                                                                                                                                                                                                                                                                                                                                         
|1.                                                                          | A member of the Supervisory
      Board shall resign no later than at the time of closure of the general meeting
      following the day four years after his last appointment and be qualified
      for re-appointment. A member of the                                                                                                                               

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|                                                                                                            | Supervisory Board shall be dismissed
      and suspended in the manner defined in the second respectively third paragraph
      of section 161 of Book 2 of the Netherlands Civil Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.                                                                                                          | The members of the Supervisory Board
      shall resign periodically in accordance with a rotation plan to be drawn
      up by the Supervisory Board. An alteration to the rotation plan cannot imply
      that an incumbent member of the Supervisory Board shall resign against his
      will before the period for which he was appointed has expired.                                                                                                                                                                                                                                                                                          
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.                                                                                                          | The general meeting can,
      by an absolute majority of the votes cast, representing at least
      one third of the issued capital, take a vote of no confidence in ('het
      vertrouwen opzeggen in') the Supervisory
      Board. The reasons for the resolution
      must be stated. The resolution cannot regard members of the Supervisory
      Board appointed by the Commercial Division of the Amsterdam Court
      of Appeal in accordance with paragraph 5 hereinafter.                                                                                                                                                             
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.                                                                                                          | A resolution referred
      to in paragraph 3 shall not be passed until after the Board of Management has
      notified the central works council of the proposed resolution and
      the reasons therefore. The notification shall be made at least thirty days
      before the general meeting of shareholders is held at which the proposal
      is discussed. If the central works council defines a position on the proposal,
      the Board of Management shall inform the Supervisory Board and
      the general meeting thereof. The central works council can have its position
      explained in the general meeting of shareholders.
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5.                                                                                                          | The resolution referred
      to in paragraph 3 shall result in the immediate resignation of the members
      of the Supervisory Board. In that case the Board of Management shall forthwith
      request the Commercial Division of the Amsterdam Court of Appeal
      to temporarily appoint one or more members of the Supervisory Board.
      The Commercial Division shall determine the consequences of the appointment.                                                                                                                                                                                                                    
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.                                                                                                          | The Supervisory Board
      shall take action to the effect that, within the term stated by the Commercial
      Division, a new Supervisory Board is constituted in accordance with the
      provisions of article 28.                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                           
|Article 30.
      Remuneration.                                                                            
|                                                                                                           
|The remuneration for each
      member of the Supervisory Board shall be determined by the general meeting.
|                                                                                                           
|Article 31.
      Duties and powers.                                                                       
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|1.                                                                                                          | The duties of the Supervisory
      Board shall be the supervision of the policy of the Board of Management
      and the general course of affairs of the company and the enterprise connected
      therewith. It shall assist the Board of Management with advice.
      In the performance of their duties the members of the Supervisory Board
      shall be guided by the interest of the company and                                                                                                                                                                                                                                          

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|                                                        | the enterprise connected therewith.                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                       
|2.                                                      | The Board of Management shall provide
      the Supervisory Board in good time with the information necessary for the
      performance of its duties.                                                                                                                                                                                                                                                                                     
|                                                       
|3.                                                      | At least once a year, the Board
      of Management shall inform the Supervisory Board of the main aspects of
      the strategic policy, the general and financial risks and the company's
      management and auditing systems in writing.                                                                                                                                                                                              
|                                                       
|4.                                                      | The Supervisory Board shall have
      access to the company's buildings and premises and shall be entitled to
      inspect the company's books and documents. The Supervisory Board may appoint
      one or more persons from among its number or an expert to exercise these
      powers. The Supervisory Board may also otherwise call upon the assistance
      of experts. The costs of such experts shall be borne by the company.
|                                                       
|Article 32. Working procedures
    and decision-making.
|                                                       
|1.                                                      | The Supervisory Board shall appoint from among
        its midst a chairman and a vice-chairman who shall substitute for the
        former in his absence. The board shall appoint a secretary from among
        its midst or from outside and shall make a provision for the substitution
    of the secretary.                                                                                                                         
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.                                                      | In the absence of the chairman and the vice-chairman
    at a meeting, the meeting itself shall designate a chairman.                                                                                                                                                                                                                                                                                                                      
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3.                                                      | The Supervisory Board shall meet whenever
        the chairman, or two other members of the Supervisory Board, or the Board
    of Management so requests.                                                                                                                                                                                                                                                                                 
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4.                                                      | Minutes shall be kept by the secretary of
        the proceedings of meetings of the Supervisory Board. The minutes shall
        be adopted by the Supervisory Board at the same meeting or at a subsequent
    meeting.                                                                                                                                                                                                                  
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|5.                                                      | All resolutions of the Supervisory Board shall
    be passed by absolute majority of the votes cast.                                                                                                                                                                                                                                                                                                                                       
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|6.                                                      | The Supervisory Board may only pass valid
        resolutions at a meeting if the majority of the members of the Supervisory
    Board are present or represented at the meeting.                                                                                                                                                                                                                                                          
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|7.                                                      | A member of the Supervisory Board may have
        himself represented by a fellow member holding a written proxy. By 'written
        proxy' shall be understood a proxy transmitted by any accepted means
        of communication and received in writing. A member of the Supervisory
        Board may not act as proxy on behalf of more than one fellow member of
    the Supervisory Board.                                        
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|8.                                                      | The Supervisory Board may also adopt resolutions
        without holding a meeting, provided the proposal in question has been
        submitted to all members of the Supervisory Board and none has objected
    to this form of decision-making.                                                                                                                                                                                        
|                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                        | A report shall be drawn up by the secretary
        of a resolution adopted in this way, enclosing the replies received,
        and shall be signed by the chairman and the secretary. In the minutes
    of the subsequent meeting of the Supervisory                                                                                                                                                                                    

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|                       | Board, this form of decision-making shall be
      stated.                                                                                                                                                              
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |                                                                                                                                                                                                                         
|9.                     | The Supervisory Board shall meet together with
      the Board of Management whenever the Supervisory Board or the Board of Management
      so requests.                                                               
|                       |                                                                                                                                                                                                                         
|10.                    | The Supervisory Board shall draw up by-laws
      containing further regulations on the procedure for holding meetings and
      decision-making by the Supervisory Board, and its operating procedures.                
|                       |                                                                                                                                                                                                                         
|11.                    | The Supervisory Board may, without prejudice
      to its responsibilities, designate one or more committees from among its
      members, who shall have the responsibilities specified by the Supervisory
      Board.
|                       |                                                                                                                                                                                                                         
|12.                    | The composition of any such committee shall
      be determined by the Supervisory Board.                                                                                                                               
|                       |                                                                                                                                                                                                                         
|13.                    | The general meeting may additionally remunerate
      the members of the committee(s) for their services.                                                                                                               
|                      
|Article 33. Indemnity.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The company shall indemnify and hold harmless
      each member of the Board of Management and each member of the Supervisory
      Board (each of them, for the purpose of this article 33 only, the "Director")
      against any and all liabilities, claims, judgements, fines and penalties
      (the "Claims"), incurred by the Director as a result of any threatened,
      pending or completed action, investigation or other proceeding, whether
      civil, criminal or administrative (the "Action"), brought by any party other
      than the company itself or its group companies, in relation to acts or omissions
      in or related to his capacity as a Director. Claims will include derivative
      actions brought on behalf of the company or its group companies against
      the Director and claims by the company (or one of its group companies) itself
      for reimbursement for claims by third parties on the ground that the Director
      was jointly liable toward that third party in addition to the company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | The Director will not be indemnified with respect
      to Claims in so far as they relate to the gaining in fact of personal profits,
      advantages or remuneration to which he was not legally entitled, or if the
      Director shall have been adjudged to be liable for wilful misconduct (opzet)
      or intentional recklessness (bewuste
      roekeloosheid).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | Any expenses (including reasonable attorneys'
      fees and litigation costs) (together the "Expenses") incurred by the Director
      in connection with any Action, shall be reimbursed by the company, but only
      upon receipt of a written undertaking by that Director that he shall repay
      such Expenses if a competent Court should determine that he is not entitled
      to be indemnified. Expenses shall be deemed to include any tax liability
      which the Director may be subject to as a result of his indemnification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | Also in case of an Action against the Director
      by the company itself or its group companies, the company will advance to
      the Director his reasonable attorneys' fees and litigation costs but only
      upon receipt of a written                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|                                                                                    | undertaking by that
      Director that he shall repay such fees and costs if a competent
      Court should resolve the Action in favour of the company rather than
      the Director.                                                                                                                                                                                                                                                                                                                                                                                               
|----------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                   
|                                                                                   
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|5.                                                                                  | The Director shall not admit any
      personal financial liability vis-à-vis third parties,
      nor enter into any settlement agreement, without the company's prior
      written authorisation. The company and the Director shall use all
      reasonable endeavours to cooperate with a view
      to agreeing on the defence of any Claims
      but in the event that the company and the Director would fail to
      reach such agreement, the Director shall comply with all directions given
      by the company in its sole discretion.                                
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6.                                                                                  | The indemnity contemplated
      by this article 33 shall not apply to the extent Claims
      and Expenses are reimbursed by insurers.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                   
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|7.                                                                                  | In case of amendment of this article
      33, the indemnity provided thereby shall
      nevertheless continue to apply to Claims and/or Expenses incurred in
      relation to the acts or omissions by the Director
      during the periods in which this clause
      was in effect.                                                                                                                                                                                                                                                                                              
|                                                                                   
|CHAPTER X                                                                          
|                                                                                   
|Financial statements
      and annual report. Profit.                              
|                                                                                   
|Article 34. Financial
      year. Financial statements and annual report. Adoption.
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|1.                                                                                  | The financial year shall coincide
      with the calendar year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2.                                                                                  | Each year, within five months after
      the end of the financial year, save where this
      period is extended by a maximum of six months by the general meeting
      on account of special circumstances, the Board
      of Management shall prepare the financial
      statements and shall lay them open for inspection by the
      shareholders at the office of the company. Within that period the Board
      of Management shall also present the annual report.                                                                                                        
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.                                                                                  | Within the period referred to in
      paragraph 2, the Board of Management shall send
      the financial statements to the central works council as well.                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.                                                                                  | The financial statements shall be
      signed by the members of the Board of Management
      and of the Supervisory Board. If the signature of one or more of
      them is missing, this shall be stated and reasons shall be given.                                                                                                                                                                                                                                                                                                                                                
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|5.                                                                                  | Annually, the Supervisory Board
      shall prepare a report, that shall be added to
      the financial statements and the annual report. The provisions of
      paragraphs 2 and 3 shall apply by analogy.                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6.                                                                                  | The general meeting shall adopt
      the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|7.                                                                                  | In the general meeting of shareholders
      where the resolution to adopt the financial
      statements is passed, a proposal to release the members of the Board
      of Management from liability for the exercise of the management and
      a proposal to release the members of the Supervisory
      Board from liability for the exercise of
      the supervision of the management, insofar as the exercise
      of such duties is reflected in the financial statements or otherwise
      disclosed to the general meeting prior to the
      adoption of the financial
|                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|   | statements, shall be brought up for discussion
      as two separate items. The scope of a release from liability shall be subject
      to limitations by virtue of the law.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|8. | Sections 101, 102 and 103 and Part 9 of Book
      2 of the Netherlands Civil Code shall also be applicable to the financial
      statements and the annual report.         
|  

|Article 35. Dividends.
        Reservations.
|--------------------------------------------
|                                            
|1.                                          
|                                            
|                                            
|                                            
|2.                                          
|                                            
|3.                                          
|                                            
|4.                                          
|                                            

