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UNITED
  STATES 
  SECURITIES AND EXCHANGE COMMISSION

Washington,
  D.C. 20549

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

|(Mark One)                                                                             
|---------------------------------------------------------------------------------------
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|Date
        of event requiring this shell company report..............................
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|TNT N.V.                                                      
|--------------------------------------------------------------
|(Exact
        name of Registrant as specified in its charter)

|Not
        Applicable                                  | The
        Netherlands                                
|------------------------------------------------------- | -------------------------------------------------------
|(Translation
        of Registrants name into English) | (Jurisdiction
        of incorporation or organization)

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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 | New York Stock Exchange                           
|Ordinary shares, par
      value €0.48                                 |                                                   

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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: | 479,999,999 | 
| | ---------------------- | ----------- | 
| | 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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  2005
          Annual Report and Form 20-F |Orange
          on the inside


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ORANGE ON THE INSIDE The employees depicted
    in this annual report have, through their individual actions and team efforts,
    made an extraordinary contribution to TNTs success as a company. They
    have exhibited all the best aspects of our companys personality in the
    course of making their contribution. We call this orange on the inside.
    To TNT, orange is more than a colour. It is an idea, a feeling, an attitude
    and a way of doing things. The employees in this annual report and their colleagues
    around the world are orange on the inside.


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|2005
        Annual Report and Form 20-F |  | 3
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PRESENTATION OF INFORMATION
    AND EXCHANGE RATES Unless otherwise specified
    or the context requires otherwise, us, we, our,
    TNT and the company refer to TNT N.V. and all its
    group companies as defined in article 24b, part 1, book 2 of the Dutch Civil
    Code. References to dollars,
    US dollars and $ are to United States dollars. References
    to euro and € are to the currency introduced
    at the start of the second stage of the Economic and Monetary Union pursuant
    to the Treaty establishing the European Economic Community as amended by the
    Treaty on the European Union. Our financial statements are reported in euro. In 2004 we prepared our
    consolidated financial statements in accordance with accounting principles
    generally accepted in the Netherlands (Dutch GAAP). As of 2005, all European
    listed companies are required to prepare their consolidated financial statements
    in accordance with International Financial Reporting Standards (IFRS) as adopted
    by the European Union. As a result our 2005 consolidated financial statements
    have been prepared in accordance with IFRS, and the comparative 2004 data
    has been adjusted to IFRS. 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. A detailed explanation of the transition to IFRS and the
    impact on our financial numbers is given in chapter 12. 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 34 to our consolidated financial statements. US dollar amounts presented
    are unaudited and have been translated solely for your convenience from euro
    into US dollars at an exchange rate of $1.1842 per €1.00, the noon buying
    rate in the City of New York on 30 December 2005 for cable transfers as certified
    by the Federal Reserve Bank of New York. We do not represent that the US dollar
    amounts presented 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. Historical exchange rate information can be found
    in chapter 15, page 212.





SELECTED FINANCIAL
    DATA Since we are a non-US
    company that is a first-time adopter of IFRS, the United States Securities
    and Exchange Commission (SEC) has permitted us to present one year of comparative
    data instead of the normally required two years of comparative data. The selected consolidated
    financial income statements data for the year ended 31 December 2005 and 2004
    and the selected consolidated financial balance sheets data as at 31 December
    2005 and 2004 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 2005 has been derived
    from our audited consolidated financial statements. Prior years US GAAP
    selected consolidated financial data have not been adjusted to reflect the
    impact of our discontinued logistic business, other than the disposal of our
    French logistics business. We have acquired a number
    of companies and businesses during the years, that are included in the following
    financial data, which limits the comparability of our year-on-year figures.




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|4 |  | 2005 Annual Report
      and Form 20-F
|- |  | --------------------------------------

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|                                                                  |                                                                                                                     |         | Year
        ended and position at 31 December
|----------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ------- | ----------------------------------------------
|Selected
      financial data                                     |                                                                                                                     | 2005    |                                               
|                                                                  |                                                                                                                     |         | US$                                           
|                                                                  |                                                                                                                     |         |                                               
|INCOME
        STATEMENT                                          |                                                                                                                     |         |                                               
|                                                                  |                                                                                                                     |         |                                               
|Total
        revenues                                            |                                                                                                                     | 11,967  |                                               
|                                                                  |                                                                                                                     |         |                                               
|Other
        income                                              |                                                                                                                     | 45      |                                               
|                                                                  |                                                                                                                     |         |                                               
|Salaries
        and social security contributions                |                                                                                                                     | (4,042  | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Depreciation,
        amortisation and impairments                |                                                                                                                     | (379    | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Other
        expenses                                            |                                                                                                                     | (6,219  | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Total
        operating expenses                                  |                                                                                                                     | (10,640 | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Total
        operating income                                    |                                                                                                                     | 1,372   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Profit
        before income taxes                                |                                                                                                                     | 1,363   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Profit
        for the period from continuing operations          |                                                                                                                     | 913     |                                               
|                                                                  |                                                                                                                     |         |                                               
|Profit/(loss)
        from discontinued operations                |                                                                                                                     | (131    | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Profit
        attributable to the shareholders                   |                                                                                                                     | 780     |                                               
|                                                                  |                                                                                                                     |         |                                               
|RATIOS                                                            |                                                                                                                     |         |                                               
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Operating
        margin (%) 1                                                                                      |         | 11.5                                          
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Average
        number of outstanding shares (in millions)                                                          |         | 454.4                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        per ordinary share (in cents) 2                                                                    |         | 171.7                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        from continuing operations per ordinary share (in cents) 2                                         |         | 200.9                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        from discontinued operations per ordinary share (in cents)2                                        | (28.8   | )                                             
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Average
        number of outstanding shares on diluted basis (in millions)                                         | 456.4   |                                               
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        per diluted share (in cents) 2                                                                     |         | 171.7                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        from continuing operations per diluted share (in cents) 2                                          |         | 200.1                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Earnings
        from discontinued operations per diluted share (in cents) 2                                        |         | (28.7                                         
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Dividend
        per share (in cents) 3                                                                             |         | 74.6                                          
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | Dividend
        pay-out ratio (%) 4                                                                                |         | 43.4                                          
|                                                                  |                                                                                                                     |         |                                               
|BALANCE
        SHEET                                             |                                                                                                                     |         |                                               
|                                                                  |                                                                                                                     |         |                                               
|Non-current
        assets                                        |                                                                                                                     | 4,338   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Current
        assets                                            |                                                                                                                     | 2,789   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Assets
        held for sale                                      |                                                                                                                     | 2,816   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Total
        assets                                              |                                                                                                                     | 9,943   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Equity                                                            |                                                                                                                     | 3,883   |                                               
|                                                                  |                                                                                                                     |         |                                               
|                                                                  | as
        % of total liabilities and equity                                                                        |         | 39.1                                          
|                                                                  |                                                                                                                     |         |                                               
|Non-current
        liabilities                                   |                                                                                                                     | 1,904   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Current
        liabilities                                       |                                                                                                                     | 2,699   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Liabilities
        related to assets classified as held for sale | 1,457                                                                                                               |         | 1,230                                         
|                                                                  |                                                                                                                     |         |                                               
|Total
        liabilities and equity                              |                                                                                                                     | 9,943   |                                               
|                                                                  |                                                                                                                     |         |                                               
|CASH
        FLOW STATEMENT CONTINUED OPERATIONS                  |                                                                                                                     |         |                                               
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash from operating activities                        |                                                                                                                     | 1,165   |                                               
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash used in investing activities                     |                                                                                                                     | (314    | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash used in financing activities                     |                                                                                                                     | (922    | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Changes
        in cash and cash equivalents                      |                                                                                                                     | (71     | )                                             
|                                                                  |                                                                                                                     |         |                                               
|CASH
        FLOW STATEMENT DISCONTINUED OPERATIONS               |                                                                                                                     |         |                                               
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash from operating activities                        |                                                                                                                     | 33      |                                               
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash used in investing activities                     |                                                                                                                     | (22     | )                                             
|                                                                  |                                                                                                                     |         |                                               
|Net
        cash used in financing activities                     |                                                                                                                     | 22      |                                               
|                                                                  |                                                                                                                     |         |                                               
|Changes
        in cash and cash equivalents                      |                                                                                                                     | 33      |                                               
|                                                                  |                                                                                                                     |         |                                               
|(in millions,
      unless otherwise stated)                      |                                                                                                                     |         |                                               
|1                                                                 | Operating
        income as percentage of the total revenues.                                                       |         |                                               
|2                                                                 | Profit
        attributable to the shareholders divided by the average number of (diluted)
        ordinary shares.
|3                                                                 | For
        2005 on a proposed basis.                                                                               |         |                                               
|4                                                                 | Dividend
        as percentage of earnings per share (EPS).                                                         |         |                                               
|                                                                  |                                                                                                                     |         |                                               

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|2005
        Annual Report and Form 20-F |  | 5
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|                                                                 |        |      |        |      | Year
        ended and position at 31 December
|---------------------------------------------------------------- | ------ | ---- | ------ | ---- | ----------------------------------------------
|Selected
      financial data US GAAP                            | 2005   | 2004 | 1      | 2003 | 1                                             
|                                                                 | US$    |      | €      |      | €                                             
|                                                                 |        |      |        |      |                                               
|Total revenues                                                   | 15,798 |      | 13,341 |      | 12,328                                        
|                                                                 |        |      |        |      |                                               
|Total operating income                                           | 1,503  |      | 1,269  |      | 1,215                                         
|                                                                 |        |      |        |      |                                               
|Profit before income
      taxes                                 | 1,414  |      | 1,194  |      | 1,135                                         
|                                                                 |        |      |        |      |                                               
|Profit for the period
      from continuing operations           | 931    |      | 786    |      | 739                                           
|                                                                 |        |      |        |      |                                               
|Profit/(loss) from
      discontinued operations                 | (180   | )    | (152   | )    | (25                                           
|                                                                 |        |      |        |      |                                               
|Profit attributable
      to the shareholders                    | 749    |      | 632    |      | 714                                           
|                                                                 |        |      |        |      |                                               
|Profit attributable
      to minority interest                   | 2      |      | 2      |      |                                               
|                                                                 |        |      |        |      |                                               
|Earnings per outstanding
      ordinary share (in cents)         | 164.8  |      | 139.1  |      | 151.9                                         
|                                                                 |        |      |        |      |                                               
|Earnings per outstanding
      diluted ordinary share (in cents) | 164.1  |      | 138.5  |      | 151.7                                         
|                                                                 |        |      |        |      |                                               
|                                                                 |        |      |        |      |                                               
|                                                                 |        |      |        |      |                                               
|Non-current assets                                               | 5,997  |      | 5,064  |      | 5,006                                         
|                                                                 |        |      |        |      |                                               
|Current assets                                                   | 3,948  |      | 3,334  |      | 3,160                                         
|                                                                 |        |      |        |      |                                               
|Assets held for sale                                             | 14     |      | 12     |      |                                               
|                                                                 |        |      |        |      |                                               
|Total assets                                                     | 9,959  |      | 8,410  |      | 8,166                                         
|                                                                 |        |      |        |      |                                               
|Equity                                                           | 3,285  |      | 2,774  |      | 2,641                                         
|                                                                 |        |      |        |      |                                               
|as
      % of total liabilities and equity                       | 33.0   |      | 33.0   |      | 32.3                                          
|                                                                 |        |      |        |      |                                               
|Non-current liabilities                                          | 2,837  |      | 2,396  |      | 2,602                                         
|                                                                 |        |      |        |      |                                               
|Current liabilities                                              | 3,837  |      | 3,240  |      | 2,923                                         
|                                                                 |        |      |        |      |                                               
|Liabilities related
      to assets classified as held for sale  |        |      |        |      |                                               
|                                                                 |        |      |        |      |                                               
|Total liabilities
      and equity                               | 9,959  |      | 8,410  |      | 8,166                                         
|                                                                 |        |      |        |      |                                               
|

|(in millions,
      unless otherwise stated) |                                                                                                                                                                                                                                                                                               
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1                                            | Prior
        years have been adjusted to reflect the logistics French business that
        qualifies as discontinued operations under US GAAP.                                                                                                                                              
|2                                            | Number
        of shares used in calculation differ from number of shares used to calculate
        earnings per share under IFRS. The second tranche of shares repurchased
        from the State of the Netherlands were accounted for in 2004 under US
        GAAP and in 2005 under IFRS.

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|6 |  | 2005 Annual Report
      and Form 20-F
|- |  | --------------------------------------

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|2005
        Annual Report and Form 20-F |  | 7
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TABLE OF



CONTENTS





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|8 |  | 2005 Annual Report
      and Form 20-F
|- |  | --------------------------------------

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|CHAPTER |     | TABLE
        OF CONTENTS                                                                                                  | 8   | 
|------- | --- | -------------------------------------------------------------------------------------------------------------------------- | --- | 
|        | 1.  | FROM
      THE CEO                                                                                                         | 12  | 
|        | 2.  | INFORMATION
      ON THE COMPANY                                                                                           | 17  | 
|        | 3.  | THE
      MAIL DIVISION                                                                                                    | 27  | 
|        | 4.  | THE
      EXPRESS DIVISION                                                                                                 | 38  | 
|        | 5.  | THE
      DISCONTINUED LOGISTICS OPERATIONS                                                                                | 49  | 
|        | 6.  | REPORT
      OF THE SUPERVISORY BOARD                                                                                      | 55  | 
|        | 7.  | CORPORATE
      GOVERNANCE                                                                                                 | 60  | 
|        | 8.  | BUSINESS
      PRINCIPLES AND SOCIAL RESPONSIBILITY                                                                        | 72  | 
|        | 9.  | REMUNERATION
      REPORT                                                                                                  | 77  | 
|        | 10. | RISK
      FACTORS                                                                                                         | 83  | 
|        | 11. | OTHER
      FINANCIAL INFORMATION ON THE COMPANY                                                                           | 93  | 
|        | 12. | FINANCIAL
      STATEMENTS                                                                                                 | 109 | 
|        |     | REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                              | 111 | 
|        |     | CONSOLIDATED
      BALANCE SHEETS                                                                                          | 112 | 
|        |     | CONSOLIDATED
      STATEMENTS OF INCOME                                                                                    | 113 | 
|        |     | CONSOLIDATED
      CASH FLOW STATEMENTS                                                                                    | 114 | 
|        |     | CONSOLIDATED
      STATEMENTS OF CHANGES IN TOTAL EQUITY                                                                   | 115 | 
|        |     | NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS                                                                       | 116 | 
|        |     | GENERAL
      INFORMATION AND DESCRIPTION OF OUR BUSINESS                                                                  | 116 | 
|        |     | SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES                                                                           | 116 | 
|        |     | ADOPTION
      OF IAS 32 AND IAS 39                                                                                        | 123 | 
|        |     | RECENT
      IFRS PRONOUNCEMENTS                                                                                           | 124 | 
|        |     | CRITICAL
      ACCOUNTING ESTIMATES AND JUDGEMENTS                                                                         | 124 | 
|        |     | FINANCIAL
      RISK MANAGEMENT                                                                                            | 125 | 
|        |     | TRANSITION
      TO INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN
      UNION                     | 126 | 
|        |     | NOTES
      TO THE CONSOLIDATED BALANCE SHEETS                                                                             | 131 | 
|        |     | NOTES
      TO THE CONSOLIDATED STATEMENTS OF INCOME                                                                       | 143 | 
|        |     | NOTES
      TO THE CONSOLIDATED CASH FLOW STATEMENTS                                                                       | 155 | 
|        |     | ADDITIONAL
      NOTES                                                                                                     | 157 | 
|        |     | TNT
      N.V. CORPORATE BALANCE SHEETS                                                                                    | 175 | 
|        |     | TNT
      N.V. CORPORATE STATEMENTS OF INCOME                                                                              | 175 | 
|        |     | NOTES
      TO THE CORPORATE BALANCE SHEETS AND STATEMENTS OF INCOME                                                       | 176 | 
|        |     | OTHER
      INFORMATION                                                                                                    | 184 | 
|        |     | EXTRACT
      FROM THE ARTICLES OF ASSOCIATION ON APPROPRIATION OF PROFIT                                                  | 184 | 
|        |     | APPROPRIATION
      OF PROFIT                                                                                              | 184 | 
|        |     | SPECIAL
      CONTROL RIGHTS UNDER THE ARTICLES OF ASSOCIATION OF SPECIAL SHARE                                            | 184 | 
|        |     | OTHER
      ARRANGEMENTS WITH THE STATE OF THE NETHERLANDS                                                                 | 184 | 
|        | 13. | REGULATORY
      ENVIRONMENT                                                                                               | 186 | 
|        | 14. | ADDITIONAL
      INFORMATION                                                                                               | 192 | 
|        | 15. | INVESTOR
      RELATIONS                                                                                                   | 209 | 
|        | 16. | CROSS
      REFERENCES TABLE TO FORM 20-F                                                                                  | 216 | 
|        |     |                                                                                                                            |     | 
|        |     | This annual report
      constitutes TNT N.V.s annual report for 2005 in accordance with Dutch
      regulations.         |     | 
|        |     | It also forms the basis
      of our annual report on Form 20-F for the year ended 31 December 2005 for
      the SEC.     |     | 
|        |     |                                                                                                                            |     | 
|        |     | The report of the Board
      of Management is included in chapter 2 up to and including chapter 5 and
      chapter 11.   |     | 
|        |     |                                                                                                                            |     | 
|        |     | This annual report
      has been sent in hard copy form to shareholders who have requested to receive
      a copy        |     | 
|        |     | and can be viewed on
      our website: group.tnt.com. The information on our website, however, does
      not             |     | 
|        |     | form part of this annual
      report.                                                                                     |     | 
|        |     |                                                                                                                            |     | 
|        |     | TNT N.V. is a public
      limited liability company incorporated under the laws of the Netherlands
      currently listed |     | 
|        |     | on the Amsterdam, New
      York, London and Frankfurt stock exchanges.                                                    |     | 
|        |     |                                                                                                                            |     | 
|        |     | Investing in our securities
      involves risk. Carefully consider the risk factors set out in Chapter 10
      of        |     | 
|        |     | this annual report.                                                                                                        |     | 