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| | 23
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|   | the Supervisory Board to compensate the loss
      out of the distributable part of the shareholders' equity or also to distribute
      a dividend out of the distributable part of the shareholders' equity.                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. | The Board of Management may resolve to distribute
      an interim dividend. Such a resolution shall be subject to the approval
      of the Supervisory Board.                                                                                                                                                                                                                                                                                                                              
|  
|6. | No dividend shall be paid on the shares held
      by the company in its own capital. For the computation of the profit distribution,
      the shares on which according to this paragraph 6 no dividend shall be paid,
      shall not be included. The provisions laid down before in this paragraph
      6 shall not be applicable in the event that the Board of Management resolves
      otherwise, which resolution shall be subject to the approval of the Supervisory
      Board.
|  
|7. | Sections 103, 104 and 105 of Book 2 of the
      Netherlands Civil Code shall also be applicable to distributions to shareholders.                                                                                                                                                                                                                                                                                                                                                           
|  

|Article 36. Distributions
        in shares and distributions charged to the reserves.                                            
|----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                  
|1.                                                                                                                                
|                                                                                                                                  
|2.                                                                                                                                
|                                                                                                                                  
|Article 37. Payments.                                                                                                             
|                                                                                                                                  
|An announcement of dividends and
        other distributions becoming payable shall be made in accordance with
        article 46.
|                                                                                                                                  
|CHAPTER XI                                                                                                                        
|                                                                                                                                  
|General meetings of shareholders.                                                                                                 
|                                                                                                                                  
|Article 38. Annual meeting.                                                                                                       
|                                                                                                                                  

|1. | The annual meeting shall be held
      each year within six months after the end of the financial year.
|-- | -------------------------------------------------------------------------------------------------------
|  
|2. | The agenda for that meeting shall
      include the following items:                                   
|  
|   | a.                                                                                                     
|  
|   | b.                                                                                                     
|  
|   | c.                                                                                                     
|  
|   | d.                                                                                                     
|  
|   | e.                                                                                                     
|  
|   | f.                                                                                                     
|  
|   | g.                                                                                                     
|  

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| | 24
| | --



|                                                                                                                                                                                                                                                                            | Board of Management and announced
      pursuant to article 40, such as aproposal
      to designate a body competent to issue shares or to authorisethe
      Board of Management to cause the company to acquire its ownshares
      or depositary receipts therefor.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                           
|Article 39. Other
      meetings.                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                           
|Other general meetings
      of shareholders shall be held as often as the Board of Management
      or the Supervisory Board considers it necessary, without prejudice to
      the provisions of sections 110, 111 and 112 of
      Book 2 of the Netherlands Civil Code.
|                                                                                                                                                                                                                                                                           
|Article 40. Notice
      convening a meeting. Agenda.                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                           

|1. | General meetings of the shareholders
      shall be convened by the Supervisory Board or the Board of Management.                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Notice convening a meeting shall
      be given no later than on the fifteenth day prior to that of the meeting.                                                                                                                                                                                                                                                                                                                                                                                
|  
|3. | The notice convening a meeting shall
      state the subjects to be considered or it shall state that the shareholders
      may inspect the same at the office of the company, without prejudice to
      the provisions of section 99, paragraph 7 of Book 2 of the Netherlands Civil
      Code, and article 47, paragraph 3.                                                                                                                                                                
|  
|4. | The notice convening a meeting shall
      state the requirements for admittance to the meetings as described in article
      44.                                                                                                                                                                                                                                                                                                                                                              
|  
|5. | The notice convening a meeting shall
      be given in the manner stated in article 46.                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|6. | Matters not stated in the notice
      convening the meeting may be further announced, subject to the time limit
      pertaining to the convocation of meetings, in the manner stated in article
      46.                                                                                                                                                                                                                                                                                     
|  
|7. | Unless the notice convening the meeting
      includes the contents of all the documents which according to the law or
      the articles of association shall be available to shareholders for inspection
      in connection with the meeting to be held, these documents shall be made
      available to shareholders free of charges at a paying agent (betaalkantoor)
      in the Netherlands, as meant in the General Rules, to be designated in the
      notice convening the meeting.
|  
|8. | Holders of shares representing alone
      or in the aggregate at least one percent (1%) of the issued capital, or
      alone or in the aggregate, at least a value of fifty million euros (EUR
      50,000,000) according to the Official Price List, have the right to request
      to the Board of Management or the Supervisory Board to place items on the
      agenda of the general meeting of shareholders.                                                                         
|  
|   | These requests have to be honoured
      by the Board of Management or the Supervisory Board on the condition:                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  

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|9.                                                                                                                                              | The term "shareholders" in this article shall
      include usufructuaries and pledgees in whom the voting rights on shares
      are vested.
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                               
|Article 41. Venue of meetings.                                                                                                                 
|                                                                                                                                               
|The general meetings of shareholders
        shall be held in Amsterdam, The Hague, Hoofddorp or in the municipality
        of Haarlemmermeer.
|                                                                                                                                               
|Article 42. Chairmanship.                                                                                                                      

|   |                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The general meetings of shareholders shall
      be presided over by the chairman of the Supervisory Board or, in his absence,
      by a vice-chairman of that board; in the event that the latter is (are)
      also absent, the members of the Supervisory Board present shall appoint
      a chairman from their midst. The Supervisory Board may appoint another chairman
      for a general meeting of shareholders.
|  
|2. | If the chairman of a meeting has not been appointed
      in accordance with paragraph 1, the meeting itself shall appoint a chairman.
      Until that moment, a member of the Board of Management designated thereto
      by the Board of Management shall substitute as chairman.                                                                                                                                        
|  

|Article 43. Minutes.
|--------------------
|                    
|1.                  
|                    
|2.                  
|                    

|Article 44. Rights
      to attend meetings. Admission.
|-------------------------------------------------------
|                                                       
|1.                                                     
|                                                       
|2.                                                     
|                                                       
|3.                                                     

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|   | meeting in accordance with paragraph 1. Paragraph
      2 shall be applicablemutatis mutandis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|4. | With respect to the voting rights and the right
      to participate in meetings attached to ordinary bearer shares, the company
      shall apply by analogy the provisions of Sections 88 and 89 of Book 2 of
      the Netherlands Civil Code and recognise as a shareholder the person named
      in a written statement from a Necigef-participant as a Necigef-beneficiary,
      entitled to a given number of ordinary bearer shares belonging to such Necigef-participant's
      collective deposit of ordinary bearer shares in the company and remaining
      thus entitled until the close of the meeting.
|  
|   | A holder of ordinary bearer shares or his proxy
      shall only have admittance to the meeting if the foregoing statement has
      been deposited not later than on the date stated in the notice convening
      the meeting at the place mentioned therein. The receipt issued once such
      statement has been deposited shall give admittance to the meeting. The foregoing
      provisions of this paragraph 4 shall applymutatis
      mutandisto each pledgee or usufructuary of ordinary bearer shares in whom
      voting rights are vested or their proxy.                                               
|  

|5  | The Board of Management has the
      power to determine in the notice convening
      the meeting that for the application of section 117, paragraphs 1
      and 2, of Book 2 of the Netherlands Civil Code,
      the persons that are entitled to attend
      and address meetings and to vote are the persons who have those rights
      on a determined day ("date of registration") and are entered as such in
      a register (or one or more parts thereof) that
      has been designated for that purpose by
      the Board of Management, notwithstanding who is entitled to those
      shares or depositary receipts at the time of the meeting. In this matter
      the provisions of paragraphs 1 up to and including
      4 also apply by analogy on the understanding
      that the statement of the Necigef-participant as referred to
      in paragraph 4 must show that on the relevant date of registration the person
      named in the statement was participant entitled
      to the number of shares specified in the
      statement.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|6  | The date stated in the notice convening
      the meeting as referred to in paragraphs
      1, 2, 4 and 5 shall not be earlier than the seventh day before that
      of the meeting or at some time, so much earlier
      as will be allowed by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|7  | Each share shall entitle to one
      vote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|8  | Each person entitled to vote or
      his proxy shall sign the attendance list.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9  | The members of the Supervisory Board
      and the members of the Board of Management
      shall have an advisory vote at the general meeting of shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10 | The chairman shall decide whether
      persons other than those who shall be admitted
      in accordance with the above provisions of this article shall be
      admitted to the meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|Article 45. Voting.
|-------------------
|                   
|1                  
|                   
|2                  
|                   
|                   
|                   
|                   
|                   
|3                  
|                   
|                   
|4                  
|                   
|5                  
|                   
|6                  
|                   
|7                  
|                   

|CHAPTER XII                    
|-------------------------------
|                               
|Convocations and notifications.
|                               
|Article 46.                    
|                               
|1.                             
|                               
|2.                             
|                               
|3.                             
|                               