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        Annual Report and Form 20-F |  | 9
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|TO GUIDE YOUR READING
      OF THIS DOCUMENT, PLEASE FIND BELOW A SUMMARY OF EACH CHAPTERS CONTENTS. |  | CHAPTER
        1contains the CEO letter to our shareholders
        and all other readers reviewing 2005 and looking forward to 2006.                                                                                                                                                                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER2discusses high-level information on our company,
        giving the reader a quick inside look into our strategy and the group
        operating and financial review and prospects.                                                                                                                                                                                                                                                                        
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTERS
        3 and 4discuss in more detail our mail and
        express divisions, respectively. Each chapter contains a business overview,
        the divisions strategy, an operational overview and a financial
        overview. Chapter 3 on mail also gives a short summary of the regulatory
        environment in which our mail business operates. More comprehensive information
        on this regulatory environment can be found in chapter 13.
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER5discusses our discontinued logistics business.                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER6contains the report of our Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER7discusses corporate governance. This chapter
        gives an overview of our procedures and the checks and balances that govern
        the way we manage our company.                                                                                                                                                                                                                                                                                     
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER8deals with our Business Principles, as well
        as our social responsibility policy and humanitarian efforts.                                                                                                                                                                                                                                                                                                                                           
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER9contains our remuneration report. It comprises
        our remuneration policy and the detailed compensation plan for our Board
        of Management and Supervisory Board.                                                                                                                                                                                                                                                                                
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER10cautions against undue reliance on forward-looking
        statements and presents an overview of risk factors concerning our company
        and its business.                                                                                                                                                                                                                                                                                            
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER11discusses certain financial information for
        the company, in particular with regard to cash flow, liquidity, capital
        resources and critical accounting policies.                                                                                                                                                                                                                                                                            
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER12contains our financial statements in accordance
        with IFRS and requirements as prescribed by the SEC, information as required
        by article 392, part 9, book 2 of the Dutch Civil Code and other financial
        information.                                                                                                                                                                                                               
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER13discusses in detail the regulatory environment
        in which our mail business operates.                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER14contains additional information, including
        a description of our relationship with the State of the Netherlands and
        the rights attached to our shares.                                                                                                                                                                                                                                                                                      
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER15discusses other information of interest to
        our shareholders, including with respect to the performance of our shares.                                                                                                                                                                                                                                                                                                                              
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                      |  | CHAPTER16contains a cross reference table specifying
        where the various items required by Form 20-F can be found in this document.                                                                                                                                                                                                                                                                                                                           
|                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     





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|Chapter
      1 | 
|--------------- | 

---



FROM



THE CEO





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|From
        the CEO | Chapter
        1
|-------------------- | -----------------

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STRATEGY REFINEMENT: 
    FOCUS ON
      NETWORKS,
    SALE OF LOGISTICS,
      AND
    €1
      BILLION SHARE BUY BACK PROGRAMME.  DEAR SHAREHOLDERS, Last
    year - 2005 - was an important year for TNT. Following a strategic review
    that started end 2004, we decided to focus on what we do better than anyone
    else: expertly managing transportation networks for providing delivery services.
    This focus on networks is founded on three fundamental pillars: 
      a network-based business
        is attractive intrinsically because greater volume leads to lower costs
        and service enhancement for our customers,
      we - at TNT - have
        a superior network performance based on strong management capabilities,
        one of the bestnetwork
        infrastructures in Europe and an intense focus on customer service, and
      we - at TNT - will
        be in the position to leverage our portfolio of mail and express networks
        to take advantage ofthe
        increasing numbers of customers who are using multiple products. We believe that this
    focus will result in faster growth and a higher yield for our shareholders.
    The refined strategy we announced in December 2005 means we move forward as
    a mail and express company, with company-owned operations in 60 countries
    around the world and activities in more than 200 countries. It also means
    we will exit the logistics business. As the first mail company to roll out
    mail networks abroad and the first express operator to establish an integrated
    road and air network in Europe, we have established a firm track record of
    being first movers in setting up delivery networks. Our networks provide unrivalled
    service quality to our customers, and have provided industry-leading profit
    margins for our shareholders. Our focus strategy will make us build on that
    track record to strive to become the first pan-European mail company. After
    becoming the number one express company in Europe, in the next few years we
    will focus on achieving the same in key emerging markets, like Brazil, Russia,
    India and China. In our mission statement,
    we mention four main groups of stakeholders: customers, employees, shareholders
    and the world. We structure our annual review by looking at what we were able
    to do for these groups. OUR CUSTOMERSAs for any company, TNTs
    success lies first and foremost in the satisfaction of our clients. That is
    why we started our first global customer satisfaction survey in 2005, involving
    a random sample of customers from each of our operations. The results of this
    satisfaction survey show that 89% of our customers were satisfied. At the
    same time, the average number of our loyal, active weekly trading customers
    increased by more than




100,000. The bulk of this
    increase was in express, where we continue to make customer care a key selling
    point. In a move from a customer-focused to a customer-centric approach, TNT
    Express focuses on delighting its customers, because this will lead to doing
    more business with current customers as well as being more often recommended
    by them to other potential customers. Our TNT mail networks
    in the United Kingdom and Germany gained important new customers as well.
    We achieved high revenue growth in these areas in 2005, for the second year
    more than compensating for a drop in domestic mail volume in the Netherlands.
    Customers are clearly appreciating an alternative to the national mail operator
    services in these countries. TNT Mail now has operations and is growing in
    five other European countries, positioning us effectively on the road towards
    our strategic objective of becoming the first pan-European mail company. In 2005, we started a
    rebranding process, bringing our entire company under the banner of the TNT
    brand. As our mail divisions activities continue to expand in Europe,
    this single brand will generate marketing synergies as well as an unequivocal
    face towards our clients. We remain committed to
    increasing the value and service options we offer our customers. Last year
    we expanded our express road networks in Eastern Europe, the Middle East and
    China, while launching a new road network in South-east Asia. We are also
    preparing to add two Boeing 747s in 2006 and 2007 to our air fleet, which
    will connect our European and Chinese networks. Our new focus on network
    management has lead us to the planned sale of our contract logistics activities
    before the end of 2006, excluding our freight management and innight operations,
    which remain with TNT. In conformity with the new IFRS accounting standards
    we have adopted for this annual report, this decision means that we report
    on our non-network logistics as discontinued operations. We will
    do everything we can to prevent the sale from having negative consequences
    for our customers. We will continue to serve them well, and we are sure that
    they will benefit from working with a company with logistics as its core business
    once the sale is completed, which we expect to take place before the end of
    2006. OUR EMPLOYEESThe title of this years
    annual report is Orange on the inside. We have researched the unique
    characteristics of the TNT brand, talking to customers, suppliers and employees,
    and we found a personality grouped around the qualities of can-do,
    in-touch and ordinary people. The employees portrayed in this
    annual report have all in some way demonstrated these characteristics and
    all have a story that tells how they, like thousands of their colleagues around
    the world, live the TNT brand personally. It flows through their veins. In
    short, they are truly orange on the inside.


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|Chapter
      1 | From the CEO
|--------------- | ------------

---

The satisfaction of our
    customers is achieved through the dedication of our employees, by their willingness
    and ability to go the extra mile and to do whatever is necessary to exceed
    our customers expectations. We consider this so important that we have
    tied the engagement of our employees into our senior managements remuneration
    scheme. We will be starting a global engagement study in 2006. In all likelihood, this
    year will also be the year in which we say farewell to 37,000 logistics colleagues.
    We owe them sincere thanks, as they have helped to make this company what
    it is. For myself and on behalf of all their TNT mail and express colleagues,
    I would like to express our profound appreciation for their contribution and
    wish them all the best in the future. OUR SHAREHOLDERSLast year was also eventful
    from our shareholders point of view. In January, we completed the repurchase
    of 13.1 million ordinary shares from the State of the Netherlands. The subsequent
    sale in July of another 43.4 million shares by the State reduced its shareholding
    in TNT to approximately 10%. In the summer, it became
    clear that the performance of our French logistics business had again deteriorated.
    We announced the intended sale of all our non-contract logistics activities
    in France at the time of the publication of our half-year results. This sale
    was recently completed. More than 95% of the employees involved have retained
    their jobs with that business following the sale. In September, our Supervisory
    Board audit committee took the lead in our tax investigations analyses. All
    investigations placed an enormous burden on our company, its management and
    our Supervisory Board. We are pleased that the integrity investigations are
    concluded and that the integrity of present and past members of our Board
    of Management and current senior staff, reporting to the Board of Management,
    is not in doubt. In this annual report,
    we provide clear disclosure of the risks to which our company could be exposed
    as a result of a range of tax matters. Currently we have concluded that no
    liability exists beyond what we had already accrued for. Also no assessment
    by any tax authority related to the matter under the investigation has been
    received. A contingent liability of between €150 and €550 million
    has been disclosed as part of our financial statements. It has taken a great
    deal of time to analyse these issues and their complexity prevented us from
    estimating their potential impact as soon as we would have liked. We publicised our refined
    focus strategy in December. I have already discussed the operational consequences
    of this refined strategy, but the €1 billion share buy back programme
    we announced at the same time is likely to be of special interest to our shareholders.
    We will continue to look for the best capital structure and our aim is to
    offer attractive returns to our shareholders. The refined strategy was well
    received by




the financial market,
    as demonstrated by the 36% increase in our share price at year-end. This means
    that over the course of 2005, TNTs total shareholder return was up 35.8%
    from the previous year, well over the AEX average. Our relative performance
    to the Euronext Amsterdam (AEX) at closing prices during 2005 (AEX index rebased
    to our company).    Total shareholder returns
    in 2005  On 12 December 2005 Exel
    was taken over by Deutsche Post World Net. In 2006, we will focus
    on becoming fully Sarbanes-Oxley 404 compliant. While implementing this set
    of strict governance rules is far from routine, it will enable us to document
    and prove our governance is in order. OUR WORLDYou will have noticed our
    firm conviction that we do not exist just to generate profits and benefit
    our customers, our employees and our shareholders. We also wish to operate
    responsibly in the world in which we live. When we reviewed the results of
    our stakeholder dialogues we held in cooperation with the World Economic Forum,
    it was clear that one of the key concerns regarding TNT lies in the impact
    our activities have on the environment. This has led us to launch a new initiative,
    Driving Clean, through which we intend to reduce the harmful emissions of
    our vehicles. We are currently investigating the possibility of retrofitting
    our current fleet with soot filters, while in the future we intend to only
    purchase vehicles that conform with Euro 5, years before this environmental
    standard becomes a legal requirement in 2009. In September, our efforts
    in social responsibility led to TNTs entering the Dow Jones Sustainability
    Index. We were proud


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|From
        the CEO | Chapter
        1
|-------------------- | -----------------

---

to see that in our first
    year in this index, which lists the best performing sustainability oriented
    companies in each industry, we were ranked as industry leader. This is a fine
    basis and offers encouragement for further improving our social responsibility
    performance. We are also proud to publish our second social responsibility
    report on the same day as our annual report. We completed a third
    successful year with our partnership with the United Nation World Food Programme
    (WFP). Our experience with disaster logistics, developed over the years through
    our work with WFP, enabled us to react quickly when the tsunami struck Asia
    end 2004 and continuing well into 2005. Our first people were on-scene in
    the worst-hit area Banda Aceh within a matter of days. In the end, we were
    involved in relief operations in 10 disaster-struck countries. We were also
    able to offer assistance in the aftermath of the earthquake in Pakistan. LOOKING FORWARDAs we go forward as a mail
    and express company, our focus will be to leverage our skills in managing
    delivery networks. In December 2005, we revised TNT Mails (European
    Mail Network) long term growth target to €1.7 billion at a 10% margin
    by 2012, and our mid term growth expectation for TNT Express to 10 to 15%
    annually. We will do everything we can to meet these goals together with optimising
    our capital structure. On behalf of the Board
    of Management, I would like to thank all our stakeholders, customers, employees
    and shareholders for their ongoing support. Kind regards,


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| | Chapter
        2
| | -----------------



INFORMATION



ON THE



COMPANY



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|Chapter
      2 | Information on the
      company
|--------------- | --------------------------------

---

GROUP BUSINESS DESCRIPTION GENERALTNT N.V. is a public limited liability company and was incorporated
    under the laws of the Netherlands on 29 December 1997. We changed our name
    from TNT Post Group N.V. to TPG N.V. on 6 August 2001 and from TPG N.V. to
    TNT N.V. on 11 April 2005. Our registered office's address is Neptunusstraat
    41-63, 2132 JA Hoofddorp, the Netherlands. Our telephone number is +31 20
    500 6000. We are a holding company. We were formed in connection with the
    consummation of a demerger transaction pursuant to which our former parent
    company, Koninklijke PTT Nederland N.V. (KPN), demerged its mail, express
    and logistics divisions. Although the demerger became effective on 28 June
    1998, its arrangements were effective retroactive to 1 January 1998. We provide a wide range
    of mail, express, freight management and logistics services worldwide, although
    we are discontinuing most of our logistics business. 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. Although TNT N.V. has
    existed as an independent company only since 1998, our history goes back over
    a much longer period of time. The roots of our mail division stretch back
    more than 200 years and are firmly embedded within the operations of Royal
    TPG Post B.V. Our express business has been meeting the need for time-sensitive
    door-to-door delivery services for 60 years. We have evolved from
    being the public postal company in the Netherlands into an international group
    providing mail, express, freight management and logistics services. As a result,
    we have broadened the range of our activities from mainly postal operations
    in the Netherlands to include worldwide express and logistics services. 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.
    Our other services are not subject to such specific regulations. Other than
    for reserved postal services, which our mail business has the exclusive right
    to provide under the Dutch Postal Act, our mail business, as well as our other
    businesses, are subject to competition. We are subject to the
    Enabling Act, as last amended by act of 1 November 2001. Pursuant to the Enabling
    Act in connection with the Dutch Postal Act, we have been granted the Postal Concession, which is performed
    by our subsidiary Royal TPG Post B.V. See chapters 3 and 13. Pursuant to the
    Enabling Act we are furthermore subject to the full large company regime.
    See for more details chapter 7. The State of the Netherlands
    is our largest shareholder, owning approximately 10% of our outstanding ordinary
    shares. The State of the Netherlands furthermore has always held




and holds
    a special share that gives it the right to approve certain decisions that
    lead to fundamental changes in our group structure. We are currently listed
    on the Amsterdam, New York, London and Frankfurt stock exchanges. On 20 February
    2006 we announced our intention to delist from the London and Frankfurt stock
    exchanges in the first half of 2006, as the costs and requirements for these
    listings are not justified by the low trading volume in our shares at both
    stock exchanges. MISSION AND STRATEGYOur mission is to exceed customers expectations in the
    transfer of their goods and documents around the world. We seek to deliver
    value to our customers by providing the most reliable and efficient solutions
    in distribution and network management. We seek to lead the industry by: 
      instilling
        pride in our people,
      creating
        value for our shareholders, and
      sharing
        responsibility for our world.In
        December 2005, we announced a refined strategy to focus on what we do
        best: providing delivery services by expertly managing transportation
        networks for providing delivery services. This refined strategy is focussed
        and decisive; we believe it contains manageable execution risks and is
        based on our core strength. The objective is to achieve profitable growth.
        Three key elements guide the way forward:
      focus
        on our core capability: providing delivery services by expertly managing
        a portfolio of networks, in particular delivery networks, in mail (both
        in the Netherlands and a number of other core European markets), express,
        and network logistics in Europe and Asia, where we believe our competitive
        advantage can be sustained and enhanced, and shareholder value can be
        created. We aim to accelerate growth in the networks organically as well
        as through selected acquisitions. In addition to our home market in Europe,
        further growth is targeted from Asia via development of a cross-border
        road network in South-east Asia and expansion of domestic road networks
        in China and India. In the future, we intend to expand the strategy by
        developing a European standard parcels service offering,
      exit
        most of our logistics activities, as these do not fit with our core capability
        of managing networks. Logistics characteristics are quite different from
        the network businesses of express and mail. Contract logistics is a business
        that demands high project management skills for each contract, rather
        than for the business as a whole. Solutions are generally unique to each
        customer. Over the last few years, margins in the contract logistics industry
        have continued to decline. Creating a sustainable competitive cost advantage
        is not easy. Given that TNT has not yet been able to reach the break-even
        point relative to the cost of capital, we intend to exit the largest part
        of the logistics division (non-network logistics, accounting for €3.6
        billion of revenues in 2005). We plan to retain


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|Information
        on the company | Chapter
        2
|---------------------------------- | -----------------

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the
        network logistics businesses, consisting of freight management and innight
        services, and to integrate them into the express division, and
      our
        strong and predictable cash flow from the network strategy should allow
        us to optimise our capital structure whilst maintaining sufficient headroom
        for future growth opportunities. The long term capital strategy is to
        maintain our investment grade credit rating. As a result we are executing
        an open-market €1 billion share buy back programme (amounting to
        approximately 42.6 million shares) announced and started on 6 December
        2005 and, subject to unforeseen events, we have the intention to use the
        cash proceeds from the sale of our discontinued logistics operations to
        make further share repurchases, pay dividends or invest in compelling
        value creating opportunities. Based on our refined
    strategy we will now manage our business through two divisions: mail and express,
    with the express division including both our express and our freight management
    businesses. The parts of our former logistics division that we intend to exit
    are reported as discontinued operations/assets held for sale. Optimisation
    of our organisation will be considered during 2006. REBRANDINGTo highlight the increasing internationalisation of our company,
    we changed the statutory name of our company to TNT N.V. On 7 April 2005,
    our annual general meeting of shareholders approved this change, and the name
    change came into effect on 11 April 2005. We intend to operate globally under
    the TNT brand for all our activities in the course of 2006. Operating under
    one brand increases the recognition of our group worldwide and allows for
    more efficient communication on the services we provide. In the Netherlands, we
    currently offer our postal services mainly under the brand TPG Post. We recently
    started changing this to TNT Post. Royal TPG Post B.V. will officially change
    its name to Royal TNT Post B.V. in the autumn of 2006. We have been granted
    the right to affix the designation Royal to our subsidiary TNT
    Post B.V. after the name change. We presently offer postal services in eight
    European countries, partly under the name TNT. Starting in 2006, all our international
    postal activities will be rebranded to TNT. The change of our name is being
    accompanied by a change of colour to orange for the remainder of the group. SEASONALITYOur domestic mail business is seasonal in that it is affected
    by public and local holiday patterns and especially by the distribution of
    Christmas greeting cards and presents during December. The express business is
    seasonal in that it is affected by public and local holiday patterns and adverse
    weather conditions.




Our freight management
    business shows a pattern whereby the second half of the financial year is
    consistently better than the first half, and in particular the last quarter
    (October through December) is the best quarter of the year. MARKET TRENDSWe believe that globalisation is one of the major trends driving
    the world economy. We believe that globalisation will continue, but it will
    affect our divisions in different ways. In the mail industry,
    operators are still organised on largely national lines. However, with European
    Mail Networks and other international ambitions, we seek to establish a leading
    international position in mail. Consolidation in this industry has not yet
    happened, however with the entry of private equity into the industry in 2005,
    future changes in the landscape are possible. 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. In the freight management
    industry, we have observed that the flow of goods continues to grow in all
    regions, including China and emerging markets. Thus, our strategy is to continue
    to expand our global network in all regions, particularly Asia. OUR COMMITMENT TO
    COMMUNITYGovernanceWe are committed to good corporate governance. We have embraced
    the spirit of corporate governance reform, which resulted in our ranking as
    the company with the best compliance with the Dutch corporate governance code
    according to the Dutch Investors Association (VEB) on 9 December 2005.
    We have procedures and policies covering whistleblowing, auditor independence
    and U.S. Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act) compliance, under
    the supervision of our audit committee. 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. See chapter 8. Corporate philanthropyWe 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 8. EnvironmentWe are committed to protecting the environment. This includes
    promoting the reduction of emissions through efficient


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|Chapter
      2 | Information on the
      company
|--------------- | --------------------------------

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route planning,
    the use of cleaner alternative fuels and the replacement of road vehicles
    and aircraft by cleaner versions. In 2005, we again increased the coverage
    of ISO 14001 certified environmental management systems and entered the Dow
    Jones Sustainability Index as leader of the industrial transportation industry.
    We report our progress in our annual corporate social responsibility report,
    which, although not part of this report, can be viewed on our website, group.tnt.com. ReputationWe seek to maintain transparency. This was recognised in 2004
    by TNT winning the prestigious Henri Sijthoff prize for




the best annual
    report in the Netherlands. We also won the award for the best corporate website,
    issued by the Dutch leading financial newspaper in 2004. Our 2004 annual report
    furthermore ranked 9th in the yearly global annual report ranking as prepared
    by e.com and was voted one of the best edited and designed Dutch annual reports
    by the Graphic Culture Foundation. According to webranking 2005, published
    by the Financial Times, the TNT website ranked as best corporate website in
    Europe in 2005. Furthermore, we ranked first in our sector for investor relations
    in the 2005 Thomson Extel pan-European survey.


|                                                           | As
        at and for the year ended at 31 December
|---------------------------------------------------------- | ---------------------------------------------------
|                                                           | 2005                                               
|                                                           | US$                                                
|                                                           |                                                    
|Segmental operating
      revenues 2                       |                                                    
|                                                           |                                                    
|Mail                                                       | 4,718                                              
|                                                           |                                                    
|Express                                                    | 6,317                                              
|                                                           |                                                    
|Freight management                                         | 934                                                
|                                                           |                                                    
|Non-allocated and inter-company                            | (2                                                 
|                                                           |                                                    
|Total operating
      revenues3                            | 11,967                                             
|                                                           |                                                    
|                                                           |                                                    
|                                                           |                                                    
|Depreciation, amortisation
      and impairments           | 379                                                
|                                                           |                                                    
|Total operating income                                     | 1,372                                              
|                                                           |                                                    
|as
      % of total operating revenues                     | 11.5                                               
|                                                           |                                                    
|Profit/(loss) from
      discontinued operations           | (131                                               
|                                                           |                                                    
|Profit attributable
      to the shareholders              | 780                                                
|                                                           |                                                    
|                                                           |                                                    
|                                                           |                                                    
|Capital expenditure
      on property, plant and equipment | 276                                                
|                                                           |                                                    

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

In 2004 we prepared our
    consolidated financial statements in accordance with Dutch GAAP. 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 TNT,
    there are no differences between the IFRS as adopted by the European Union
    and the IFRS as issued by the International Accounting Standards Board. As
    a result our 2005 consolidated financial statements have been prepared in
    accordance with IFRS and the comparative 2004 data has been adjusted. A detailed
    explanation of the transition to IFRS and the impact on our financial numbers
    is given in chapter 12.




Since we are a non-US
    company that is a first time adopter of IFRS, the SEC has permitted us to
    present one year of comparative data instead of the normally required two
    years of comparative data. In 2005, we had total
    operating revenues of €10,105 million. Our mail division accounted for
    39.4% of our group operating revenues and 67.0% of our group operating income.
    Our express division consists of two segments: express and freight management.
    The express business accounted for 52.8% of our group operating revenues and
    40.9% of our group operating income and the freight management business accounted
    for 7.8% of our group operating revenues and 0.9% of our group operating income.


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|Information
        on the company | Chapter
        2
|---------------------------------- | -----------------

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The information in the
    chapters 2, 3, 4, 5 and 11 should be read in combination with our consolidated
    financial statements which can be found in chapter 12. Key factors that affect
    our results of operations 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 days in a year,
      our
        ability to manage our capital expenditures and operating expenses, and
      our
        ability to match our operating expenses to shifting volume levels. Our mail and express
    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 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, 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 or 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.


|                                                       | Year
        ended at 31 December
|------------------------------------------------------ | ---------------------------------
|Consolidated group
      results                       | 2005                             
|                                                       | US$                              
|                                                       |                                  
|total operating revenues                               | 11,967                           
|                                                       |                                  
|Other income                                           | 45                               
|                                                       |                                  
|Total operating expenses                               | (10,640                          
|                                                       |                                  
|Total operating
      income                           | 1,372                            
|                                                       |                                  
|as
      % of total operating revenues                 | 11.5                             
|                                                       |                                  
|Net financial expense                                  | (7                               
|                                                       |                                  
|Income taxes                                           | (450                             
|                                                       |                                  
|Results from investments
      in associates           | (2                               
|                                                       |                                  
|Profit for the period
      from continuing operations | 913                              
|                                                       |                                  
|Profit/(loss) from
      discontinued operations       | (131                             
|                                                       |                                  
|Profit for the period                                  | 782                              
|                                                       |                                  
|Attributable to:                                       |                                  
|                                                       |                                  
|Minority interests                                     | 2                                
|                                                       |                                  
|Shareholders                                           | 780                              
|                                                       |                                  
|Earnings per ordinary
      share (in cents) 1         | 171.7                            
|                                                       |                                  
|Earnings
      per diluted ordinary share (in cents) 2 | 170.9                            
|                                                       |                                  

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

|                                        |        | Year
        ended at 31 December
|--------------------------------------- | ------ | ---------------------------------
|Operating
      revenues by segment     | 2005   | variance                         
|                                        |        | US$                              
|                                        |        |                                  
|Mail                                    | 4,718  |                                  
|                                        |        |                                  
|Express                                 | 6,317  |                                  
|                                        |        |                                  
|Freight
        management              | 934    |                                  
|                                        |        |                                  
|Non-allocated
        and inter-company | (2     | )                                
|                                        |        |                                  
|Total
      operating revenues          | 11,967 |                                  
|                                        |        |                                  

|1 | Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

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|2005
        Annual Report and Form 20-F |  | 21
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  to Contents



|Chapter
      2 | Information on the
      company
|--------------- | --------------------------------

---

|                              | Year
        ended at 31 December
|----------------------------- | ---------------------------------
|Other income by
      segment | 2005                             
|                              | US$                              
|                              |                                  
|Mail                          | 31                               
|                              |                                  
|Express                       |                                  
|                              |                                  
|Freight management            |                                  
|                              |                                  
|Non-allocated                 | 14                               
|                              |                                  
|Total other income            | 45                               
|                              |                                  

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

|                                  | Year
        ended at 31 December
|--------------------------------- | ---------------------------------
|Operating income
      by segment | 2005                             
|                                  | US$                              
|                                  |                                  
|Mail                              | 920                              
|                                  |                                  
|Express                           | 561                              
|                                  |                                  
|Freight management                | 13                               
|                                  |                                  
|Non-allocated                     | (122                             
|                                  |                                  
|Total operating
      income      | 1,372                            
|                                  |                                  

|1 | Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

GROUP OVERVIEWTotal operating revenues increased by 11.0% in 2005 compared
    to 2004. Operating income increased by 3.9%, mainly due to an increase in
    our express business. In our mail business,
    operating revenues increased by 2.4% 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 resulting from competition and substitution. Our mail business in
    the Netherlands is focused on service quality and margin to defend its market
    position. Operating income of our mail business decreased by 3.6%. 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. Our express business
    achieved 8.3% higher operating revenues compared to 2004, mainly due to continued
    growth in its international businesses. Express operating income increased
    by 26.4%, 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. The operating revenues
    and operating income of our freight management business for 2005 regard the
    full year and are therefore not comparable to 2004, which only includes the
    financial results realised after the date of the acquisition of




the freight management
    business in August 2004. Our freight management operating revenues grew in
    all regions. Growth in air and ocean volumes contributed positively to operating
    revenues. GROUP OPERATING REVENUESTotal operating revenues increased by €999 million (11.0%)
    to €10,105 million compared to 2004. Our mail business contributed an
    increase of €92 million, our express business €411 million and our
    freight management business €510 million, to this growth. Organic growth, defined
    as the growth calculated against 2004 foreign exchange rates and excluding
    the effect from the first time consolidation of acquisitions and the deconsolidation
    of disposals, was responsible for 4.7% of total group operating revenues growth,
    acquisitions accounted for 5.9%, and 0.4% was attributable to favourable changes
    in foreign exchange rates.