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|CHAPTER XIII                                                                                     
|-------------------------------------------------------------------------------------------------
|                                                                                                 
|Amendment of the articles of association.
      Statutory merger. Statutory demerger. Dissolution

|                                                                        
|------------------------------------------------------------------------
|Article 47. Amendment
      of the articles of association. Dissolution.
|                                                                        
|1.                                                                      
|                                                                        
|2.                                                                      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|3.                                                                      

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| | notice convening the general meeting of shareholders
      or announced subsequently as referred to
      in article 40, paragraph 6, and, in the case of an amendment
      to the articles of association, simultaneously a copy of the proposal
      including the verbatim text of the proposed amendment must be deposited
      for inspection at the office of the company and must be made available
      free of charge to shareholders and to the persons referred to in
      article 46, paragraph 2, until the end of the
      meeting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        
|------------------------
|Article 48. Liquidation.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | In the event of dissolution of the company
      pursuant to a resolution of the general meeting, the members of the Board
      of Management shall be charged with the liquidation of the business of the
      company and the Supervisory Board with the supervision thereof.                                                                                                                                                                                                                                                                                                                                                                                  
|  
|2. | During liquidation the provisions of the articles
      of association shall remain in force as far as possible.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|3. | Out of the surplus remaining after settlement
      of the debts shall first be distributed to the holders of the special share
      and the preference shares B the nominal amount paid up on these shares and
      any amount still owed by way of dividend to which these shares entitle,
      insofar as this has not been distributed in previous years. If the balance
      is not sufficient thereto, the distribution shall be made in proportion
      to the amounts paid up on those shares. The remainder shall be distributed
      to the holders of ordinary shares in proportion to the aggregate nominal
      value of their ordinary shares.
|  
|4. | The liquidation shall otherwise be subject
      to the provisions of Part 1 of Book 2 of the Netherlands Civil Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  

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Exhibit
  4.2







EMPLOYMENT AGREEMENT

DATED 14/15 December 2005

BETWEEN

TNT N.V.

AND

MR. C.H. Van Dalen







|Corporate
      Human Resources | 1
|------------------------------- | -

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|The
    undersigned:                  
|--------------------------------------
|                                      
|1.                                    
|                                      
|and                                   
|                                      
|2.                                    
|                                      
|Whereas:                              
|–                                     
|–                                     
|–                                     
|                                      
|Declare
    to have agreed as follows:
|                                      
|1.                                    
|1.1                                   
|                                      
|1.2                                   
|                                      
|1.3                                   
|                                      



|Corporate
      Human Resources | 2
|------------------------------- | -

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|1.4 | The Executive has the
      obligations which have been or will be imposed by law, by the articles of
      incorporation of the Company and in any board regulations as such regulations
      shall apply from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.  | Duration of the
      Agreement and Notice of Termination                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.1 | The agreement has been
      entered into for an indefinite period. The agreement may be terminated with
      due observance of a notice period of three months for the Executive and
      six months for the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.2 | This agreement shall
      terminate in any event, without notice being required, on the first day
      of the month following the date on which the Executive reaches the age of
      65 unless the Executives pension scheme provides for a different date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.  | Base Salary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.1 | The Executive's base
      salary, including holiday allowance, shall amount to EUR600,000 gross per year, which shall be paid in equal instalments at the
      end of each month. The base salary will be reviewed annually by the Remuneration
      Committee and adjusted accordingly by the Supervisory Board in line with
      the remuneration policy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.  | Short Term Incentive
      Bonus Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.1 | The bonus incentive
      plan for the members of the Board of Management as is established from time
      to time by the Supervisory Board, applies to the Executive.The bonus incentive plan is outlined in Exhibit A to this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.  | Long Term Incentive
      Performance Share Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5.1 | The rules of the relevant
      performance share plan of TNT N.V. and its underlying regulations and criteria
      for granting shares, as these are established from time to time by the Supervisory
      Board, apply to the Executive. The performance share plan is outlined in
      Exhibit B to this agreement. Any and all tax consequences related to the
      granting, vesting, exercise and/or sale of shares shall be for the account
      of the Executive. Any shares acquired by the Executive may only be sold,
      if the Executive does not possess inside information at that moment. In
      addition, such shares may not be sold in a closed period. The TNT Rules
      on Insider Trading and the rules of the TNT performance share plan apply
      to the Executive. The grant for 2006 is established at a face value of at
      least EUR 472,650.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6.  | Holidays                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.1 | The Executive shall
      be entitled to 28 holiday days each calendar year. In taking vacation, the
      Executive shall consult with the other members of the Board of Management
      and take into account the interests of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



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|7.   | Company Car                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7.1  | The
        Company shall provide the Executive with a company car commensurate with
        his position under conditions established from time to time by the Supervisory
        Board. As a member of the Board of Management the Executive is entitled
        to a company car with a maximum catalogue price of EUR 110,000 inclusive
        of BPM and VAT. Delivery costs and alarm system installation costs will
        be met by the Company. All the contractual monthly costs of the lease
        such as fuel and regular maintenance shall be for the account of the
    Company.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8.   | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|8.1  | The
        reasonable and customary expenses incurred by the Executive in the execution
        of his business tasks shall be reimbursed by the Company in accordance
        with Company policy and upon receipt of a specified statement of expenses
    and supporting receipts.                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8.2  | The
        Company shall pay an expense allowance of EUR 550 per month for out-of-pocket
        expenses. These expenses shall not be subject to reimbursement as provided
        for in the previous paragraph. Any and all possible tax consequences,
    related to this allowance, shall be for the account of the Executive.                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9.   | Telephone Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9.1  | The
        Company shall pay the costs related to the costs of a private telephone
        provided that the fixed fiscal amount (“forfait”)
        shall be treated as taxable income. In
        addition, the Company shall pay the costs of a mobile telephone and fax
        or other tools of communication related to the position of the Executive.
        Any and all possible tax consequences, related to this arrangement, shall
    be for the account of the Executive.                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.  | Insurance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10.1 | The Executive
        may participate in the collective medical insurance scheme taken out
        by the Company. If the Executive participates, 50% of the premium shall
        be for the account of the Company and paid on a monthly basis, taking
        into account insurance coverage consisting of General Practitioner (GP),
        pharmacy and specialist medical care based on class II B for adults and
    class III for co-insured children.                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.2 | The Company
        shall enroll the Executive under its standard Directors & Officers
        liability insurance. The costs for this insurance shall be for the account
    of the Company.                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.3 | The Company
        shall
take out an accident insurance for the benefit of the Executive. The conditions
    shall be in accordance with the policy, a copy of which shall be                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



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|     | forwarded to the Executive.
      The costs of this insurance shall be for the account of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11.  | Disability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|11.1 | In the event of disability
      of the Executive as defined in article 7:629 of the Dutch Civil Code, the
      Company shall pay to the Executive from the first day of disability 100%
      of the base salary as defined in article 3 up to a maximum of twelve months,
      provided that this payment ends per the day that the Executive makes use
      of the applicable pension arrangement. Periods of disability with an interruption
      of not more than four weeks shall be regarded as linked together. If after
      the period of twelve months the Executive remains disabled, the arrangement
      on disability pension applies as laid down in Appendix C.                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11.2 | The Executive shall
      not be entitled to the salary payment referred to above, if and to the extent
      that he can validly claim damages in connection with his disability from
      a third party on account of loss of salary and if and to the extent that
      the payments by the Company referred to above exceed the minimum obligation
      referred to in article 7:629 sub 1 of the Dutch Civil Code. In this event,
      the Company shall satisfy payment solely by means of an advanced payment
      on the compensation to be received from the third party and upon assignment
      by the Executive of his rights to damages vis-à-vis the third party
      concerned up to the total amount of advanced payments made. The advanced
      payments shall be set off by the Company if the compensation is paid or,
      as the case may be, in proportion.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12.  | Pension                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|12.1 | The Company has taken
      out insurance to cover its pension scheme and disability pension insurance,
      for the benefit of the Executive under the conditions laid down in Exhibit
      C to this agreement. The Executive is aware of the fact that the Company
      is in the process of amending the existing pension scheme and agrees to
      accept (the conditions of) the new scheme, provided these benefits shall
      be substantially similar to the benefits under the current pension scheme
      of the Company for executives at this level.                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13.  | No additional occupation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|13.1 | During the term of
        this agreement, the Executive shall refrain from accepting remunerated
        or time-consuming non-remunerated work activities with or for third parties
        not directly affiliated with the Company or from doing business for his
        own account, without the prior written consent of the Supervisory Board
        of the Company. The Company agrees that the Executive continues his current
        supervisory board task for the Macintosh Retail Group and the supervisory
        board of NIB Capital.                                                                                                                                                                                                                                                                                                                                 



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|14.  | External Supervisory
      Board Memberships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|14.1 | Any external Supervisory
      Board memberships may not contravene the interests of the Company and the
      Executive will not hold more than two memberships at the same time. With
      respect to accepting external Supervisory Board memberships, the Executive
      shall require the prior written consent of the Chairman of the Supervisory
      Board. Before accepting any memberships, the Executive shall provide full
      information regarding the proposed membership to the CEO and Members of
      the Board of Management and the Chairman of the Supervisory Board.                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|15.  | Confidentiality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|15.1 | During the continuance
      of the employment or at any time after the termination thereof the Executive
      shall not, except in the proper course of his duties hereunder or as may
      be required by law, disclose to any person, firm or corporation without
      the previous consent in writing of the Company any and all information concerning
      the business, finance, future plans and proposals, designs, technical processes
      and plans, trade secrets or other confidential information relating to the
      Company or its businesses or affiliated companies or of any customer or
      supplier of which he shall become possessed whilst employed by the Company
      or prior thereto. This restriction shall continue to apply after the termination
      of the employment but shall cease to apply to information or knowledge that
      has come into the public domain.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|16.  | Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|16.1 | The Executive shall
      not have nor keep in his possession any documents and/or correspondence
      and/or data carriers and/or copies thereof in any manner whatsoever, which
      belong to the Company or to affiliated companies and which have been made
      available to the Executive as a result of his employment, except inasfar
      as and for as long as necessary for the performance of his work for the
      Company. In any event the Executive will be obliged to return to the Company
      immediately, without necessitating the need for any request to be made in
      this regard, any and all such documents and/or correspondence and/or data
      carriers and/or copies thereof at termination of this agreement.                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|17.  | Non-Competition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|17.1 | The Executive undertakes
      for a period of twentyfour (24) months after the effective date of termination,
      for whatever reason, not to be employed or involved in any way, directly
      or indirectly, either for his own account or for the account of others,
      in any employment or consulting arrangement, or in any other manner, formally
      or informally, in any enterprise which conducts activities in a field similar
      to or otherwise competes with the activities of the Company or of any of
      its affiliated companies, nor to have any financial interest in any manner,
      directly or indirectly, in such enterprise. Because of the global nature
      of the Company's                                                                                                                                                                                          