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|22 |  | 2005 Annual Report
      and Form 20-F
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|Information
        on the company | Chapter
        2
|---------------------------------- | -----------------

---

GROUP OPERATING EXPENSES

|                                                      | Year
        ended at 31 December
|----------------------------------------------------- | ---------------------------------
|Operating expenses                                    | 2005                             
|                                                      | US$                              
|                                                      |                                  
|Cost of materials                                     | 483                              
|                                                      |                                  
|Work contracted out
      and other external expenses | 4,970                            
|                                                      |                                  
|Salaries and social
      security contributions      | 4,042                            
|                                                      |                                  
|Depreciation, amortisation
      and impairments      | 379                              
|                                                      |                                  
|Other operating expenses                              | 766                              
|                                                      |                                  
|Total operating
      expenses                        | 10,640                           
|                                                      |                                  
|(in millions, except
      percentages)               |                                  

Total operating expenses
    increased by €986 million (12.3%) to €8,984 million compared to
    2004. Overall, the organic growth in operating expenses was 5.3%, the increase
    due to acquisitions effective in 2004 (including Wilson, Prime Vision B.V.,
    Seducom B.V. and our joint venture with Essent N.V., named Cendris BSC Customer
    Contact B.V.) and in 2005 (including Euro Mail B.V., Door-to-Door d.o.o.,
    Asinus d.o.o. and Rheinkurier GmbH) was 6.6%. Changes in foreign exchange
    rates had a positive effect of 0.4%. Our gross margin, defined as total operating
    income as a percentage of total operating revenues, decreased from 12.3% in
    2004 to 11.5% in 2005. Total cost of materials
    increased by €66 million (19.3%) compared to 2004. Organically, cost
    of materials increased by €65 million (19.0%), mainly due to higher fuel
    costs in our express division. Acquisitions effective in 2004 and 2005 contributed
    €1 million (0.3%) to the increase. 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 €639 million (18.0%) compared to 2004. Acquisitions effective
    in 2004 and 2005 contributed €409 million (11.5%) to the increase. The
    organic increase of €209 million (5.9%) was mainly related to growth
    of European Mail Networks in our mail business and higher linehaul, pick-up,
    and delivery costs in our express business. Changes in foreign exchange rates
    contributed €21 million (0.6%) to the increase. Salaries and social security
    contributions increased by €165 million (5.1%) compared to 2004. Acquisitions
    effective in 2004 and 2005 contributed €67 million (2.1%) to the increase.
    Salaries and social security contributions increased organically by €88
    million (2.7%), mainly due to higher pension costs. Furthermore, during 2004
    there was a positive effect from the settlement for future wage guarantees
    which resulted in €134 million refund from an insurance company. In addition,
    the increase was caused by a 5% increase in average full-time employee equivalents
    (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. Changes
    in foreign exchange rates added €10 million (0.3%) to these cost increases. Depreciation, amortisation
    and impairments increased by €17 million (5.6%) compared to 2004. Acquisitions
    effective in 2004 and 2005 increased these costs by €19 million (6.3%)
    and changes in foreign exchange rates contributed €1 million (0.3%) to
    the increase. The cost increases were offset by an organic decrease of €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 increased
    by €99 million (18.1%) compared to 2004. Acquisitions effective in 2004
    and 2005 contributed €33 million (6.0%) to the increase. Other operating
    expenses increased organically by €65 million (11.9%), mainly due to
    increased consultants costs, and costs in connection with our ongoing tax
    investigations. Changes in foreign exchange rates added €1 million (0.2%)
    to the cost increase. GROUP OPERATING INCOMETotal operating income for the group was €1,159 million,
    an increase of 3.9% compared to 2004. Our mail business operating income decreased
    by 3.6% to €777 million and is further described in chapter 3. Our express
    business contributed €474 million to the total operating income, which
    is an increase of 26.4%. Operating income of our freight management segment
    was €11 million. Our express and freight management businesses are further
    described in chapter 4. 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


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|2005
        Annual Report and Form 20-F |  | 23
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|Chapter
      2 | Information on the
      company
|--------------- | --------------------------------

---

(building alliances with
    other organisations and postal operators, the TNT-1 project, rebranding costs
    of non-TNT branded organisations into the TNT brand and a cost efficiency
    project for lean warehousing). Costs made to support the United Nations World
    Food Programme (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). Acquisitions effective
    in 2004 and 2005 had a positive effect of €9 million (0.8%) on our operating
    income in 2005. Foreign currency movements during the year had a positive
    effect of €5 million (0.4%) on our operating income.


GROUP FINANCIAL INCOME
  AND EXPENSES

|                                        |      |          |      |      | Year
        ended at 31 December
|--------------------------------------- | ---- | -------- | ---- | ---- | ---------------------------------
|Net financial (expense)/income          | 2005 | variance |      | 2004 |                                  
|                                        | US$  |          | €    |      | %                                
|                                        |      |          |      |      |                                  
|Interest and similar
      income       | 136  |          | 115  |      | 16.2                             
|                                        |      |          |      |      |                                  
|Interest and similar
      expenses     | (143 | )        | (121 | )    | (3.4                             
|                                        |      |          |      |      |                                  
|Net financial expense                   | (7   | )        | (6   | )    | 66.7                             
|                                        |      |          |      |      |                                  
|(in millions, except
      percentages) |      |          |      |      |                                  

Interest and similar
    income: 115 million (2004: 99)
    Interest and similar income in 2005 of €115 million (2004: 99) mainly
    relates to interest income on funding our discontinued logistics business
    of €72 million (2004: 66) 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 unwind of a US dollars 435 million swap.




Interest and similar
    expenses: 121 million (2004: 117)
    In 2005 interest and similar expense of €121 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).


GROUP INCOME TAXES

|                                        |      |          |     |      | Year
        ended at 31 December
|--------------------------------------- | ---- | -------- | --- | ---- | ---------------------------------
|Income taxes                            | 2005 | variance |     | 2004 |                                  
|                                        | US$  |          | €   |      | %                                
|                                        |      |          |     |      |                                  
|Current tax expense                     | 401  |          | 338 |      | (2.0                             
|                                        |      |          |     |      |                                  
|Changes in deferred
      taxes         | 49   |          | 41  |      | 36.7                             
|                                        |      |          |     |      |                                  
|Total income taxes                      | 450  |          | 379 |      | 1.1                              
|                                        |      |          |     |      |                                  
|(in millions, except
      percentages) |      |          |     |      |                                  

Group income taxes amounted
    to €379 million, an increase of 1.1% compared to 2004. Our effective
    tax rate for 2005 was 32.9% compared to 34.2% 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
    €662 million (2004: 627). With these losses carried forward, future tax
    benefits of €211 million (2004: 202) 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
    in the foreseeable future. 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 legislative changes.
    As a result we have not recognised €140 million (2004: 123) of the potential
    future tax benefits and have recorded net deferred tax assets of €71
    million at the end of 2005 (2004: 79).


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|24 |  | 2005 Annual Report
      and Form 20-F
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|Information
        on the company | Chapter
        2
|---------------------------------- | -----------------

---

DISCONTINUED OPERATIONSIn 2005, the loss from
    discontinued operations was €111 million. Included in this was the pre-tax
    result of the sale transaction of the French logistics activities amounting
    to €102 million. Losses relating to our operations in France, including
    restructuring expenses, amounted to €52 million. The operating income
    for the remainder of our discontinued logistics business amounted to €136
    million, offset by €63 million of net financial expense and €30
    million of income tax expense. The discontinued operations are further described
    in chapter 5. GROUP NET INCOMEIn 2005, profit for the
    period attributable to shareholders 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 €142 million and €4
    million higher income taxes. The decrease in profit for the period was partly
    offset by an increase in operating income of €43 million, mainly driven
    by our express business, and a reduction of net financial expenses of €12
    million.






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|2005
        Annual Report and Form 20-F |  | 25
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|26 |  | 2005 Annual Report
      and Form 20-F
|-- |  | --------------------------------------

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| | Chapter
        3
| | -----------------





THE MAIL



DIVISION



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|2005
        Annual Report and Form 20-F |  | 27
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|Chapter
      3 | The mail division
|--------------- | -----------------

---

MAIL DIVISION DESCRIPTION GENERALOur 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 anticipate and respond to our changing
    market. 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 business in
    the Netherlands is highly regulated. See chapter 13 for more detail. The Dutch
    Postal Act requires us to provide the mandatory postal services in the Netherlands
    and grants us the exclusive right to provide some of these services (referred
    to as reserved postal services). Mandatory postal services are subject to
    price regulation. In the Netherlands our traditional mail services are declining
    in volume due to the saturation of the Dutch domestic mail market, growing
    competition and the substitution by customers of other methods of delivering
    information. In other countries we may be able to grow our mail services,
    although substitution is a relevant factor that negatively influences the
    total size of all domestic mail markets. At the moment our potential growth
    in other countries is also negatively affected by various barriers, including
    regulatory, to entry. Due to our strong position
    in the Dutch market, 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. 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 STRATEGYOur ambition is to become the leading provider of business
    and consumer 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 Mail
        Netherlands, focus is 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 will enable us
        to retain our current margins. 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. 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 through cooperation
        with other organisations and postal operators. These
        two key elements are supported by the following activities:
      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,
      our
        national and international parcel activities in the Netherlands and in
        Belgium 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.In
        2005 it became clear that our conditional offer for a minority stake in
        the incumbent national postal operator of Denmark was not accepted. In
        2005 we investigated the feasibility of a similar offer to acquire a minority
        stake in the national postal operator of Belgium, but we decided not to
        make an offer.As
        part of our cooperation with China Post we advised on the optimisation
        of the China Post transport, sorting and delivery operational structure.
        We have started to collect data in Shanghai and have built a direct mail
        company to capitalise on what we expect will be the strong development
        of the Chinese direct mail market.In
        2005, our mail business earned revenues of €3,984 million, a 2.4%
        increase compared to 2004. Mail accounted for 39.4% of our group operating
        revenues and 67.0% of our group operating income.


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|28 |  | 2005 Annual Report
      and Form 20-F
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|The
        mail division | Chapter
        3
|------------------------- | -----------------

---

The following table sets
    forth operating revenues for each of the four business lines of our mail business,
    for the past two years:


|                                                                                                                                                                                           |       |  | Year
        ended at 31 December |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- |  | --------------------------------- | ----
|Mail operating revenues
      and other income                                                                                                                                             | 2005  |  |                                   | 2004
|                                                                                                                                                                                           | US$   |  | €                                 |     
|                                                                                                                                                                                           |       |  |                                   |     
|Mail Netherlands                                                                                                                                                                           | 3,135 |  | 2,647                             |     
|                                                                                                                                                                                           |       |  |                                   |     
|Cross-border Mail                                                                                                                                                                          | 610   |  | 515                               |     
|                                                                                                                                                                                           |       |  |                                   |     
|European Mail Networks
      1                                                                                                                                                             | 707   |  | 597                               |     
|                                                                                                                                                                                           |       |  |                                   |     
|Data and Document Management
      1                                                                                                                                                       | 266   |  | 225                               |     
|                                                                                                                                                                                           |       |  |                                   |     
|Total operating
      revenues                                                                                                                                                             | 4,718 |  | 3,984                             |     
|                                                                                                                                                                                           |       |  |                                   |     
|as
      % of total operating revenues TNT                                                                                                                                                 |       |  | 39.4                              |     
|                                                                                                                                                                                           |       |  |                                   |     
|Other income                                                                                                                                                                               | 31    |  | 26                                |     
|                                                                                                                                                                                           |       |  |                                   |     
|(in millions, except
      percentages)                                                                                                                                                    |       |  |                                   |     
|1 Figures
      for 2004 have been adjusted to reflect the impact of the transfer of Dimar
      Sro from Data and Document Management to European Mail Networks per I January
      2005. |      

MAIL DIVISION OVERVIEWMail NetherlandsOur Mail Netherlands business line collects, sorts, transports
    and delivers postal items, including letters, direct mail, printed matter
    and parcels within the Netherlands. Mandatory postal services
    provided in the Netherlands form part of Mail Netherlands. Our subsidiary
    Royal TPG Post B.V. (TPG Post) performs these mandatory postal services. 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. See chapter 13 for more information. The provision of certain
    mandatory postal services is reserved exclusively to us. These domestic reserved
    postal services include the conveyance of letters weighing up to 50 grammes
    (100 grammes prior to 1 January 2006) within the Netherlands, the placing
    of letter boxes alongside or on public roads and the issuance of postal stamps
    bearing the likeness of the monarch and/or the word Nederland.
    The exclusive right does not extend to the conveyance of letters by a business
    to its customers. Although presently not a widespread practice, large businesses
    may establish their own alternative distribution systems. This could adversely
    affect our mail divisions revenue. Certain services are
    not included in the mandatory services and we are not required to provide
    these, 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.




As of 1 January 2006
    the weight limit of 100 grammes was reduced to 50 grammes both for reserved
    postal services and for the mandatory postal services for bulk mail. We believe
    the impact will not be significant to us. The full liberalisation
    of the Dutch market will take place under certain conditions, mainly dependent
    on developments in the United Kingdom and Germany, see chapter 13. Full liberalisation
    is not expected before April 2007. 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. In 2005, approximately
    28.2% of our mail operating revenue and approximately 11.1% of the groups
    operating revenues (2004: 28.3% and 12.2%) 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 mindful of this practice, but
    the effect on volumes is immaterial. In 2005, through our
    Mail Netherlands business line, we delivered on average approximately 17 million
    addressed postal items per day, six days a week, to approximately 7.6 million
    households and businesses, and collected, sorted and delivered approximately
    5.1 billion addressed items of mail (excluding inbound international items). The actual volume decline
    was 3.1% in 2005 compared to 2004. The underlying decline of volumes adjusted
    for a comparable number of working days per year was 2.0%. There has been
    an average annual decline of 1.8% since 2000.


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|2005
        Annual Report and Form 20-F |  | 29
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|Chapter
      3 | The mail division
|--------------- | -----------------

---

The decline was due in part to substitution of electronic media (see chapter
        10), 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.Except
        for those services falling within reserved postal services, we face competition
        in the market in all areas of our mail division. Depending on the type
        of service, this competition arises from three primary sources:
      dedicated
        companies specialising in a particular type of postal service,
      specialised
        distribution units of large Dutch companies, and
      local
        or regional companies providing a range of postal services in a given
        geographic area.In
        the Netherlands our two main competitors, Sandd B.V. and Selekt Mail Nederland
        (the latter is owned by Deutsche Post World Net and Dutch publisher Koninklijke
        Wegener N.V.), in the addressed mail market 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 450
        million addressed postal items together in 2005, which was around 8% of
        the total volume of the 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 the post as a communication
        medium and our ability to reduce the total chain costs for our customers.Due
        to the efficiency of our operations and customer orientation, we do not
        believe liberalisation in the Netherlands will significantly undermine
        our position in our traditional home market. However, adjusting to reduced
        mail volumes will require a continuous and perhaps increased effort to
        realise cost flexibility.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 business 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.Our
        domestic mail system is presently organised around 11 main sorting centres.
        Six of these sorting centres 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. 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 4,160 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 approximately 484 mail
    distribution depots. At the depots, the mail is arranged according to street
    and house number and door-to-door delivery is then effected by one of our
    approximately 43,475 deliverers. In the last few years
    we have replaced manually arranging the mail according to street and house
    number with sorting machines (sequence sorting machines) for small
    letter mail items, in accordance with our cost flexibility programme. The
    project started in 2003. The last of the 286 sequence sorting machines was
    rolled out in October 2005, and the project was finished in November 2005,
    as planned. 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 nearly 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. We believe that better targeted direct
    mailings, which have a more limited circulation, may impede future growth
    in direct mail volumes. We 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 post 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


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|30 |  | 2005 Annual Report
      and Form 20-F
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|The
        mail division | Chapter
        3
|------------------------- | -----------------

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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
        to achieve annualised cost savings by 2012 of approximately €370
        million. In 2005, we achieved aggregate cost savings of €234 million,
        which was €89 million more than we realised in 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.The
        restructuring of the marketing and sales channels includes the optimisation
        of call centres, the retail network (post offices and service points)
        and the marketing and sales organisation. The restructuring of our overhead
        includes the optimisation of staff and support functions. We expect that
        we will be able to make these changes while maintaining our service and
        quality levels. The restructuring of operations includes:
      the
        introduction of mechanically automated sequence sorting of small mail
        letter items,
      the
        implementation of a differentiated collective labour agreement for mail
        deliverers and other postal employees,
      the
        realisation of further optimised sorting processes,
      a restructuring
        of the mail depot structure,
      the
        separation of parcels from other mail delivery activities, and
      a restructuring
        of operational management structure, back office and support functions.This
        redesign of our mail production chain has a particular emphasis on refining
        our distribution activities and distribution points throughout the Netherlands,
        such as the installation of the sequence sorting machines.In
        2003, we also introduced the position of mail deliverer: part-time mail
        deliverer positions that provide the same quality for customers at lower
        cost and with greater flexibility for the individual and the company.
        The new mail deliverer positions are particularly attractive to individuals
        who want to work limited hours but still have the security of a permanent
        position and pension. At the end of 2005, a total of approximately 7,100
        new employees have joined TPG Post as part-time deliverers, and the number
        continues to grow. Through natural attrition, up to a total of 9,000 full-time
        equivalent mailman positions is expected to be replaced by part-time mail
        deliverer positions by the year 2012. By then an additional 5,000 mailman
        positions will become redundant. We believe that the cost flexibility
        programme will help us maintain the high quality of service our customers
        have come to expect, while also maintaining our margins. In 2004 a plan
        (as part of our existing master plans) was announced to redesign the management
        structure of the operational activities of our collection, sorting, transport
        and distribution. This new structure became effective on 1 January 2006.




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. 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 2005, the
    joint venture operated about 285 self owned outlets and about 515 franchise
    outlets, both offering a full assortment of postal products. Further, Postkantoren
    B.V. operated over 102 TPG Post Service Points with a full assortment of postal
    products and about 1,200 TPG Post Service Points, which offer the most important
    postal products. 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. We use the post
    offices as an outlet for the collection of letters and parcels, the sale of
    stamps, the delivery of letters and parcels in the event that home delivery
    is not successful and express post. On behalf of Postbank N.V., Postkantoren
    B.V.s self owned and franchise outlets offer counter banking and insurance. In addition, TPG Post
    itself operates a network of about 230 TPG Post Business Points, which provide
    postal services to small and medium enterprises. For the benefit of consumers
    TPG Post uses more than 1,000 retailers as stamp resellers, which means that
    we offered the Dutch market a total of more than 3,330 distribution points
    in 2005. Mail Netherlands also
    engages in activities related to philately and 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. Some of the innovative services that are offered in
    Mail Netherlands include de Digitale Brievenbus (digital letterbox),
    a completely digital mail service for large mailers. We launched de
    Digitale Brievenbus in cooperation with the major Dutch retail banks
    in January 2006. Mail Netherlands also offers digital secure and hybrid mail
    services. For various reasons (wrong
    address, addressee moved, etc.), sometimes mail items distributed by our competitors
    have to be returned to the sender. In most cases these mail items are found
    in our post boxes, but still have to be returned by us even though we did
    not receive the postage paid at collection. After an intensive testing period
    we entered into an agreement with our most important competitors, Sandd B.V.
    and Selekt Mail Nederland in November 2005, on the


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        Annual Report and Form 20-F |  | 31
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      3 | The mail division
|--------------- | -----------------

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terms and conditions
    under which these mail items, although distributed by competitors, are returned
    to their senders. Other competitors can conclude an agreement with us on the
    same terms and conditions. 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 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. The 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 did not enter into the REIMS II agreement because
    we felt it did not contain a strong incentive/penalty system that would guarantee
    improvement of the quality of service. Instead, we concluded commercially
    oriented bilateral agreements with most of the European postal operators.




Most of the 10 countries
    who 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 TPG 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. 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. The only true global competitor is Deutsche
    Post, trading as DHL Global Mail, against which Spring competes through a
    consultative and solutions based approach to mail. 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 the following
    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. Additionally, the increase in regulation
    governing the use of Extraterritorial Offices of


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|32 |  | 2005 Annual Report
      and Form 20-F
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|The
        mail division | Chapter
        3
|------------------------- | -----------------

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Exchange and the impact
    of REIMS agreements continues to limit the ability of Spring and other postal
    operators (not being incumbents) to compete on an equal basis. Despite these
    obstacles, Spring has continued to hold its market position and to generate
    a positive return. 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. In 2005 the main focus
    was on expanding addressed activities in the key markets of Germany and the
    United Kingdom. In Germany, one of the
    key mail markets in Europe, we expanded our regional distribution networks
    to strengthen our position in nationwide addressed delivery. We will not build
    a nationwide network, but we will focus on high density areas, either through
    greenfield operations under the brand name TNT Post Regioservice (Hamburg,
    Düsseldorf and Frankfurt) or via acquisitions (assets of Rheinkurier
    GmbH, Köln). The aim is to be active in all key areas in Germany with
    our own regional distribution. With this we can secure the nationwide product
    offering of our 71% subsidiary EP Europost AG & CO KG., which, successfully
    gained new customers and more than doubled revenues in 2005. The geographical
    coverage for the distribution of letter mail is close to 90% of Germany. This
    has been achieved by EP Europost through partnerships with regional distribution
    companies, of which TNT Post Regioservice is one. Being the second largest
    mail market in Europe, the United Kingdom is 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 highly successful in 2005, 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 intend to start pilots for that in pre-selected
    areas. The cooperation with the Express Dairies milkmen in the United Kingdom
    was terminated in the fourth quarter due to lower than expected coverage of
    this particular network. When entering in the UK mail market the brand name
    TNT gave us a first mover advantage by reducing the time to market significantly. In unaddressed delivery
    we strengthened our position in 2005 in all markets, 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 fierce pressure on prices due to heavy competition (mostly
    by companies owned




by other postal operators
    who use their dominant position and want to get into this market). Our goal
    is to retain our market share by retaining the customers and volumes. We invest
    in quality of services to differentiate ourselves from those competing on
    price. We completed some small acquisitions in Germany, where we acquired
    the assets of Peter Robl GmbH (Robl) and Reklam und Zeitungsvertrieb GmbH
    (Szunyog) and 100% of the shares of DWM Direktwerbung und Marketing GmbH (Reischl),
    an unaddressed mail company in Munich. These acquisitions further strengthened
    our position in the German unaddressed mail market. In Italy, we were successful
    in growing our mail related business and we bought the remaining 20% in Cerilly,
    a letter shop with printing and fulfilment operations. Data and Document
    ManagementThe services provided by our Data and Document Management business
    line cover two main areas: direct marketing and document handling. In direct
    marketing, we offer direct and interactive marketing solutions such as data
    capture, database management, data mining and target systems for distribution.
    Our document handling services include distributed printing, mailroom management
    and workflow efficiency services. After branding our Data
    and Document Management business line in 2003 as Cendris, we started
    in 2004 to restructure the different parts of Cendris into one company. The
    execution of these plans was finalised by the end of 2005. The goal of this
    restructuring was to enable Cendris to improve its market position in the
    data and document market and to optimise its internal processes. In July 2005, Cendris
    acquired the Dutch print and mailing house Euro Mail B.V. Euro Mail specialises
    in mailing activities (enveloping, addressing, sorting and distribution),
    print services, fulfilment and other direct mail activities. Euro Mail primarily
    serves small, locally operating businesses from 10 locations in the Netherlands.
    The specific knowledge and experience of Euro Mail in the small and medium
    enterprises segment adds to the capabilities of Cendris and TPG Post. The
    acquisition placed TPG Post and Cendris in a better position to develop and
    sell new product-market combinations for the small and medium enterprises
    segment. The market for data and
    document management services continues to show price pressure and strong competition
    in all segments of the business portfolio (data, print, mailroom, scanning
    and call centres). The main objectives of management are focus on cost reduction
    and new business. In August 2005, we sold
    our interest in The Postal Preference Service Limited, which was established
    in 2000 by Royal Mail, TPG Post and other minority shareholders to provide
    direct marketing services in the United Kingdom.


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        Annual Report and Form 20-F |  | 33
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      3 | The mail division
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MARKET TRENDSIn the European postal markets a volume decline is clearly
    noticeable, due to the increasing importance of the digital world around us,
    and reflects a strong underlying trend. 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. 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 universal service. We expect
    an intense discussion both at national and European levels on how the content
    of the universal service is to be shaped in the future. The VAT 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. 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 the
    unique presence of two competitors that each have full nationwide coverage
    for end-to-end mail delivery with a growing market share. Most European postal
    operators were turned into corporations over the past ten years. Many governments
    are now considering privatisation of their national postal operator. In the
    process of privatisation we notice an active interest by private equity houses
    in addition to industry players such as TNT. 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.


|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- | -------- | ----- | ---- | --------------------------------- |  | ----- | 
|MAIL FINANCIAL REVIEW                                                                                                                                                                      |       |          |       |      |                                   |  |       | 
|                                                                                                                                                                                           |       |          |       |      | Year
        ended at 31 December | 
|Mail operating revenues
      and other income                                                                                                                                             | 2005  | variance |       | 2004 |                                  
|                                                                                                                                                                                           | US$   |          | €     |      | %                                 |  | €     | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|Mail Netherlands                                                                                                                                                                           | 3,135 |          | 2,647 |      | (0.2)                             |  | 2,652 | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|Cross-border Mail                                                                                                                                                                          | 610   |          | 515   |      | (6.5)                             |  | 551   | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|European Mail Networks
      1                                                                                                                                                             | 707   |          | 597   |      | 23.3                              |  | 484   | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|Data and Document Management
      1                                                                                                                                                       | 266   |          | 225   |      | 9.8                               |  | 205   | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|Total operating
      revenues                                                                                                                                                             | 4,718 |          | 3,984 |      | 2.4                               |  | 3,892 | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|as
      % of total operating revenues TNT                                                                                                                                                 |       |          | 39.4  |      |                                   |  | 42.7  | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|Other income                                                                                                                                                                               | 31    |          | 26    |      | 225.0                             |  | 8     | 
|                                                                                                                                                                                           |       |          |       |      |                                   |  |       | 
|(in millions, except
      percentages)                                                                                                                                                    |       |          |       |      |                                   |  |       | 
|1 Figures
      for 2004 have been adjusted to reflect the impact of the transfer of Dimar
      Sro from Data and Document Management to European Mail Networks per 1 January
      2005.

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|34 |  | 2005 Annual Report
      and Form 20-F
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|The
        mail division | Chapter
        3
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|                                                      |       |          |       |      |                                   | 
|----------------------------------------------------- | ----- | -------- | ----- | ---- | --------------------------------- | 
|                                                      |       |          |       |      |                                   | 
|                                                      |       |          |       |      | Year
        ended at 31 December | 
|Mail operating expenses                               | 2005  | variance |       | 2004 |                                  
|                                                      | US$   |          | €     |      | %                                 | 
|                                                      |       |          |       |      |                                   | 
|Cost of materials                                     | 218   |          | 184   |      |                                   | 
|                                                      |       |          |       |      |                                   | 
|Work contracted out
      and other external expenses | 1,227 |          | 1,036 |      | 9.9                               | 
|                                                      |       |          |       |      |                                   | 
|Salaries and social
      security contributions      | 1,916 |          | 1,618 |      | 2.7                               | 
|                                                      |       |          |       |      |                                   | 
|Depreciation, amortisation
      and impairments      | 152   |          | 128   |      | (1.5)                             | 
|                                                      |       |          |       |      |                                   | 
|Other operating expenses                              | 316   |          | 267   |      | 2.3                               | 
|                                                      |       |          |       |      |                                   | 
|Total operating
      expenses                        | 3,829 |          | 3,233 |      | 4.5                               | 
|                                                      |       |          |       |      |                                   | 
|(in millions, except
      percentages)               |       |          |       |      |                                   | 

|                                        |      |          |       |      |                                   |   |       | 
|--------------------------------------- | ---- | -------- | ----- | ---- | --------------------------------- | - | ----- | 
|                                        |      |          |       |      | Year
        ended at 31 December |  
|Mail operating income                   | 2005 | variance |       | 2004 |                                  
|                                        | US$  |          | €     |      | %                                 |   | €     | 
|                                        |      |          |       |      |                                   |   |       | 
|Operating income                        | 920  |          | 777   |      | (3.6                              | ) | 806   | 
|                                        |      |          |       |      |                                   |   |       | 
|as
      % of mail operating revenues   |      |          | 19.5% |      |                                   |   | 20.7% | 
|                                        |      |          |       |      |                                   |   |       | 
|(in millions, except
      percentages) |      |          |       |      |                                   |   |       | 



|Mail productivity
      statistics                                       |                                                                                           |     |        |      | Year
        ended at 31 December |     
|------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------- | --- | ------ | ---- | --------------------------------- | ----
|                                                                         |                                                                                           |     | 2005   | 2004 |                                   | 2003
|                                                                         |                                                                                           |     |        |      |                                   |     
|Addressed
        postal items delivered by Mail Netherlands 1(millions) | 5,139                                                                                     |     | 5,302  |      | 5,384                             |     
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | per
        Netherlands delivery address (items)                                          | 679 |        | 707  |                                   | 724 
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | per
        Mail Netherlands FTE 2(thousands of items)                                    | 152 |        | 161  |                                   | 156 
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | per
        Netherlands inhabitant (items)                                                | 315 |        | 325  |                                   | 331 
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | per
        delivery day (millions)                                                       | 17  |        | 17   |                                   | 18  
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | total
        operating revenues per FTE 2(thousands of €)                                | 94  |        | 95   |                                   | 89  
|                                                                         |                                                                                           |     |        |      |                                   |     
|                                                                         | average
      percentage of national mail sorted automatically (%)                        | 84  |        | 82   |                                   | 82  
|                                                                         |                                                                                           |     |        |      |                                   |     
|Postal
        volumes by cross-border (thousands of kilogrammes)        | 81,334                                                                                    |     | 90,239 |      | 94,467                            |     
|                                                                         |                                                                                           |     |        |      |                                   |     
|Addressed
        postal items delivered by EMN (millions)               | 490                                                                                       |     | 259    |      |                                   |     
|                                                                         |                                                                                           |     |        |      |                                   |     
|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 2.4% in 2005. In Mail Netherlands addressed
    mail volumes decreased by 3.1%, and revenues declined by 0.2%. On a comparable
    number of working days basis, the addressed Mail Netherlands volume decline
    was 2.0%. Revenues in our cross-border line of business declined 6.5%. Revenues
    in European Mail Networks showed a 23.3% growth. Data and Document Management
    revenues increased by 9.8%. 2005 showed a slight
    improvement in the economic environment in the Netherlands. Customers continued
    their search for cost savings in the distribution area. 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 margin to defend its market position. At the European level we expanded
    in the addressed mail segment through our start-ups in the United Kingdom
    and Germany.




Operating income decreased
    by 3.6% in 2005. This decrease was mainly due to a structural cost increase
    in salaries including social and pension contributions in Mail Netherlands,
    partly offset by continued progress in improving productivity and cost control
    in Mail Netherlands and expansion of our European Mail Networks. MAIL OPERATING REVENUESIn 2005, operating revenues from our mail business increased
    by €92 million (2.4%) compared to 2004. Organic operating revenues increased
    by €71 million (1.8%). 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%).


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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, 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 renewedsales
    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. 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, 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 €20 million
    (9.8%).