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|     | business,
      the Executive and the Company agree that this restriction shall apply worldwide.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|17.2 | The obligation
      in article 17.1 of this agreement does not apply to passively owning common
      shares of such enterprise registered at a Stock Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|18.  | Penalty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|18.1 | In the event
      the Executive breaches the obligations as expressed in articles 13, 14,
      15, 16 or 17, the Executive shall contrary to article 7:650 sub 3, 4 and
      5 of the Dutch Civil Code, without notice of default being required, pay
      to the Company for each such breach a penalty equal to an amount of EUR
      100,000 plus a penalty of EUR 5,000 for each day such breach occurs and
      continues, notwithstanding any other rights the Company may have. The Company
      is entitled to claim full damages by way of alternative to the penalty.                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|19.  | Severance
      Payment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|19.1 | If the Company
      gives notice of termination of this agreement for reasons which are not
      found in acts or omissions which allow summary dismissal for an urgent cause
      as referred to in article 7:677/678 of the Dutch Civil Code and in the absence
      of a Change in Control situation as referred to in article 20, the Company
      shall make available to the Executive a severance payment. This severance
      payment shall be equal to:                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | i.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | ii.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|20.  | Severance
      Payment in Case of a Change in Control                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|20.1 | If, within
      twelve months following a Change in Control and as a direct result of this
      Change in Control, the Company gives notice of termination of this agreement,
      for reasons which are not found in acts or omissions which allow summary
      dismissal for an urgent cause as referred to in article 6:677/678 of the
      Dutch Civil Code, between the Executive and the Company, except in accordance
      with summary dismissal for reasons of misconduct, the Executive shall be
      entitled to receive immediately after the effective date of termination,
      a Terminal Payment.The Terminal Payment, which shall be made less any statutory withholdings,
      shall be received by the Executive in full and final settlement of all claims
      arising out of the Executive's employment with the Company and/or any subsidiary
      of the Company.



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|20.2 | The severance payment
      shall be made available by way of gross lump sum within one month from the
      effective date of termination of the employment agreement and shall be made
      less any statutory withholdings. The Company will co-operate in making this
      sum available at gross level if this is attainable through a levensloopregeling
      or a comparable payment method.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|20.3 | In this
    Clause:                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                         

|     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | “Change
      in Control”means the acquisition by any person,
      or persons, acting in concert of more than 50 percent of the issued share
      capital of the Company conferring the right to attend and vote at general
      meetings of the Company or the substantial reorganisation of the Company
      following sale of whole or part of the Company and resulting in no or a
      lesser position for the Executive
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | “Terminal
      Payment”means the aggregate of the following
      amounts:                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (i)                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | 1If the Executive has not been employed for three consecutive years
        in the Company, the previous percentage bonus or bonuses at his previous
        employer will complement the three bonuses used for the calculation of
        the average bonus of three years, together with the bonus or bonuses at
        the Company. If the Bonus at the previous employer paid with respect to
        bonus year 2005 was zero, this amount is replaced with 60% at target pay-out
        of base salary. Subsequent bonuses used for the calculation, are than
        replaced by the percentages of base salary of the years prior to the previous
        year.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|21.  | Donation
      to the Pension Scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|21.1 | An amount
      of EUR 1,350,000 will be made available to be contributed by the Company
      to the Stichting Ondernemingspensioenfonds TPG with a view to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



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|     | provide
      for pension rights as identified in the offer letter dated 30 November 2005
      under conditions set forth in this clause. The amount will be contributed
      in four equal annual installments, the first in May 2006, the second in
      May 2007, the third in May 2008 and the fourth in May 2009, and shall each
      time only become due and payable to the Stichting Ondernemingspensioenfonds
      TPG under the condition that the Executive is still employed by the Company
      on such payment dates. Any and all possible tax consequences, related to
      this donation, shall be for the account of the Executive.                                                                                                                                                                              
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|21.2 | If
        the relationship is terminated at the initiative of the Company during
        the first term of appointment for reasons which are not found in acts
        or omissions which allow summary dismissal for an urgent reason as referred
        in article 7:677/678 of the Dutch Civil Code, or ends during the first
        term as a result of the death or disability of the Executive, the balance
        of the remaining annual contributions shall be made as scheduled. If the
        relationship comes to an end at the initiative of the Executive, the contribution
        pertaining to the relevant year of leaving the Company will be pro-rated
        for the month in which the relationship comes to an end, within the period
        from beginning of May till the end of April in the next year.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|21.3 | The Company
      will co-operate in making the payments available at gross level through
      a levensloopregeling or a comparable payment method at the choice
      of the Executive if that is attainable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|22.  | Compensation
      for Loss of Existing Long Term Incentive Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|22.1 | An exceptional
      one-off amount of € 1,300,000 as compensation for loss of existing
      long term incentive rights with the current employer of the Executive will
      be paid to an escrow account and become payable to the Executive in four
      equal annual installments, the first in May 2006, the second in May 2007,
      the third in May 2008 and the fourth in May 2009, provided that the Executive
      is still employed by the Company on such payment dates. Normal interest
      conditions of the bank that administers the escrow shall apply. Any and
      all possible tax consequences, related to this special compensation, shall
      be for the account of the Executive.                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|22.2 | If the relationship
      is terminated at the initiative of the Company during the first term of
      appointment for reasons which are not found in acts or omissions which allow
      summary dismissal for an urgent reason as referred in article 7:677/678
      of the Dutch Civil Code, or ends during the first term as a result of the
      death or disability of the Executive, the balance of the annual contributions
      shall be made as scheduled. If the relationship comes to an end at the initiative
      of the Executive, the contribution pertaining to the relevant year of leaving
      the Company will be pro-rated for the month in which the relationship comes
      to an end, within the period from beginning of May till the end of April
      in the next year.                              



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|22.3                                                                                                       | The Company
        will co-operate in making the payments available at gross level through
        a levensloopregeling or a comparable payment method at the
    choice of the Executive if that is attainable.                                                   
|---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                           |                                                                                                                                                                                                                                                                       
|23.                                                                                                        | Housing allowance                                                                                                                                                                                                                                                     
|23.1                                                                                                       | In the
          first year of employment, TNT will provide to the Executive a full
          housing allowance up to a maximum of EUR 4,000 per month. In the following
          years of the first term of appointment, TNT will compensate 50% of
    that amount.
|                                                                                                           |                                                                                                                                                                                                                                                                       
|24.                                                                                                        | Moving and refurbishing
    allowance                                                                                                                                                                                                                                 
|24.1                                                                                                       | The Executive
        is entitled to a one-off net allowance for moving and refurbishing of
    up to € 25,000.                                                                                                                                                       
|                                                                                                           |                                                                                                                                                                                                                                                                       
|25.                                                                                                        | Amendments and
    Previous Agreements                                                                                                                                                                                                                                
|25.1                                                                                                       | Any amendments and/or
        supplements to this agreement can only be made by way of a written document
    signed by both parties.                                                                                                                                 
|                                                                                                           |                                                                                                                                                                                                                                                                       
|25.2                                                                                                       | This agreement
        supersedes all previous agreements between the Executive and the Company
        and/or
any affiliated company and takes their place.                                                                                                          
|                                                                                                           |                                                                                                                                                                                                                                                                       
|26.                                                                                                        | Governing Law,
    No CAO Applicable                                                                                                                                                                                                                                  
|26.1                                                                                                       | This
    agreement is governed by the laws of the Netherlands.                                                                                                                                                                                                        
|                                                                                                           |                                                                                                                                                                                                                                                                       
|26.2                                                                                                       | The TPG
        Collective Labour Agreement is not applicable, with the exception of
        the provisions relating to availability under special circumstances and
        relinquishment of rights pertaining
to inventions.                                       
|                                                                                                           |                                                                                                                                                                                                                                                                       
|This agreement
        has been signed and executed in Hoofddorp in duplicate on 14/15 December,
    2005.
|                                                                                                           |                                                                                                                                                                                                                                                                       
|                                                                                                           |                                                                                                                                                                                                                                                                       

|The Company:                                               |  | The Executive:     | 
|---------------------------------------------------------- |  | ------------------ | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|Mr. J.H.M. Hommen,
      Chairman of the Supervisory Board |  | Mr. C.H. van Dalen | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|                                                           |  |                    | 
|Mr. M.P. Bakker, 
      CEO                                |  |                    | 



|Corporate
      Human Resources | 10
|------------------------------- | --

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Exhibit C

To the employment agreement between TNT N.V.
  and Mr. C.H. Van Dalen
  dated 1 December 2005,



|re:  | The pension scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|1.   | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|1.1. | The Executive
        is eligible for old age pension, supplementary old age pension, disability
        pension, continuance of pension build-up in case of disability and on
        behalf of his spouse and children for spouse and orphans pension
        in accordance with the clauses of the pensionscheme of the Stichting
        Ondernemingspensioenfonds TPG, the Reglement Overgangsbepalingen (regulations
    on transitional provisions) and the addendum to the latter.                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|1.2. | In all
        cases that are not dealt with in this appendix the clauses of the pension
        regulations of the Stichting Ondernemingspensioenfonds TPG, the regulations
        on transitional provisions and the addendum to the latter apply. In event
        of any differences as to the interpretation of any clause the management
        of the Stichting Ondernemingspensioenfonds TPG shall decide after consultation
        with the Company, taking into account the requirements of reasonableness
    and fairness.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.   | Old age pension                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1. | The old
        age pension commences on the first day of the calendar month in which
        the Executive reaches the age of 65 and is paid out up to and including
    the month in which the Executive dies.                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.2. | The yearly
        old age pension amounts per each full year of participation 2% of the
        pension basis as mentioned in the pensionscheme of the Stichting Ondernemingspensioenfonds
        TPG. For a part of a year the yearly old age pension will be determined
        pro rata. The mentioned percentage is applicable as long as legally possible
    according to the Dutch Wage Tax Act.                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.3  | The temporarily
        old age pension as mentioned in the pensionscheme of the Stichting Ondernemingspensioenfonds
        TPG amounts per each full year of participation 2% of the franchise,
        as long
as legally possible according to the Dutch Wage Tax Act.                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|Corporate
      Human Resources | 11
|------------------------------- | --