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 EXPENSESOur operating expenses increased by €139 million (4.5%)
    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 full-time employee equivalents from 44,483 in 2004
    to 42,482 in 2005) in connection with our cost flexibility programme. MAIL OPERATING INCOMEThe mail business operating income in 2005 decreased by €29
    million (-3.6%) compared to 2004, mainly caused by Mail Netherlands. The €29
    million decline however, was affected by a net positive one-off effect of
    €9 million in 2004, as described above, and €10 million restructuring
    costs in 2005. Adjusted for these one-off effects, operating income decreased
    €10 million organically. 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 19.5% compared to 20.7% in 2004.


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|Chapter
      4 | 
|--------------- | 





THE EXPRESS



DIVISION



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EXPRESS DIVISION DESCRIPTION GENERALOur express division consists of two business segments: express
    and freight management. Our express business
    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, primarily 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 our comprehensive range of products to all customers,
    which 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. Our express
    business includes our innight business. Our innight business provides innight
    distribution services in most




of Europe. Deliveries
    can be picked-up late in the afternoon or early in the evening for delivery
    during the same night. Our freight management
    business provides air and sea freight transportation by acquiring cargo space
    from airline and shipping firms. We offer a range of time-definite products
    from priority to economy air freight to mixed goods and full container sea
    freight. Our freight management operations consolidate cargo from a number
    of customers which allows us to secure favourable rates from airlines and
    shipping companies, while at the same time matching the customer cargo with
    the shipping routes that yield the lowest price while meeting delivery deadlines.
    A range of technology allows our customers to book shipments, monitor goods
    in-transit and exchange information related to shipments. In 2005, our express
    division earned revenues of €6,109 million. The express division accounted
    for 60.6% of our group operating revenues and 41.8% of our group operating
    income. The following table sets
    forth operating revenues for the express and freight management businesses
    in our express division for the past two years:


|                                                                                                                                                                 |       |     |       | Year
        ended at 31 December
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | --- | ----- | ---------------------------------
|Express
      division operating revenues                                                                                                                        | 2005  |     | 2004  | 1                                
|                                                                                                                                                                 |       | US$ |       | €                                
|                                                                                                                                                                 |       |     |       |                                  
|Express                                                                                                                                                          | 6,317 |     | 5,334 |                                  
|                                                                                                                                                                 |       |     |       |                                  
|Freight management                                                                                                                                               | 934   |     | 789   |                                  
|                                                                                                                                                                 |       |     |       |                                  
|Inter-segmental
      revenues                                                                                                                                   | (17   | )   | (14   | )                                
|                                                                                                                                                                 |       |     |       |                                  
|Total
      operating revenues                                                                                                                                   | 7,234 |     | 6,109 |                                  
|                                                                                                                                                                 |       |     |       |                                  
|as   as
      % of total operating revenues TNT                                                                                                                  |       |     | 60.6  |                                  
|                                                                                                                                                                 |       |     |       |                                  
|(in millions,
      except percentages)                                                                                                                          |       |     |       |                                  
|1    Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.

EXPRESS
        BUSINESS STRATEGY
        Our ambition is to be the leader in day- and time-certain, door-to-door
        transport for our business-to-business customers and to have 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
        uplift capacity from China to fuel our European network and establish
        an intra-China network,
      be number
        one in the Rest of the World emerging markets, 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, storage and distribution,
        and outsourced services.




To
          achieve this, our objectives are to:
      achieve
        profitable revenue growth through volume acquisitions at optimised pricing,
      maintain
        a balanced customer portfolio (large, medium, small and adhoc customers),
      focus
        on product performance,
      improve
        cost effectiveness,
      ensure
        quality in all key areas,
      connect
        strong domestic businesses to provide high-quality and cost-effective
        intra-European services,
      secure
        outstanding levels of customer satisfaction,
      develop
        leading-edge support technologies that provide added-value for customers,
      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
      recruit,
        develop and manage our employees towards the highest standard of customer
        care.


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EXPRESS BUSINESS OVERVIEWIn 2005, despite mixed worldwide economic conditions, including
    particularly weak economies in our key domestic European markets, our express
    business produced a strong performance driven by our international businesses,
    offering the right products, disciplined pricing management and an efficient
    sales process. The primary factors behind
    our express business profit improvements in 2005 were strong international
    volumes supported by a more balanced customer portfolio, growth in our global
    accounts, continued positive revenue quality yield, improved network optimisation
    and careful cost management. Revenue quality yield is one of our key measures
    and it is calculated as (1) the average of the percentage change in revenue
    per consignment compared to the previous year and (2) the percentage change
    in revenue per kilogramme compared to the previous year. Our employees furthered
    our mission through strict adherence to our commercial policy, a focus on
    serving business-to-business customers and consistent expresswide deployment
    of our uniform best practice processes. 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 most of the major business units including in the Benelux, France,
    Italy and the United Kingdom, which represent 64% of our express business
    revenue. In 2005 we continued
    to exploit the comprehensive range of cross-functional data available in our
    datawarehouse to provide consistent and timely management reporting and analysis
    of our key performance indicators. This has enabled in-depth measurement and
    analysis of our operational service performance and sales activities, which
    facilitates continuous improvement and adoption of best practice in our business. One of our objectives
    in 2005 was to maintain high quality technology for use by our customers.
    Our most recent regular customer survey demonstrated a high degree of satisfaction
    with the technology and functionality of the solutions provided, with customers
    stating that their key reasons for this satisfaction were ease of use, speed
    of use and simplification of business activity. We also gained consistently
    high scores for customer technology in our regular customer loyalty surveys. In 2005 we undertook
    a number of benchmarks of our technology effectiveness and efficiency. In
    all cases these showed excellent results, indicating that we remained effective
    in all aspects of information and communication systems.




Further demonstration
    of this was our IT organisations (Express ICS) winning the European
    Quality Award of the European Foundation for Quality Management in 2005. In January 2006, we completed
    the acquisition of TG+, which is the third largest industrial parcel operator
    in Spain, and which has revenues of around €100 million. In total this
    network employs approximately 2,600 people (about 960 directly employed by
    TG+) and operates 57 depots (22 directly owned by TG+) throughout the country,
    which add up to approximately 135,000 square meters, with more than 900 pick-up
    and deliveries drivers, and a fleet of 140 linehaul trucks connecting the
    depot network. We believe that TG+ will
    expand and strengthen our domestic express business and fuel our international
    express business in Spain, a strategic and fifth largest market in Europe
    with high growth potential. At the same time, we believe TG+ will further
    drive growth of our leading position in the premium express delivery market
    in Europe by providing better coverage in Spain. We are actively looking
    into further business opportunities and potential acquisitions to expand our
    express operations in Europe and Asia. As announced on 6 December 2005, we
    are in advanced negotiations for the acquisition of Hoau, Chinas leading
    domestic freight and parcel operator. Express EuropeThe Express Europe business provides regional, national and
    pan-European express services as well as time-sensitive door-to-door products
    that deliver consignments between Europe and the rest of the world. Our extensive
    integrated road and air networks have given us a strong position in the European
    market and are an important strategic asset with dense coverage in 33 European
    countries. We expanded our European network in 2005 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 then 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 then linehauled
    to a domestic road hub, an international road hub or one of our airports,
    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


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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 then 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 then load them on the appropriate delivery vehicle.
    Proof of delivery is entered into the Global Link 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. 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. 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. In 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 interest in 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, particularly the intercontinental routes, should grow
    at faster rates than European domestic markets. The market in Europe has undergone
    a period of intense consolidation in recent years and now has five other major
    players: Deutsche Post (DHL), FedEx Corp. (FedEx), Geopost-Groupe (La Poste),
    Royal Mail Plc (GLS) 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 regional operators. 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. With respect to our European network, we
    added Palermo and Cagliari as new airport connections in September and October
    2005, respectively, but closed Naples and Turin in April and July 2005, respectively.
    We further expanded our already dense network coverage by introducing new
    co-load airport connections in Skopje, Belgrade and Sarajevo during 2005. 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 a further one
        will be added in 2006. The five aircraft, leased for five years from GE
        Capital Aviation Services, will replace chartered aircraft currently operating
        in our express air network. We also entered into another agreement in
        June 2005 with GE Capital Aviation Services for two additional leased
        Boeing 737s. These aircraft are due for delivery in 2006.INVESTMENTS
        
        In 2004, we announced a €36 million investment plan for our Liège
        air hub, which is intended to improve transit times for our customer base
        and increase the percentage of consignments delivered on-time and in perfect
        condition. We originally planned for this project 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 has been increased and this has allowed
        us to delay the implementation of the next stage. The project is progressing
        well with a total amount spent on 31 December 2005 of €14 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 the first quarter of 2006.
        The planned investment is intended to:
      accommodate
        growth in the number of airport destinations and sorting splits,
      remove
        time consuming, non-ergonomic manual processes,
      provide
        extra capacity,
      reduce
        damaged shipments,
      allow
        later departures and earlier arrivals, and
      increase
        staff productivity.In
        2005, we announced a €14 million investment plan for our Duiven road
        hub of which we have spent €7 million by 31 December 2005. The building
        of the extended hub has been completed and is expected to be fully operational
        by March 2006. The investment is intended to:
      increase
        hub sortation space by 3,500 square metres,
      double
        the sorting capacity to cope with future growth,
      improve
        transit times,
      improve
        facilities for staff, and
      improve
        security.Express
        Rest of the World 
        The 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. We also are building our position in Asia
        and have further improved service levels between Europe and Asia. Our
        worldwide coverage extends to more than 200 countries.In
        China, we have built an extensive network consisting of 25 company-owned
        locations and 50 agency franchises which together serve over 600 cities.
        We intend to differentiate


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from other major integrators
    by developing and capitalising an extensive road network in China. The network
    is planned to be significantly enhanced in 2006 as we are in advanced negotiations
    for the acquisition of Hoau, Chinas largest privately owned transportation
    network offering comprehensive road coverage among 1,100 locations in China. We have announced plans
    to increase our uplift capacity between China and Europe through the addition
    of two Boeing 747 aircraft that are due to be delivered in December 2006 and
    June 2007 respectively. Each new aircraft to be delivered by Boeing will provide
    100 tonnes of capacity and will facilitate our strong growth in the region. Our Express Rest of the
    World business line operates in a similar way as 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 regional road network
    in the Middle East continues to grow strongly and represents an increasing
    share of our business in that region. In December 2005 we launched a similar
    regional road network for Asia covering Singapore, Malaysia and Thailand.
    We expect the network to expand into adjoining countries in 2006. On 1 February 2006, we
    announced the launch of domestic services in India, which we believe will
    make TNT the first multinational brand in India to offer international and
    domestic services using an integrated air and road network. In preparation
    for the launch, TNT increased its presence in India from 17 to 50 locations
    during 2005. We intend to continue expansion in 2006, by the end of which
    we expect to operate out of 144 locations. 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. In Australia, the underlying
    operations improved year-on-year, continuing the turnaround of this business.
    Revenues were impacted by the carry-over effects of business integration issues
    and industrial disputes in 2004, however cost control remained strong and
    yield improvements continued through appropriate pricing action and targeted
    new tariffs. In line with divisional strategy, the sales organisation was
    reviewed and refined in 2005, leading to strong sales results in the latter
    part of the year. 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 have introduced improved next-day delivery services
    to nine major business centres, including New York, Washington D.C., Chicago
    and Toronto. Express Rest of the World
    primarily competes with the three major carriers, which are UPS, FedEx and
    Deutsche Post




(DHL). All of these carriers
    are pursuing aggressive expansion strategies in China and other emerging markets. EXPRESS BUSINESS MARKET
    TRENDSWe believe that the following are the main competitor and market
    developments affecting the express business. The express sector experienced
    further merger and acquisition activity in 2005. Additionally, it has been
    transformed geographically through the rapid expansion in developing markets,
    the global relocation of manufacturing bases and the liberalisation of other
    markets. Mature markets showed slower growth. The soaring oil prices of 2005
    affected the industry, where the extra fuel costs were either passed on to
    customers or eroded business profitability. Finally more attention seems to
    be given to customer needs with many operators placing extra emphasis on customer
    service initiatives as a way to differentiate themselves. Acquisition strategies
    that involve very targeted purchases have enabled some larger players to build
    and strengthen their express delivery networks in key domestic markets. The
    purchase of TG+ by TNT in Spain and Lynx Express by UPS in the United Kingdom
    are prime examples. A similar strategy has also enabled some players to expand
    their international networks, extending coverage from mature markets to those
    that are rapidly developing. The purchase of smaller players in Eastern Europe
    by players with a strong presence in Western Europe is evidence of this. These acquisition strategies
    have been fuelled by increased volumes and revenues in growth markets, namely
    Asia and Eastern Europe. Major express players have been actively enhancing
    and modifying their international networks in order to harness this growth
    and balance the flows into and out of these growth areas. Direct network links
    between China and Europe, China and North America and links between India,
    Asia and the Middle East have reflected these geographic shifts. Western European countries
    have continued to relocate their manufacturing bases to Asian markets and
    Eastern European countries. Expansion of the automotive components and high-tech
    industries in the Czech Republic and Slovakia, developments in the pharmaceutical
    industry in the Baltics and outsourcing to India and Asia have all had their
    impact and the express industry has responded accordingly. China has continued to
    dominate the Asia region in terms of activity and growth where we estimate
    the growth in the express industry has been 30% on average over the past five
    years. As the Chinese market continues to liberalise, however, the focus is
    moving from international to domestic activities. On a still increasing basis,
    foreign companies relocate or set up new facilities in China, particularly
    in the automotive, pharmaceutical and high-tech sectors. New facilities are
    set up to serve export markets, particularly the Asia region, but also to
    satisfy the growing demand from domestic markets. As a result, integrators
    have begun initiatives that will see


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|The
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        4
|---------------------------- | -----------------

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the investment of millions
    of dollars in the development of domestic networks, acquisition of local players
    and the construction of super-hubs on the China mainland. With approval for the
    privatisation of Japan Post, a minor revolution in Japans very lucrative
    express and parcels sector has commenced. In addition, Japans economy
    has been showing clear signs of recovery. Korea and Vietnam are beginning
    to demonstrate that they will also be key in the long term development of
    the express and parcels industry in Asia. Vietnam in particular is opening
    up its postal market and easing the business environment for foreign firms.
    With the concerns over the long term viability of Chinas economic development,
    a larger footprint in Asia will be necessary to secure success. Other fast expanding
    markets are India, Russia and the Middle East. India is considered to be one
    of the best growth opportunities for express in the developing world. Growing
    international trade, massive investment in infrastructure, increasing levels
    of disposable income and strong manufacturing and retail sectors have combined
    to produce a dynamic market environment in India. Russias international
    business outlook has benefited from the recent bilateral agreement with 29
    WTO members, including the EU, although it remains a country with a difficult
    business environment. The Middle East market is expected to grow, with double
    digit increase in freight volumes to and from the region, growing economies,
    the reconstruction of Iraq, and the diversification of investment away from
    oil. With mature express markets
    (United Kingdom, Germany, etc.) showing slowed growth and at times stagnation
    there is a move to investing in the more dynamic developing economies and
    an increased focus on opportunities that can be leveraged from the liberalisation
    of the postal industry. Affiliations between postal and parcel operators and
    the expansion of express alternatives (cost competitive, day specific
    delivery) is also changing the face of the market. These developments have
    signalled a diversification of possible service and customer needs. There has also been an
    indication of an expansion in focus for many express operators towards the
    business to consumer sector. Customers and their needs have been featuring
    more heavily in the longer term strategies of major players. Proposed investment
    in retail networks, drop-off and collection points by some express players
    demonstrate a clear attempt to capture a larger audience, demonstrate a more
    visible presence and a move to increasing opportunities for customer interactions.
    A very clear trend towards improving customer service in the express industry
    was apparent, be it in the form of improved customer experiences on customer
    websites, or large scale, sometimes expensive, customer-centric advertising
    campaigns. However, even with this very apparent move towards improving the
    customer experience, above all the most important issue for express service
    customers is still exceptional service quality.