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Exhibit
  8.1

|TNT N.V.                                                                           |                                                                             
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                             
|LIST OF COMPANIES AS REFERRED
      TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                             
|                                                                                   |                                                                             
|**Country**                                                                        | **Company name**                                                            
|Argentina                                                                          | TNT Argentina
      S.A.                                                    
|Argentina                                                                          | TNT Freight
      Management (Argentina) SA                                 
|Australia                                                                          | Colton Carriers
      (Vic.) Pty. Limited                                   
|Australia                                                                          | Colton Carriers
      (Vic.) Unit Trust                                     
|Australia                                                                          | Dalmet Pty.
      Limited                                                   
|Australia                                                                          | G3 Worldwide
      Mail (Australia) Pty Ltd                                 
|Australia                                                                          | J. McPhee &
      Son (Australia) Holdings Pty. Limited                     
|Australia                                                                          | McPhee Group
      Pension Funds Pty. Limited                               
|Australia                                                                          | McPhee Transport
      Pty. Limited                                         
|Australia                                                                          | Riteway Transport
      Pty. Limited                                        
|Australia                                                                          | TNT Australia
      Pty. Limited                                            
|Australia                                                                          | TNT Express
      Enfield Pty. Limited                                      
|Australia                                                                          | TNT Finance
      Pty. Limited                                              
|Australia                                                                          | TNT Freight
      Management (Australia) Pty. Limited                       
|Australia                                                                          | TNT Pty. Limited                                                            
|Australia                                                                          | TNT Shared
      Services Centre Pty. Limited                               
|Australia                                                                          | TNT Shipping
      & Development Pty. Limited                               
|Australia                                                                          | TNT Shipping
      (Aust.) Pty. Limited                                     
|Australia                                                                          | TNT Superannuation
      Pty. Limited                                       
|Australia                                                                          | VIP Airfreight
      Pty Limited                                            
|Australia                                                                          | VIP Logistics
      Pty Limited                                             
|Australia                                                                          | Wilson Australia
      Holdings Pty. Limited                                
|Austria                                                                            | CAT Transporte
      GmbH                                                   
|Austria                                                                            | Cimedia Printmedienvertriebsgesellschaft
      mbH                          
|Austria                                                                            | G3 Worldwide
      Mail Services GmbH                                       
|Austria                                                                            | GfW - Gesellschaft
      fur Werbemittelverteilung mbH                      
|Austria                                                                            | In-night Express
      Austria GmbH                                         
|Austria                                                                            | M.S. Medienservice
      GmbH                                               
|Austria                                                                            | Print Express
      Zustellservice GmbH                                     
|Austria                                                                            | Redmail Address
      Zustelldienst GmbH                                    
|Austria                                                                            | Redmail Logistik
      & Zustellservice GmbH                                
|Austria                                                                            | Redmail Medienzustellservice
      Oberösterreich GmbH                      
|Austria                                                                            | TNT Express
      (Austria) GmbH                                            
|Bahamas                                                                            | IAC Inc. -
      Bahamas (in liquidation)                                   
|Bahamas                                                                            | Interloc (Bahamas)
      Limited (in liquidation)                           
|Bahamas                                                                            | Wilson Logistics
      Limited - Bahamas (in liquidation)                   
|Bahrain                                                                            | TNT Management
      (Bahrain) EC                                           
|Bahrain                                                                            | TNT Skypak
      International (Bahrain) WLL                                
|Bangladesh                                                                         | TNT Freight
      Management (Bangladesh) Limited                           
|Barbados                                                                           | Great Western
      Assurance Company Limited                               
|Belgium                                                                            | Belgische Distributiedienst
      N.V./S.A.                                 
|Belgium                                                                            | CAT Benelux
      NV/SA                                                     
|Belgium                                                                            | Colandel N.V./S.A.                                                          
|Belgium                                                                            | Data Base Management
      N.V./S.A.                                        
|Belgium                                                                            | De Nationale
      Transport Maatschappij N.V./S.A.                         
|Belgium                                                                            | Denis Bodden
      N.V./S.A.                                                
|Belgium                                                                            | Distribution
      d'Imprimes Publicitaires Sans Adresse N.V./S.A.          
|Belgium                                                                            | Express Belgium
      NV/SA                                                 
|Belgium                                                                            | G3 Worldwide
      (Belgium) NV/SA                                          
|Belgium                                                                            | G3 Worldwide
      (Services) NV/SA                                         
|Belgium                                                                            | Gestion Financière
      Informatisée NV/SA                                 
|Belgium                                                                            | LogiSpring
      Investment Fund N.V./S.A.                                  
|Belgium                                                                            | Logistics International
      NV/SA                                         
|Belgium                                                                            | Maatschappij
      voor Distributie van Periodieken, Pers en PubliciteitBVBA
|Belgium                                                                            | Terinvest CVA                                                               
|Belgium                                                                            | TNT Airways
      NV/SA                                                     
|Belgium                                                                            | TNT Express
      (Belgium) N.V./S.A.                                       
|Belgium                                                                            | TNT Express
      Worldwide (Euro Hub) N.V./S.A.                            
|Belgium                                                                            | TNT Freight
      Management (Belgium) NV/SA                                
|Belgium                                                                            | TNT Innight
      NV/SA                                                     
|Belgium                                                                            | TNT Post Pakketservice
      België N.V./S.A.                               
|Bermuda                                                                            | TNT Global
      Express Limited                                            
|Brazil                                                                             | TNT Brasil
      Participações One Ltda                                     
|Brazil                                                                             | TNT Brasil
      Participações Two Ltda                                     

---



Back to Contents

|TNT N.V.                                                                           |                                                                   
|---------------------------------------------------------------------------------- | ------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                   
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                   
|                                                                                   |                                                                   
|**Country**                                                                        | **Company name**                                                  
|Brazil                                                                             | TNT Express
      Brasil Holdings Ltda                            
|Brazil                                                                             | TNT Express
      Brasil Ltda                                     
|Brazil                                                                             | TNT Gerenciamento
      de Fretes do Brasil Ltda                  
|Bulgaria                                                                           | TNT Bulgaria
      Eood                                           
|Cambodia                                                                           | TNT Express
      Worldwide (Cambodia) Limited                    
|Canada                                                                             | G3 Worldwide
      (Canada) Inc.                                  
|Canada                                                                             | TNT Express
      (Canada) Ltd.                                   
|Canada                                                                             | TNT Freight
      Management (Canada) Limited                     
|Cayman Islands                                                                     | Logispring
      II, L.P.                                         
|Chile                                                                              | Inversiones
      TNT Limited y Compania Ltda                     
|Chile                                                                              | TNT Express
      Worldwide (Chile) Carga Ltda                    
|Chile                                                                              | TNT Freight
      Management (Chile) SA                           
|China                                                                              | Mach++ Express
      Worldwide Limited                            
|China                                                                              | TNT (China)
      Holdings Company Limited                        
|China                                                                              | TNT Direct
      Marketing Services (Shanghai) Company Limited    
|China                                                                              | TNT Express
      and Logistics Co., Ltd., Beijing                
|China                                                                              | TNT Express
      Worldwide (China) Limited                       
|China                                                                              | TNT Freight
      Management (Shanghai) Limited                   
|Croatia                                                                            | CAT Logistics
      Cargo Limited                                 
|Croatia                                                                            | CAT Logistics
      Vehicles Limited                              
|Cyprus                                                                             | TNT Express
      Worldwide (Cyprus) Limited                      
|Czech Republic                                                                     | Agentura Manon,
      Spol Sro (in liquidation)                   
|Czech Republic                                                                     | DIMAR s.r.o.                                                      
|Czech Republic                                                                     | DomiCall sro                                                      
|Czech Republic                                                                     | TNT Express
      Worldwide, spol. s.r.o. - Czech Republic        
|Czech Republic                                                                     | TNT Innight
      Czech Republic s.r.o.                           
|Czech Republic                                                                     | TNT Post CR
      s.r.o.                                          
|Denmark                                                                            | Exceed Denmark
      A/S                                          
|Denmark                                                                            | Net Danmark
      Express A/S                                     
|Denmark                                                                            | TNT Danmark
      A/S                                             
|Denmark                                                                            | TNT Freight
      Management (Denmark) A/S                        
|Denmark                                                                            | TNT Norden
      A/S                                              
|Denmark                                                                            | Wilson Denmark
      Holding A/S                                  
|Egypt                                                                              | TNT Egypt Limited                                                 
|Estonia                                                                            | TNT Express
      Worldwide Eesti AS                              
|Fiji                                                                               | TNT Express
      Worldwide Limited                               
|Finland                                                                            | Exceed Finland
      Oy                                           
|Finland                                                                            | Logipro Oy                                                        
|Finland                                                                            | Oy Speditionsservice
      I.N.T. Aktiebolag                      
|Finland                                                                            | Polar Air &
      Seacargo Oy                                     
|Finland                                                                            | TNT Freight
      Management (Finland) Oy                         
|Finland                                                                            | TNT Suomi Oy                                                      
|France                                                                             | Cambronne Gestion
      Sas                                       
|France                                                                             | CAT - Compagnie
      d'Affrètement et de Transport SA            
|France                                                                             | CAT Logistics
      Cargo France SA                               
|France                                                                             | COMATRAN -
      Société de Consignation Maritime et de Transit SA
|France                                                                             | G3 Worldwide
      (France) SAS                                   
|France                                                                             | GAL - Global
      Automotive Logistics Sas                       
|France                                                                             | SETH SA (Société
      d'Exploitation du Terminal Havrais)        
|France                                                                             | SGAN SA (Société
      Générale d'Armement et de Naviation)       
|France                                                                             | TNT Express
      France Snc                                      
|France                                                                             | TNT Express
      International Snc                               
|France                                                                             | TNT Express
      National Snc                                    
|France                                                                             | TNT Fashion
      Group France Sas                                
|France                                                                             | TNT France
      Holding Snc                                      
|France                                                                             | TNT France
      Ile de France Sarl                               
|France                                                                             | TNT Freight
      Management (France) SAS                         
|France                                                                             | TNT Side Snc                                                      
|France                                                                             | TNT Spare Snc                                                     
|Germany                                                                            | Briefpartner
      System AG                                      
|Germany                                                                            | CAT GmbH                                                          
|Germany                                                                            | CAT Logistics
      Cargo GmbH                                    
|Germany                                                                            | CBS City Briefservice
      GMbH                                  
|Germany                                                                            | Cendris Customer
      Contact Deutschland GmbH                   

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|TNT N.V.                                                                           |                                                                          
|---------------------------------------------------------------------------------- | -------------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                          
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                          
|                                                                                   |                                                                          
|**Country**                                                                        | **Company name**                                                         
|Germany                                                                            | Cendris Deutschland
      GmbH (in liquidation)                          
|Germany                                                                            | Factora Factoring
      und Inkasso GmbH                                 
|Germany                                                                            | G3 Worldwide
      Mail (Germany) GmbH                                   
|Germany                                                                            | Jet Services
      Deutschland GmbH                                      
|Germany                                                                            | Jet Services
      Deutschland NVS GmbH (in liquidation)                 
|Germany                                                                            | PostCon Deutschland
      AG                                             
|Germany                                                                            | PostCon Dienstleistungs
      GmbH                                       
|Germany                                                                            | Regio-ES GmbH
      Private Briefbeförderung                             
|Germany                                                                            | RIDAS Sicherheits-
      und Handelsgesellschaft mbH                     
|Germany                                                                            | TNT Akademie
      Gesellschaft für Training und Personalentwicklung GmbH
|Germany                                                                            | TNT Express
      Beteiligungsgesellschaft mbH                           
|Germany                                                                            | TNT Express
      GmbH                                                   
|Germany                                                                            | TNT Express
      Holdings Germany GmbH                                  
|Germany                                                                            | TNT Freight
      Management (Germany) GmbH                              
|Germany                                                                            | TNT Holdings
      (Deutschland) GmbH                                    
|Germany                                                                            | TNT Informations
      Systeme GmbH                                      
|Germany                                                                            | TNT Innight
      GmbH & Co. KG                                          
|Germany                                                                            | TNT Innight
      Management (Europe) GmbH                               
|Germany                                                                            | TNT Mehrwertlogistik
      GmbH                                          
|Germany                                                                            | TNT Post AG
      & Co. KG                                               
|Germany                                                                            | TNT Post Direktwerbung
      Nord GmbH                                   
|Germany                                                                            | TNT Post Direktwerbung
      Ost GmbH                                    
|Germany                                                                            | TNT Post Direktwerbung
      Ost Werbeservice GmbH                       
|Germany                                                                            | TNT Post Direktwerbung
      Ost Zustelldienste GmbH (in liquidation)    
|Germany                                                                            | TNT Post Direktwerbung
      Süd GmbH                                    
|Germany                                                                            | TNT Post Direktwerbung
      Südwest GmbH                                
|Germany                                                                            | TNT Post Geschäftsführungs
      AG                                      
|Germany                                                                            | TNT Post Holding
      GmbH                                              
|Germany                                                                            | TNT Post Mediaservice
      GmbH                                         
|Germany                                                                            | TNT Post Regioservice
      ABL gGmbH                                    
|Germany                                                                            | TNT Post Regioservice
      GmbH                                         
|Germany                                                                            | TNT Post Regioservice
      mailXpress GmbH                              
|Germany                                                                            | TNT Post Zustellservice
      GmbH                                       
|Germany                                                                            | Trias Beteiligungs
      GmbH                                            
|Germany                                                                            | Trias GmbH                                                               
|Germany                                                                            | Turbo P.O.S.T.
      GmbH                                                
|Greece                                                                             | TNT Skypak
      (Hellas) Limited                                        
|Hong Kong                                                                          | Combined Logistics
      (Hong Kong) Limited                             
|Hong Kong                                                                          | Concord Global
      Trade & Transport Limited                           
|Hong Kong                                                                          | G3 Worldwide
      Mail (HK) Limited                                     
|Hong Kong                                                                          | Scanfreight
      H.K. Limited                                           
|Hong Kong                                                                          | Supply Chain
      Solutions (Hong Kong) Limited                         
|Hong Kong                                                                          | TNT (H.K.)
      Limited                                                 
|Hong Kong                                                                          | TNT Capital
      Investments Limited                                    
|Hong Kong                                                                          | TNT Express
      Worldwide (HK) Limited                                 
|Hong Kong                                                                          | TNT Freight
      Management (Far East) Limited                          
|Hong Kong                                                                          | TNT Freight
      Management (Hong Kong) Limited                         
|Hungary                                                                            | G3 Worldwide
      Hungary Kft                                           
|Hungary                                                                            | NVS Hungary
      Express Service Szolgáltató Kft                        
|Hungary                                                                            | TNT Express
      Worldwide Hungary Kft                                  
|Hungary                                                                            | TNT Ingatlanhasznosito
      Kft.                                        
|Hungary                                                                            | TNT Logisztikai
      Kereskedelmi es Szolgaltato Kft                    
|India                                                                              | ARC India Private
      Limited                                          
|India                                                                              | G3 Worldwide
      Mail Logistics (India) Private Limited                
|India                                                                              | TNT India Private
      Limited                                          
|Indonesia                                                                          | P.T. Skypak
      International                                          
|Ireland                                                                            | GD Insurance
      Company Limited                                       
|Ireland                                                                            | Mercury Re
      Limited                                                 
|Ireland                                                                            | TNT Express
      (Ireland) Limited                                      
|Ireland                                                                            | TNT Express
      Worldwide Limited                                      
|Ireland                                                                            | TNT Retail
      Express Limited                                         
|Ireland                                                                            | TNT Skypak
      International (Ireland) Limited                         
|Ireland                                                                            | TNT Transport
      (N.I.) Limited                                       
|Isle of Man                                                                        | Sayer &
      Company (Transport - I.O.M.) Limited                       

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|TNT N.V.                                                                           |                                                                                                          
|---------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                                                          
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                                                          
|                                                                                   |                                                                                                          
|**Country**                                                                        | **Company name**                                                                                         
|Israel                                                                             | TNT Express
      Worldwide (Israel) Limited                                                             
|Italy                                                                              | EML Srl                                                                                                  
|Italy                                                                              | Florence For
      You Srl                                                                               
|Italy                                                                              | Gibiesse Italia
      Srl                                                                                
|Italy                                                                              | Logika Servizi
      Srl                                                                                 
|Italy                                                                              | Patavina Servizi
      Srl                                                                               
|Italy                                                                              | Piramide Servizi
      Srl                                                                               
|Italy                                                                              | Telepost SpA                                                                                             
|Italy                                                                              | TG Distribuzioni
      Srl                                                                               
|Italy                                                                              | TNT Central
      Services Srl                                                                           
|Italy                                                                              | TNT Global
      Express SpA                                                                             
|Italy                                                                              | TNT Post Italia
      SpA                                                                                
|Italy                                                                              | TNT Post Milano
      Srl                                                                                
|Italy                                                                              | TNT Post Notifiche
      Srl                                                                             
|Italy                                                                              | TNT Post Services
      Srl                                                                              
|Italy                                                                              | TNT Services
      SpA                                                                                   
|Italy                                                                              | TWM Italia
      Srl                                                                                     
|Japan                                                                              | G3 Worldwide
      Mail (Japan) Inc.                                                                     
|Japan                                                                              | TNT Customs
      Clearance Service (Japan) Inc.                                                         
|Japan                                                                              | TNT Express
      Worldwide (Japan) Inc                                                                  
|Jordan                                                                             | TNT Express
      Worldwide Jordan private shareholding company                                          
|Korea                                                                              | TNT Express
      Corporation                                                                            
|Korea                                                                              | TNT Freight
      Management (Korea) Limited                                                             
|Kuwait                                                                             | TNT Express
      Worldwide Kuwait Company WLL / Diya Abdul Latif Adbul Hussain Al-Kazemi
      & Partner
|Latvia                                                                             | TNT Latvia
      Sia                                                                                     
|Lithuania                                                                          | UAB TNT                                                                                                  
|Luxemburg                                                                          | Ilres S.A.                                                                                               
|Luxemburg                                                                          | Telecontact
      Luxembourg Sarl (in liquidation)                                                       
|Luxemburg                                                                          | TNT Express
      Luxembourg SA                                                                          
|Malaysia                                                                           | G3 Worldwide
      Mail (Malaysia) Sdn Bhd                                                               
|Malaysia                                                                           | TNT Express
      Worldwide (M) Sdn Bhd                                                                  
|Malaysia                                                                           | TNT Freight
      Management (Malyasia) Sdn Bhd                                                          
|Malaysia                                                                           | TNT Overnite
      (M) Sdn Bhd                                                                           
|Mauritius                                                                          | TNT Document
      Services Limited                                                                      
|Mexico                                                                             | Combined Logistics
      International Mexico SA de CV                                                   
|Mexico                                                                             | Compania de
      asesoramiento de transporte SA                                                         
|Mexico                                                                             | TNT Express
      Worldwide Mexico SA de CV                                                              
|Namibia                                                                            | TNT Express
      Worldwide (Namibia) (Proprietary) Limited                                              
|Netherlands                                                                        | 15-25JAAR.NL
      B.V.                                                                                  
|Netherlands                                                                        | Bruna B.V.                                                                                               
|Netherlands                                                                        | Bruna Winkels
      B.V.                                                                                 
|Netherlands                                                                        | BSC South Africa
      B.V.                                                                              
|Netherlands                                                                        | Cendris BSC
      Customer Contact B.V.                                                                  
|Netherlands                                                                        | Cendris Dataconsulting
      B.V.                                                                        
|Netherlands                                                                        | Cendris Document
      Presentment B.V.                                                                  
|Netherlands                                                                        | Cendris Print
      Management B.V.                                                                      
|Netherlands                                                                        | City Courier
      Nederland B.V.                                                                        
|Netherlands                                                                        | De Digitale
      Brievenbus B.V.                                                                        
|Netherlands                                                                        | DGI Direct
      Marketing Europe B.V.                                                                   
|Netherlands                                                                        | Distribution
      Services Europe B.V.                                                                  
|Netherlands                                                                        | Easymall B.V.                                                                                            
|Netherlands                                                                        | Euro Mail B.V.                                                                                           
|Netherlands                                                                        | European Data
      & Print Services B.V.                                                                
|Netherlands                                                                        | European Mail
      Networks Holding B.V.                                                                
|Netherlands                                                                        | G3 Worldwide
      Europe B.V.                                                                           
|Netherlands                                                                        | G3 Worldwide
      Mail N.V.                                                                             
|Netherlands                                                                        | G3 Worldwide
      Netherlands B.V.                                                                      
|Netherlands                                                                        | GD Net B.V.                                                                                              
|Netherlands                                                                        | Gelders Holding
      B.V.                                                                               
|Netherlands                                                                        | Gelders Overslag-
      en Expeditie Beheer B.V.                                                         
|Netherlands                                                                        | Gelders Spetra
      International B.V.                                                                  
|Netherlands                                                                        | HiResponse
      B.V.                                                                                    
|Netherlands                                                                        | Independent
      Mail B.V. in liquidatie                                                                