FREIGHT MANAGEMENT
    BUSINESS OVERVIEWIn August 2004, our global freight management capabilities
    were established through our acquisition of Wilson, a freightmanagement
    business comprising primarily air and sea freight transportation. Freight
    management is an attractive stand-alone business which has economic resilience.
    In general, freight management operators do not own assets to provide transportation
    services because they acquire cargo space from airline and shipping firms.
    The asset-light profile of freight management provides flexibility to adjust
    to changes in volumes. We expect that the addition of freight management capabilities
    and expertise will enable us to offer our knowledge, skills and value added
    activities to a larger potential customer base while at the same time providing
    existing customers with a broader service offering. The acquisition of Wilson
    was a major step in becoming a global freight management company. Wilson was
    rebranded into TNT Freight Management as of 1 July 2005. The global network
    operates from 130 offices in 28 countries with a significant presence in the
    Nordic region. We plan to continue to grow our freight management capabilities
    organically and increase the density of our operations in the Americas and
    Asia. The retention rate following the acquisition of Wilson is very high
    and the turnover rate in operational management was negligible. Freight Management
    NordicsIn this region (Sweden, Denmark, Finland and Norway) we offer,
    in addition to air and sea freight services, services tailored to the demands
    of the marine industry. We provide freight management services to sailing
    fleets, shipping companies and ship management companies. The global fleet
    of merchant and cruise ships is expanding, which combined with limited shipyard
    capacity, provides opportunities for freight management operators with marine
    industry experience. We have a broad client base including customers in the
    automotive, airline, consumer goods, electronics and marine industries. TNT Freight Management
    has a significant presence in Sweden and Denmark, which are markets dominated
    by a few global freight management companies. Our strong position in these
    markets results in significant capacity allocations from suppliers, particularly
    airlines. The majority of our business is in exports, however, air and ocean
    import volumes from Asia, particularly China, were strong in 2005. Freight Management
    EuropeIn this region (Europe excluding Nordics) we offer sea-air
    combined services in addition to air and sea freight services. The sea-air
    combined service is a time saving and cost saving transport mode for import
    shipments from 14 countries in the Far East and South-east Asia. This mode
    of transportation is faster than sea freight and less costly than airfreight.
    We have a broad client base including customers in the automotive, pharmaceuticals,
    consumer goods, electronics and marine industries.


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        Annual Report and Form 20-F |  | 43
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|Chapter
      4 | The express division
|--------------- | --------------------

---

Airfreight from Asia
    continues to increase, which has also resulted in growth in the sea-air service.
    Business with several large new customers was started in 2005. This new business
    has complex traffic flows involving suppliers in multiple European countries.
    Competition in this region comes primarily from freight management companies
    with large global networks. Freight Management
    Asia/PacificOur operations in this region are primarily related to air
    export. Volume growth from China was a significant factor in 2005, and this
    trend is expected to continue. New business was obtained from customers in
    the pharmaceutical and consumer goods industries. We received a trading licence
    for our Shanghai office that allows it to arrangeshipments




directly with air
    and sea carriers rather than through agents. We will continue to pursue trading
    licences for other areas within China. Freight Management
    AmericasOperations in this region have strong flows from both the Nordic
    and Asia/Pacific regions. New business was obtained from customers in the
    automotive and retail business (department store and food store). Competition
    is high in this region particularly from global freight management companies
    with dense networks in the United States. We will continue to look for opportunities
    to expand our network coverage in the United States. We will also continue
    developing our capabilities in Brazil, as this economy is expected to continue
    expanding.


EXPRESS DIVISION FINANCIAL
  REVIEW

The following table sets
    forth the financial performance of our express division for the past two years:


|                                                                                                                                                                 |        |          |        |      |       | Year
        ended at 31 December
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | -------- | ------ | ---- | ----- | ---------------------------------
|Express
      division financial overview                                                                                                                        | 2005   | variance |        | 2004 | 1    
|                                                                                                                                                                 |        | US$      |        | €    |       | %                                
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Express                                                                                                                                                          | 6,317  |          | 5,334  |      | 8.3   |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Freight
        management                                                                                                                                       | 934    |          | 789    |      | 182.8 |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Inter-segmental
        revenues                                                                                                                                 | (17    | )        | (14    | )    |       |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Total
      operating revenues                                                                                                                                   | 7,234  |          | 6,109  |      | 17.4  |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|as
      % of total operating revenues TNT                                                                                                                       |        |          | 60.6   |      |       |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Total
      operating expenses                                                                                                                                   | (6,660 | )        | (5,624 | )    | 16.7  |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|Total
      operating income                                                                                                                                     | 574    |          | 485    |      | 27.3  |                                  
|                                                                                                                                                                 |        |          |        |      |       |                                  
|(in millions,
      except percentages)                                                                                                                          |        |          |        |      |       |                                  
|1    Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.

EXPRESS BUSINESSThe following tables set forth the financial performance of
    our express segment for the past two years:


|                                             |                                                                                                                                                             |          |       |      |      | Year
        ended at 31 December
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----- | ---- | ---- | ---------------------------------
|Express
      business operating revenues    | 2005                                                                                                                                                        | variance |       | 2004 | 1   
|                                             |                                                                                                                                                             | US$      |       | €    |      | %                                
|                                             |                                                                                                                                                             |          |       |      |      |                                  
|Express Europe                               | 5,151                                                                                                                                                       |          | 4,349 |      | 7.6  |                                  
|                                             |                                                                                                                                                             |          |       |      |      |                                  
|Express Rest
      of the World              | 1,166                                                                                                                                                       |          | 985   |      | 11.7 |                                  
|                                             |                                                                                                                                                             |          |       |      |      |                                  
|Total
      operating revenues               | 6,317                                                                                                                                                       |          | 5,334 |      | 8.3  |                                  
|                                             |                                                                                                                                                             |          |       |      |      |                                  
|as
        % of total operating revenues TNT |                                                                                                                                                             |          | 52.8  |      |      |                                  
|                                             |                                                                                                                                                             |          |       |      |      |                                  
|(in millions,
      except percentages)      |                                                                                                                                                             |          |       |      |      |                                  
|1                                            | Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.

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|44 |  | 2005 Annual Report
      and Form 20-F
|-- |  | --------------------------------------

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|The
        express division | Chapter
        4
|---------------------------- | -----------------

---

|                                                                                                                                                                 |       |          |       |      | Year
        ended at 31 December
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | -------- | ----- | ---- | ---------------------------------
|Express business
      operating expenses                                                                                                                        | 2005  | variance |       | 2004 | 1                                
|                                                                                                                                                                 | US$   |          | €     |      | %                                
|                                                                                                                                                                 |       |          |       |      |                                  
|Cost of materials                                                                                                                                                | 255   |          | 215   |      | 43.3                             
|                                                                                                                                                                 |       |          |       |      |                                  
|Work contracted out
      and other external expenses                                                                                                            | 3,029 |          | 2,557 |      | 6.5                              
|                                                                                                                                                                 |       |          |       |      |                                  
|Salaries and social
      security contributions                                                                                                                 | 1,950 |          | 1,647 |      | 4.0                              
|                                                                                                                                                                 |       |          |       |      |                                  
|Depreciation, amortisation
      and impairments                                                                                                                 | 201   |          | 170   |      | 4.3                              
|                                                                                                                                                                 |       |          |       |      |                                  
|Other operating expenses                                                                                                                                         | 321   |          | 271   |      | 8.0                              
|                                                                                                                                                                 |       |          |       |      |                                  
|Total operating
      expenses                                                                                                                                   | 5,756 |          | 4,860 |      | 6.9                              
|                                                                                                                                                                 |       |          |       |      |                                  
|(in millions,
      except percentages)                                                                                                                          |       |          |       |      |                                  
|1    Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.

|                                                                                                                                                                 |      |          |      |      |      |                                   |     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | -------- | ---- | ---- | ---- | --------------------------------- | ----
|                                                                                                                                                                 |      |          |      |      |      | Year
        ended at 31 December |     
|Express
      business operating income                                                                                                                          | 2005 | variance |      | 2004 | 1   
|                                                                                                                                                                 |      | US$      |      | €    |      | %                                 |     
|                                                                                                                                                                 |      |          |      |      |      |                                   |     
|Total
      operating income                                                                                                                                     | 561  |          | 474  |      | 26.4 |                                   | 375 
|                                                                                                                                                                 |      |          |      |      |      |                                   |     
|as
      % of express operating revenues                                                                                                                         |      |          | 8.9% |      |      |                                   | 7.6%
|                                                                                                                                                                 |      |          |      |      |      |                                   |     
|(in millions,
      except percentages)                                                                                                                          |      |          |      |      |      |                                   |     
|1    Comparative
      figures have been adjusted to reflect the transfer of innight services from
      our discontinued logistics business to express in 2005.

|                                                                                                                    |           |      |           |      |                                   |     
|------------------------------------------------------------------------------------------------------------------- | --------- | ---- | --------- | ---- | --------------------------------- | ----
|Express business
      operating statistics 1                                                                       |           |      |           |      | Year
        ended at 31 December
|                                                                                                                    | 2005      | 2004 |           | 2003 |                                   | 2002
|                                                                                                                    |           |      |           |      |                                   |     
|Number of consignments
      (in thousands)                                                                         | 179,275   |      | 176,429   |      | 170,782                           |     
|                                                                                                                    |           |      |           |      |                                   |     
|Total number of tons
      carried                                                                                  | 3,520,109 |      | 3,378,863 |      | 3,203,138                         |     
|                                                                                                                    |           |      |           |      |                                   |     
|Average of number of
      working days                                                                             | 253       |      | 260       |      | 250                               |     
|                                                                                                                    |           |      |           |      |                                   |     
|Number of depots/hubs                                                                                               | 882       |      | 857       |      | 836                               |     
|                                                                                                                    |           |      |           |      |                                   |     
|Number of vehicles
      2                                                                                          | 19,747    |      | 19,023    |      | 18,308                            |     
|                                                                                                                    |           |      |           |      |                                   |     
|Number of aircraft
      2                                                                                          | 43        |      | 42        |      | 43                                |     
|                                                                                                                    |           |      |           |      |                                   |     
|1    The
      express business operating statistics do not include statistical data of
      our innight services.
|2    A
      substantial number of vehicles and aircraft are not owned by us but leased
      or subcontracted.    

During 2005, our express
    business 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 yield management
    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 business include on-time
    delivery, customer satisfaction and employee satisfaction. EXPRESS BUSINESS OPERATING
    REVENUESOperating revenues of our express business for 2005 increased
    by €411 million (8.3%) compared to 2004. The organic growth in operating
    revenues of our business was €376 million (7.6%). 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 €308 million (7.6%) compared to 2004.
    The organic growth in operating revenues was €300 million (7.4%). 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.


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        Annual Report and Form 20-F |  | 45
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|Chapter
      4 | The express division
|--------------- | --------------------

---

Express Rest of the World
    operating revenues for 2005 increased by €103 million (11.7%) compared
    to 2004. This was achieved through the €76 million (8.6%) organic growth
    in operating revenues from operations, primarily in China, Taiwan and the
    Middle East, and from positive foreign exchange effects of €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 BUSINESS OPERATING
    EXPENSESOperating expenses of our express business for 2005 increased
    by €312 million (6.9%) 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 €65
    million (43.3%) 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 €64
    million (4.0%) 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 €7 million (4.3%)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 €20 million (8.0%) due to increased advertising and consultants costs. EXPRESS BUSINESS OPERATING
    INCOMEThe express business operating income for 2005 increased by
    €99 million (26.4%) 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, Czech Republic and Poland. The organic growth in operating
    income for 2005 increased by €94 million (25.1%) 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. FREIGHT MANAGEMENT
    BUSINESSThe following tables set forth the financial performance of
    our freight management segment for the past two years:


|                                                      |      |      | Year
        ended at 31 December
|----------------------------------------------------- | ---- | ---- | ---------------------------------
|Freight
      management business                     | 2005 | 2004 |                                  
|                                                      | US$  |      | €                                
|                                                      |      |      |                                  
|Total operating
      revenues                        | 934  |      | 789                              
|                                                      |      |      |                                  
|as
      % of total operating revenues TNT            |      |      | 7.8                              
|                                                      |      |      |                                  
|Cost of materials                                     |      |      |                                  
|                                                      |      |      |                                  
|Work contracted out
      and other external expenses | (745 | )    | (629                             
|                                                      |      |      |                                  
|Salaries and social
      security contributions      | (111 | )    | (94                              
|                                                      |      |      |                                  
|Depreciation, amortisation
      and impairments      | (20  | )    | (17                              
|                                                      |      |      |                                  
|Other operating expenses                              | (45  | )    | (38                              
|                                                      |      |      |                                  
|Total operating
      expenses                        | (921 | )    | (778                             
|                                                      |      |      |                                  
|Total operating
      income                          | 13   |      | 11                               
|                                                      |      |      |                                  
|as
      % of total operating revenues                |      |      | 1.4                              
|                                                      |      |      |                                  
|(in millions, except
      percentages)               |      |      |                                  

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|46 |  | 2005 Annual Report
      and Form 20-F
|-- |  | --------------------------------------

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  to Contents



|The
        express division | Chapter
        4
|---------------------------- | -----------------

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FREIGHT MANAGEMENT
    BUSINESS OPERATING REVENUESDue to the acquisition of Wilson in August 2004, operating
    revenues and operating income for 2005 and 2004 are not comparable. Operating
    revenues organically grew 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 Nordics were positively impacted
    primarily by ocean volumes in Sweden, although all units in this region experienced
    an increase in operating revenues. The revenues from Freight Management Europe
    were positively impacted by new business. The revenues from Freight Management
    Americas were adversely affected by the loss of one customer in North America
    and negative foreign exchange effects in South America. The revenues from
    Freight Management Asia/Pacific were positively impacted, primarily by growth
    in the Hong Kong and Australia units. FREIGHT MANAGEMENT
    BUSINESS OPERATING EXPENSESFreight management operating expenses have remained generally
    consistent as a percentage of revenues between 2004 and 2005. Freight managements
    major expense is related to transportation services provided by airlines and
    shipping firms. The slight decrease in depreciation, amortisation and impairments
    as a percentage of revenues is attributable to the Wilson trademark, which
    was fully amortised as of 30 June 2005. The slight increase in salaries and
    social contributions and other operating expenses as a percentage of revenues
    is attributable to integration expenses.