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|TNT N.V.                                                                           |                                                   
|---------------------------------------------------------------------------------- | --------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                   
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                   
|                                                                                   |                                                   
|**Country**                                                                        | **Company name**                                  
|Netherlands                                                                        | Interpost Group
      of Companies B.V.           
|Netherlands                                                                        | Interpost Handling
      B.V.                     
|Netherlands                                                                        | Koninklijke
      TNT Post B.V.                   
|Netherlands                                                                        | Logispring
      Investment Fund Holding B.V.     
|Netherlands                                                                        | Loyalty Profs
      B.V.                          
|Netherlands                                                                        | Netwerk VSP
      B.V.                            
|Netherlands                                                                        | Netwerk VSP
      Geadresseerd B.V.               
|Netherlands                                                                        | Postkantoor-Winkel
      B.V.                     
|Netherlands                                                                        | Postkantoren
      B.V.                           
|Netherlands                                                                        | Prime Vision
      B.V.                           
|Netherlands                                                                        | PSP Sub Holding
      B.V.                        
|Netherlands                                                                        | PTT Post Holdings
      B.V.                      
|Netherlands                                                                        | PTT Post Logistiek
      Maarssen B.V.            
|Netherlands                                                                        | Seducom B.V.                                      
|Netherlands                                                                        | Telecontact
      International B.V.              
|Netherlands                                                                        | Telekado B.V.                                     
|Netherlands                                                                        | TNT China Holdings
      B.V.                     
|Netherlands                                                                        | TNT Contract
      Logistics Management B.V.      
|Netherlands                                                                        | TNT Europe
      Finance B.V.                     
|Netherlands                                                                        | TNT Express
      Finance B.V.                    
|Netherlands                                                                        | TNT Express
      Holdings B.V.                   
|Netherlands                                                                        | TNT Express
      Insurance B.V.                  
|Netherlands                                                                        | TNT Express
      Nederland B.V.                  
|Netherlands                                                                        | TNT Express
      Properties (Berlin) B.V.        
|Netherlands                                                                        | TNT Express
      Properties (Frankfurt) B.V.     
|Netherlands                                                                        | TNT Express
      Properties (München) B.V.       
|Netherlands                                                                        | TNT Express
      Properties (Stuttgart) B.V.     
|Netherlands                                                                        | TNT Express
      Road Network B.V.               
|Netherlands                                                                        | TNT Express
      Worldwide N.V.                  
|Netherlands                                                                        | TNT Fashion
      Group B.V.                      
|Netherlands                                                                        | TNT Finance
      B.V.                            
|Netherlands                                                                        | TNT Freight
      Management (Amsterdam) B.V.     
|Netherlands                                                                        | TNT Freight
      Management (Europoort) B.V.     
|Netherlands                                                                        | TNT Freight
      Management (Rotterdam) B.V.     
|Netherlands                                                                        | TNT Freight
      Management Holdings B.V.        
|Netherlands                                                                        | TNT Freight
      Management Netherlands B.V.     
|Netherlands                                                                        | TNT Headoffice
      B.V.                         
|Netherlands                                                                        | TNT Holdings
      (Benelux) B.V.                 
|Netherlands                                                                        | TNT Holdings
      B.V.                           
|Netherlands                                                                        | TNT Innight
      B.V.                            
|Netherlands                                                                        | TNT International
      Mail Holdings B.V.        
|Netherlands                                                                        | TNT Real Estate
      B.V.                        
|Netherlands                                                                        | TNT Real Estate
      Development B.V.            
|Netherlands                                                                        | TNT Shipping
      International B.V.             
|Netherlands                                                                        | TNT Skypak
      Finance B.V.                     
|Netherlands                                                                        | TNT Skypak
      Holdings B.V.                    
|Netherlands                                                                        | TNT Skypak
      International (Netherlands) B.V. 
|Netherlands                                                                        | TNT Transport
      International B.V.            
|Netherlands                                                                        | XP International
      B.V.                       
|Netherlands antilles                                                               | Scansped Concord
      N.V.                       
|Netherlands antilles                                                               | TNT Express
      N.V.                            
|Netherlands antilles                                                               | TNT Skypak
      Holdings N.A.N.V.                
|New Zealand                                                                        | TNT Express
      Worldwide (NZ) Limited          
|New Zealand                                                                        | TNT Freight
      Management (New Zealand) Limited
|New Zealand                                                                        | TNT New Zealand
      Limited                     
|New Zealand                                                                        | TNT Skypak
      International (NZ) Limited       
|Norway                                                                             | TNT Freight
      Management (Norway) AS          
|Norway                                                                             | TNT Norge AS                                      
|Papoua New Guinea                                                                  | Air Transport
      Industries (A.T.I.) Limited   
|Papoua New Guinea                                                                  | MCC Holdings
      Limited                        
|Papoua New Guinea                                                                  | Moresby Customs
      and Cartage Pty. Limited    
|Papoua New Guinea                                                                  | PNG Air Charter
      Services Limited            
|Papoua New Guinea                                                                  | PNG Air Freight
      Limited                     
|Papoua New Guinea                                                                  | TNT (PNG) Limited                                 

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|TNT N.V.                                                                           |                                                                                                    
|---------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                                                    
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                                                    
|                                                                                   |                                                                                                    
|**Country**                                                                        | **Company name**                                                                                   
|Papoua New Guinea                                                                  | Trans Melanesian
      Airways Limited                                                             
|Philippines                                                                        | Amihan Management
      Services Inc.                                                              
|Philippines                                                                        | Pacific East
      Asia Cargo Airlines Inc. - PEAC                                                 
|Philippines                                                                        | Sasakyan Holdings,
      Inc.                                                                      
|Philippines                                                                        | TNT Express
      Worldwide (Phils.), Inc.                                                         
|Poland                                                                             | CAT Logistics
      Cargo Polska Sp zoo                                                            
|Poland                                                                             | CAT Polska
      Sp zoo                                                                            
|Poland                                                                             | TNT Express
      Worldwide (Poland) Sp zoo                                                        
|Portugal                                                                           | Bleckmann &
      Meyer Transitos Internacionais, Limitada                                         
|Portugal                                                                           | Bleckmann (Portugal)
      Transitarios Internacionais, Limitada                                   
|Portugal                                                                           | CAT - Companhia
      de Afretamentos e de Transportes, Limitada                                   
|Portugal                                                                           | CAT Logistics
      Cargo Portugal Sarl                                                            
|Portugal                                                                           | TNT Express
      Worldwide (Portugal) Transitarios, Transportes e Servicos Complementares
      SA
|Romania                                                                            | TNT Romania
      Srl                                                                              
|Russian Federation                                                                 | CAT Vehicle
      Logistics Limited                                                                
|Russian Federation                                                                 | G3 Worldwide
      Mail LLC (Russia)                                                               
|Russian Federation                                                                 | TNT Express
      Worldwide (CIS) Limited Liability Company                                        
|Singapore                                                                          | G3 Worldwide
      Aspac Private Limited                                                           
|Singapore                                                                          | G3 Worldwide
      Distribution (Singapore) Private Limited                                        
|Singapore                                                                          | G3 Worldwide
      Mail (Singapore) Private Limited                                                
|Singapore                                                                          | Supply Chain
      Solutions (Asia Pacific) Private Limited                                        
|Singapore                                                                          | TNT Express
      Worldwide (Singapore) Private Limited                                            
|Singapore                                                                          | TNT Freight
      Management (Singapore) Private Limited                                           
|Singapore                                                                          | Vines Services
      Private Limited (in liquidation)                                              
|Slovakia                                                                           | Dimar Slovakia
      Sro                                                                           
|Slovakia                                                                           | TNT Express
      Worldwide spol. s.r.o. - Slovakia                                                
|Slovakia                                                                           | TNT Innight
      Slovak Republic s.r.o.                                                           
|Slovakia                                                                           | TNT Post Slovensko
      s.r.o.                                                                    
|Slovenia                                                                           | CAT Logistic
      Transportna Doo                                                                 
|Slovenia                                                                           | TNT Express
      Worldwide, distribucija, d.o.o.                                                  
|South Africa                                                                       | CendrisBSC
      South Africa Contact Centre (Proprietary) Limited                                 
|South Africa                                                                       | TNT Express
      Worldwide (South Africa) (Proprietary) Limited                                   
|Spain                                                                              | CAT Auditorias
      Srl                                                                           
|Spain                                                                              | CAT España,
      Fletamentos y transportes SA                                                     
|Spain                                                                              | CAT Inspecciones
      Srl                                                                         
|Spain                                                                              | CAT Logistics
      Cargo España Sarl                                                              
|Spain                                                                              | CAT Manipulaciones
      Palencia Srl                                                              
|Spain                                                                              | CAT Manipulaciones
      Valladolid Srl                                                            
|Spain                                                                              | International
      Mail (Spain) Sl                                                                
|Spain                                                                              | J. Lebre Transitarios
      LDA                                                                    
|Spain                                                                              | Pan Air Lineas
      Aereas SA                                                                     
|Spain                                                                              | TG Plus Transcamergomez,
      S.A.                                                                
|Spain                                                                              | TNT Express
      Worldwide (Spain), S.L.                                                          
|Sweden                                                                             | Cargo Center
      Sweden Aktiebolag                                                               
|Sweden                                                                             | Cargo Center
      Sweden KB                                                                       
|Sweden                                                                             | Cargo Link
      Aktiebolag                                                                        
|Sweden                                                                             | Exceed Aktiebolag                                                                                  
|Sweden                                                                             | Exceed Sweden
      Aktiebolag                                                                     
|Sweden                                                                             | G3 Worldwide
      (Sweden) AB                                                                     
|Sweden                                                                             | Godshantering
      Landvetter Aktiebolag                                                          
|Sweden                                                                             | Malmö
      Flygfraktterminal Aktiebolag                                                           
|Sweden                                                                             | Malmö
      Flygfraktterminal KB                                                                   
|Sweden                                                                             | SACT Aktiebolag                                                                                    
|Sweden                                                                             | TNT Forwarding
      Holdings Aktiebolag                                                           
|Sweden                                                                             | TNT Freight
      Management (Sweden) Aktiebolag                                                   
|Sweden                                                                             | TNT Freight
      Management Holding Aktiebolag                                                    
|Sweden                                                                             | TNT Sverige
      Aktiebolag                                                                       
|Sweden                                                                             | United Consolidation
      Service Aktiebolag                                                      
|Sweden                                                                             | Wilson Overseas
      Aktiebolag                                                                   
|Switzerland                                                                        | Compagnie d'Affrètement
      et de Transport CAT (Suisse) Sarl                                    
|Switzerland                                                                        | Fashionet AG                                                                                       
|Switzerland                                                                        | G3 Worldwide
      Mail (Switzerland) AG                                                           
|Switzerland                                                                        | PostLogistics
      Innight AG                                                                     

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|TNT N.V.                                                                           |                                                                    
|---------------------------------------------------------------------------------- | -------------------------------------------------------------------
|GROUP TOTAL PER 31 DECEMBER
      2006                                             |                                                                    
|LIST OF COMPANIES AS
      REFERRED TO IN ARTICLE 2:379 AND 2:414 DUTCH CIVIL CODE |                                                                    
|                                                                                   |                                                                    
|**Country**                                                                        | **Company name**                                                   
|Switzerland                                                                        | TNT Swiss Post
      AG                                            
|Taiwan                                                                             | TNT Freight
      Management (Taiwan) Limited                      
|Thailand                                                                           | T.E.I. Limited                                                     
|Thailand                                                                           | TNT Express
      Worldwide (Thailand) Co. Limited                 
|Thailand                                                                           | TNT Freight
      Management (Thailand) Limited                    
|Turkey                                                                             | TNT International
      Express Tasimacilik Ticaret Limited Sirketi
|United Arab Emirates                                                               | TNT (UAE) LLC                                                      
|United Arab Emirates                                                               | TNT Freight
      Management (UAE) L.L.C.                          
|United Kingdom                                                                     | Archive and
      Data Storage Limited                             
|United Kingdom                                                                     | Bleckmann (Holding)
      U.K. Limited                             
|United Kingdom                                                                     | Bleckmann Distribution
      Limited                               
|United Kingdom                                                                     | Bleckmann Logistics
      Limited                                  
|United Kingdom                                                                     | CAT UK Services
      Limited                                      
|United Kingdom                                                                     | CD Marketing
      Services Group Limited                          
|United Kingdom                                                                     | Cendris 1 Limited                                                  
|United Kingdom                                                                     | Cendris Limited                                                    
|United Kingdom                                                                     | Cendris UK
      Limited                                           
|United Kingdom                                                                     | Equity Credit
      Services Limited                               
|United Kingdom                                                                     | G3 Worldwide
      Mail (UK) Limited                               
|United Kingdom                                                                     | KEY Logistics
      Limited                                        
|United Kingdom                                                                     | Lifecycle Marketing
      (Mother & Baby) Limited                  
|United Kingdom                                                                     | MR Digital
      Capture Services Limited                          
|United Kingdom                                                                     | PPIC (UK) Limited                                                  
|United Kingdom                                                                     | Project Hurricane
      Limited                                    
|United Kingdom                                                                     | PTT Post UK
      Holdings Limited                                 
|United Kingdom                                                                     | Site Leasing
      Worldwide Limited                               
|United Kingdom                                                                     | The Data Depot
      (Midlands) Limited                            
|United Kingdom                                                                     | TNT Despatcher
      Limited                                       
|United Kingdom                                                                     | TNT Employment
      Services Limited                              
|United Kingdom                                                                     | TNT Europe
      Limited                                           
|United Kingdom                                                                     | TNT European
      Airlines Limited                                
|United Kingdom                                                                     | TNT Express
      Worldwide (UK) Limited                           
|United Kingdom                                                                     | TNT Express
      Worldwide Investments Limited                    
|United Kingdom                                                                     | TNT Freight
      Management (UK) Limited                          
|United Kingdom                                                                     | TNT Holdings
      (UK) Limited                                    
|United Kingdom                                                                     | TNT Newco Limited                                                  
|United Kingdom                                                                     | TNT NN1 Limited                                                    
|United Kingdom                                                                     | TNT Offshore
      Islands Express Limited                         
|United Kingdom                                                                     | TNT Post (Doordrop
      Media) Limited                            
|United Kingdom                                                                     | TNT Post North
      Limited                                       
|United Kingdom                                                                     | TNT Post Scotland
      Limited                                    
|United Kingdom                                                                     | TNT Post South
      West Limited                                  
|United Kingdom                                                                     | TNT Post UK
      Limited                                          
|United Kingdom                                                                     | TNT SPC Limited                                                    
|United Kingdom                                                                     | TNT Transport
      (Europe) PLC                                   
|United Kingdom                                                                     | TNT Transport
      Limited                                        
|United Kingdom                                                                     | TNT UK Limited                                                     
|United Kingdom                                                                     | TNT Worldwide
      Air Express (U.K.) Limited                     
|United States of America                                                           | Combined Logistics
      (U.S.A.) Inc.                             
|United States of America                                                           | G3 Worldwide
      (Services) Inc.                                 
|United States of America                                                           | G3 Worldwide
      (US) Inc.                                       
|United States of America                                                           | MR/Lason LLC                                                       
|United States of America                                                           | TNT Express
      Worldwide Holdings Inc.                          
|United States of America                                                           | TNT Freight
      Management (USA), Inc.                           
|United States of America                                                           | TNT USA Inc.                                                       
|Venezuela                                                                          | Wilson Logistics
      de Venezuela, C.A. (in liquidation)         
|Vietnam                                                                            | TNT Vietnam
      Limited                                          
|Vietnam                                                                            | TNT-Vietrans
      Express Worldwide (Vietnam) Company Limited     
|Virgin Islands (U.S)                                                               | Brilliant Jade
      Investment Company Limited                    
|Zimbabwe                                                                           | TNT Express
      Worldwide (Zimbabwe) (Private) Limited           

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Exhibit
      12.1

|I,
      M.P. Bakker,
certify that:
|-----------------------------------
|                                   
|1.                                 
|                                   
|2.                                 
|                                   
|3.                                 
|                                   
|4.                                 
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|5.                                 
|                                   
|                                   
|                                   
|                                   
|                                   



|Date: 23
    February, 2007 |  | 
|--------------------------- |  | 
|                            |  | 
|                            |  | 
|                            |  | 
|/s/ M.P.
    BAKKER         |  | 
|                            |  | 
|Chief
    Executive Officer |  | 

1

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Exhibit
      12.2

|I,
    C.H. van Dalen, certify that:
|------------------------------------
|                                    
|1.                                  
|                                    
|2.                                  
|                                    
|3.                                  
|                                    
|4.                                  
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|5.                                  
|                                    
|                                    
|                                    
|                                    



|Date: 23
    February, 2007 |  | 
|--------------------------- |  | 
|                            |  | 
|                            |  | 
|                            |  | 
|/s/ C.H.
    VAN DALEN      |  | 
|                            |  | 
|Chief Financial
    Officer |  | 

1

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Exhibit
      13.1

CERTIFICATION
PURSUANT TO18
U.S.C. SECTION 1350
AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of TNT N.V. (the “Company”) on Form 20-F for the period ended December 31, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, M.P. Bakker, the Chief Executive Officer of the Company, certify pursuant to 18 U.S.C., section 1350, that to my knowledge, on the date hereof:

| | (1) | To the best of my knowledge, the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                               
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                  
| | (2) | To the best of my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



|Date: 23
    February, 2007 |  | 
|--------------------------- |  | 
|                            |  | 
|                            |  | 
|                            |  | 
|/s/ M.P.
    BAKKER         |  | 
|                            |  | 
|Chief
    Executive Officer |  | 
|                            |  | 

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Exhibit
      13.2

CERTIFICATION
PURSUANT TO18 U.S.C. SECTION 1350 
AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with
the Annual Report of TNT N.V. (the “Company”) on Form 20-F for the
period
ended December 31, 2006 as filed with the Securities and Exchange Commission
(the “Report”), I, C.H. van Dalen, the Chief Financial Officer of the Company,
certify pursuant to 18 U.S.C., section 1350, that to my knowledge, on the date
hereof:

| | (1) | To the best of my knowledge, the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                               
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                  
| | (2) | To the best of my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



|Date:
    23 February, 2007 |  | 
|--------------------------- |  | 
|                            |  | 
|                            |  | 
|                            |  | 
|/s/ C.H.
    VAN DALEN      |  | 
|                            |  | 
|Chief
    Financial Officer |  | 
|                            |  | 

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SIGNATURE

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

|                         |  |  | TNT
      N.V.                                         | 
|------------------------ |  |  | ------------------------------------------------------ | 
|                         |  |  |                                                        | 
|                         |  |  |                                                        | 
|                         |  |  |                                                        | 
|                         |  |  | By: /s/
    M. P. Bakker                               | 
|                         |  |  |                                                        | 
|                         |  |  | Name: M.
    P. Bakker                                 | 
|                         |  |  | Title:
    Chairman of the Board of Management and CEO | 
|                         |  |  |                                                        | 
|Date: 1
      March 2007 |  |  |                                                        | 
|                         |  |  |                                                        | 

---