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        Annual Report and Form 20-F |  | 47
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|48 |  | 2005 Annual Report
      and Form 20-F
|-- |  | --------------------------------------

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| | Chapter
        5
| | -----------------





THE



DISCONTINUED



LOGISTICS



OPERATIONS



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|2005
        Annual Report and Form 20-F |  | 49
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|Chapter
      5 | The discontinued logistics
      operations
|--------------- | -------------------------------------------

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DISCONTINUED LOGISTICS
    BUSINESS DESCRIPTION GENERALIn July 2005, we announced our intention to dispose of our
    French transportation activities and French contract logistics business. The
    combination of a lack of profitable new business in a market with excess capacity,
    competition from low cost Eastern European based transport providers and a
    high fixed cost base, which has led to a continuation of disappointing earnings,
    resulted in the decision during 2005 to sell those activities. For more information
    see the paragraph Sale of French logistics activities below. On 6 December 2005, we
    announced a refined strategy to focus on what we do best: providing delivery
    services by expertly managing transportation networks for providing delivery
    services. One of the main elements of our refined strategy was the decision
    to exit globally from our non-network related logistics activities. We will
    retain our freight management and innight activities as we consider that they
    fit with our network strategy. These businesses have been accounted for in
    our express division. As a result of the decision
    to exit our non-network related logistics activities, we have accounted for
    our non-network related logistics business in this annual report as discontinued
    operations/assets held for sale. The decision to sell the majority of the
    logistics business, announced on 6 December 2005, has not to date had a significant
    impact on the ongoing operational strategy for this business, or the commitment
    to meeting the businesss existing and future customers demands
    for high quality logistics solutions. Some contract renewals have been postponed
    until the customers ascertain the new owner of the discontinued logistics
    business. DISCONTINUED LOGISTICS
    BUSINESS OVERVIEWWith operations in 28 countries, the discontinued logistics
    business provides services focused on supply chain management. It works to
    ensure that across the functions of procurement, manufacturing and distribution
    the right goods, in the right quantities and condition are available at the
    right place and time. One key aspect of this is reducing the time it takes
    to bring goods from suppliers to their customer by using the latest technology
    to increase our customers visibility of their goods in the supply chain. The discontinued logistics
    business operates in Europe, North and South America, Asia and Australia.
    Our strategy has focused on achieving critical mass in selected geographies
    and five industry sectors: automotive, tyres, high-tech electronics, publishing
    and media, and fast-moving consumer goods. With a few exceptions in certain
    sectors, we believe we have achieved critical mass in terms of market presence
    and customer base in every market it serves.




The service offering depends
    upon and is tailored to each customers needs. It has developed specialised
    knowledge and skills, and provides a range of value-added activities such
    as: 
      specialised
        distribution services,
      value-added
        warehousing,
      inventory
        control,
      order
        picking and information systems management to control production and parts
        supply,
      data
        and documentation management services,
      sub-assembly
        and installation upon delivery,
      repair
        servicing and returns,
      sequencing
        and kitting,
      systems
        integration,
      stock
        management,
      global
        materials management, and
      supply
        chain management consulting. The logistics business
    is affected by the seasonal slowdown of one of the larger target sectors on
    which it focuses, the automotive sector. Typically this slowdown takes place
    in the third quarter of the year, when many of the automotive manufacturing
    plants close for summer holidays and in the fourth quarter, when plants close
    for Christmas and New Year. As the complexity and
    scope of logistics assignments grow, we believe securing this role will be
    increasingly dependent on a providers information technology capabilities
    and geographic reach. The main technology that the business uses to provide
    lead logistics services is called MatrixTM. It offers an integrated
    suite of technologies that enables us to manage complex domestic and global
    supply chains and we continued to invest in this technology throughout 2005. MARKET TRENDS AND SALE
    PROCESSAlthough the logistics market is still regarded as fragmented,
    mergers and acquisition activity in the logistics industry continued in 2005,
    involving some of the biggest players in the market. This has reinforced the
    trend towards a two-tiered industry. At the top-tier, global or regional industry
    market leaders provide the full spectrum of supply chain solutions across
    geographies. They often act as lead logistics providers, subcontracting parts
    of the supply chain activities, for example transportation, to specialist
    players but serve as a single point of contact for the customer. The smaller
    specialist logistics providers form the second tier, often as a subcontractor
    for the market leaders. DISCONTINUED LOGISTICS
    FINANCIAL REVIEW In 2005, the discontinued
    logistics business earned revenues of €3,556 million. The following table
    sets forth an income statement for the discontinued logistics business for
    the last two years. The discontinued logistics business excludes the results
    from the previously reported freight management


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|50 |  | 2005 Annual Report
      and Form 20-F
|-- |  | --------------------------------------

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  to Contents



|The
        discontinued logistics operations | Chapter
        5
|--------------------------------------------- | -----------------

---

|                                                      |        |          |        |      | Year
        ended at 31 December |  
|----------------------------------------------------- | ------ | -------- | ------ | ---- | --------------------------------- | -
|Discontinued
      logistics                          | 2005   | variance |        | 2004 |                                  
|                                                      | US$    |          | €      |      | %                                 |  
|                                                      |        |          |        |      |                                   |  
|Total
      operating revenues                        | 4,211  |          | 3,556  |      | (0.7                              | )
|                                                      |        |          |        |      |                                   |  
|Other
      income                                    | (116   | )        | (98    | )    |                                   |  
|                                                      |        |          |        |      |                                   |  
|Cost of
      materials                               | (295   | )        | (249   | )    | (3.5                              | )
|                                                      |        |          |        |      |                                   |  
|Work contracted
      out and other external expenses | (2,111 | )        | (1,783 | )    | 1.1                               |  
|                                                      |        |          |        |      |                                   |  
|Salaries
      and social security contributions      | (1,320 | )        | (1,115 | )    | (0.7                              | )
|                                                      |        |          |        |      |                                   |  
|Depreciation,
      amortisation and impairments      | (103   | )        | (87    | )    | (3.3                              | )
|                                                      |        |          |        |      |                                   |  
|Other operating
      expenses                        | (285   | )        | (241   | )    | 13.1                              |  
|                                                      |        |          |        |      |                                   |  
|Total
      operating expenses                        | (4,114 | )        | (3,475 | )    | 0.8                               |  
|                                                      |        |          |        |      |                                   |  
|Total
      operating income                          | (19    | )        | (17    | )    | (112.8                            | )
|                                                      |        |          |        |      |                                   |  
|Net financial
      (expense)/income                  | (75    | )        | (63    | )    | 5.0                               |  
|                                                      |        |          |        |      |                                   |  
|Results
      from investments in associates          | 0      |          | 0      |      |                                   |  
|                                                      |        |          |        |      |                                   |  
|Income
      tax                                      | (37    | )        | (31    | )    | (29.5                             | )
|                                                      |        |          |        |      |                                   |  
|Profit/(loss)
      for the period                    | (131   | )        | (111   | )    |                                   |  
|                                                      |        |          |        |      |                                   |  
|Attributable
      to:                                |        |          |        |      |                                   |  
|                                                      |        |          |        |      |                                   |  
|Minority
      interests                              | 0      |          | 0      |      |                                   |  
|                                                      |        |          |        |      |                                   |  
|Shareholders                                          | (131   | )        | (111   | )    | (458.1                            | )
|                                                      |        |          |        |      |                                   |  
|(in millions,
      except percentages)               |        |          |        |      |                                   |  

|Discontinued logistics
      statistics                  |       |      | At
        31 December
|-------------------------------------------------------- | ----- | ---- | ----------------------
|                                                         | 2005  | 2004 |                       
|                                                         |       |      |                       
|Number of warehouses
      (including joint ventures)    | 594   |      | 572                   
|                                                         |       |      |                       
|Number of square metres
      (including joint ventures) | 8,107 |      | 6,799                 
|                                                         |       |      |                       
|Joint ventures                                           |       |      |                       
|                                                         |       |      |                       
|Number of warehouses                                     | 44    |      | 44                    
|                                                         |       |      |                       
|Number of square metres                                  | 1,360 |      | 1,359                 
|                                                         |       |      |                       
|(square metres in thousands)                             |       |      |                       

and innight activities,
    now reported in the express division. The prior period has been restated to
    be presented on a comparable basis, reflecting the above transfer. For further
    information, including a condensed balance sheet, please refer to note 8 of
    our consolidated financial statements. During 2005, the discontinued
    logistics operations showed a €25 million decrease in operating revenues
    compared to 2004. This was mainly a result of the deteriorating performance
    of our French operations, contract terminations, mainly in the United Kingdom,
    and lower volumes in automotive contracts. However, this was partially offset
    by strong revenue growth in North America, Australia, and Asia. Of the decline
    in operating income of €150 million, €154 million relates to our
    French logistics activities and their subsequent disposal, partly offset by
    an increase in operating income from the remainder of our discontinued logistics
    business. SALE
    OF FRENCH LOGISTICS ACTIVITIESDuring 2005 we sold most of our French transportation activities
    and French contract logistics operations. Thesale
    of the majority of those activities was effected in two transactions, both
    closed in the fourth quarter of 2005, with




further transactions
    being closed in the first quarter of 2006. The business sold in 2005 constituted
    approximately 90% of our French logistics business unit. The total pre-tax
    loss of the sale transactions of the French logistics activities was €102
    million and this has been included in other income in the income statement.
    The remainder of the business has since been sold. Operating losses of the
    disposed business amounted to €52 million in 2005 and included €18
    million of restructuring charges mainly relating to reorganisation and redundancy
    costs and €3 million of asset impairments. Contingent assetsAs a result of the
    sale and the consequent liquidation of the remaining relevant entities of
    our French business, we expect to realise a tax credit of approximately €90
    million. This potential benefit has not been reflected in our accounts.


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        Annual Report and Form 20-F |  | 51
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|Chapter
      5 | The discontinued logistics
      operations
|--------------- | -------------------------------------------

---

DISCONTINUED LOGISTICS
  OPERATING REVENUES

|                                        |       |   |       |      |          |   | Year
        ended at 31 December
|--------------------------------------- | ----- | - | ----- | ---- | -------- | - | ---------------------------------
|Operating revenues
      per industry   | 2005  | % |       | 2004 |          | % |                                  
|                                        | US$   |   | €     |      | of total |   | €                                
|                                        |       |   |       |      |          |   |                                  
|Automotive                              | 1,644 |   | 1,388 |      | 39.0     |   | 1,362                            
|                                        |       |   |       |      |          |   |                                  
|FMCG                                    | 722   |   | 610   |      | 17.2     |   | 642                              
|                                        |       |   |       |      |          |   |                                  
|Hi-tech electronics                     | 499   |   | 421   |      | 11.8     |   | 443                              
|                                        |       |   |       |      |          |   |                                  
|Publishing & media                      | 291   |   | 246   |      | 6.9      |   | 250                              
|                                        |       |   |       |      |          |   |                                  
|Tyres                                   | 219   |   | 185   |      | 5.2      |   | 177                              
|                                        |       |   |       |      |          |   |                                  
|Other                                   | 836   |   | 706   |      | 19.9     |   | 707                              
|                                        |       |   |       |      |          |   |                                  
|Total                                   | 4,211 |   | 3,556 |      | 100.0    |   | 3,581                            
|                                        |       |   |       |      |          |   |                                  
|(in millions, except
      percentages) |       |   |       |      |          |   |                                  
|                                        |       |   |       |      |          |   |                                  

|                                               |       |   |       |      |          |   | Year
        ended at 31 December
|---------------------------------------------- | ----- | - | ----- | ---- | -------- | - | ---------------------------------
|Operating revenues
      per geographic region | 2005  | % |       | 2004 |          | % |                                  
|                                               | US$   |   | €     |      | of total |   | €                                
|                                               |       |   |       |      |          |   |                                  
|Europe                                         | 2,924 |   | 2,469 |      | 69.4     |   | 2,631                            
|                                               |       |   |       |      |          |   |                                  
|North America                                  | 782   |   | 660   |      | 18.6     |   | 595                              
|                                               |       |   |       |      |          |   |                                  
|Rest of the World                              | 505   |   | 427   |      | 12.0     |   | 355                              
|                                               |       |   |       |      |          |   |                                  
|Total operating
      revenues                 | 4,211 |   | 3,556 |      | 100.0    |   | 3,581                            
|                                               |       |   |       |      |          |   |                                  
|(in millions, except
      percentages)        |       |   |       |      |          |   |                                  
|                                               |       |   |       |      |          |   |                                  
|                                               |       |   |       |      |          |   |                                  
|Number of countries
      of operation         |       |   | 28    |      |          |   | 28                               
|                                               |       |   |       |      |          |   |                                  
|                                               |       |   |       |      |          |   |                                  

The operating revenues
    for our discontinued logistics activities decreased in 2005 by €25 million
    (0.7%) compared to 2004. Organic operating revenues decreased by €69
    million (1.9%) in 2005 compared to 2004. This decrease was primarily due to
    contract terminations in Europe, mostly in the United Kingdom and due to the
    sale of most of our French operations in the fourth quarter of 2005. The European region also
    saw lower volumes in the Benelux region and in Italian automotive contracts.
    This unfavourable effect was partly offset by commencement of new contracts
    in the United States and the Rest of the World (mostly in Australia and Asia).
    Foreign exchange effects increased logistics operating revenues in 2005 by
    €42 million (1.2%) compared to 2004, mainly due to the depreciation of
    the euro against other currencies, especially those in South America, the
    United States and Australia. DISCONTINUED LOGISTICS
    OPERATING EXPENSESOperating expenses increased by €27 million (0.8%) to
    €3,480 million in 2005. The decrease in cost
    of materials was due to the disposal of the Nordic business sold in 2004 and
    reduced costs in line with revenue reductions. Expenses for work contracted
    out increased by €19 million (1.1%) which was related to the increase
    in operational activity in the Australia and North America region (totalling




€61 million) and
    the full year consolidation impact of Turkey (€10 million) offset by
    a reduction in temporary labour costs in the United Kingdom and Italy (totalling
    €49 million) and other smaller increases. Salaries, including social
    and pension contributions decreased by 0.7% (€8 million), which was a
    result of headcount reductions in China, Benelux and Central Europe and partially
    offset by costs associated with rationalisation measures in France due to
    a reduction of business activity and business growth in United States and
    Australia. Other operating expenses
    increased by €28 million (13%) of which the most significant increase
    was related to increased provisions, a tariff dispute in our Italian operations
    and associated legal costs (€10 million). The majority of the remaining
    increase related to increased costs in the Central and Eastern Europe region
    (€8 million) and Italy (€6 million). DISCONTINUED LOGISTICS
    OPERATING INCOME AND PROFIT FOR THE PERIODIn 2005 discontinued operations resulted in a loss for the
    period before minority interest of €111 million, a decrease of €139
    million compared to 2004. This loss was mainly the result of the loss on the
    sale of our French business (€102 million), deteriorating results in
    France, contract terminations in the United Kingdom, and increased operating
    expenses of €32 million (including €18 million of restructuring
    costs and €3 million of asset impairment charges in France).


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|The
        discontinued logistics operations | Chapter
        5
|--------------------------------------------- | -----------------

---

Net financial expenses
    increased by €3 million (5.0%), representing interest on funding from
    TNT facilities and the movement on fair value of financial instruments. Income
    taxes decreased by €13 million (29.5%) primarily as a result of tax credits
    relating to our discontinued French operations. DISCONTINUED LOGISTICS
    CASH FLOWThe following table sets forth a condensed cash flow statement
    for the discontinued logistics business for the past two years. The prior
    period has been adjusted to be presented on a comparable basis. Cash
          flow statement
      
      
      
      Year
          ended at 31 December2005
      2004Net
        cash from operating activities
      28
      
      250Net cash
        used in investing activities
      (19
      )
      (22
      )Net cash
        used in financing activities
      19
      
      (216
      )Change
        in cash
      28
      
      12Cash
        at the beginning of the period
      71
      
      60Exchange
        rate differences
      5
      
      (1
      )Change
        in cash
      28
      
      12Cash
        at the end of the period
      104
      
      71(in €
        millions) Net cash from operating
    activitiesNet cash from operating activities was €222 million lower
    compared to 2004, primarily due to the loss on the disposal of the majority
    of our French operations and associated costs (€102 million) combined
    with €45 million of lower operating income. Net working capital also
    declined €48 million, mainly as a result of deterioration in accounts
    payable in some of the larger business units and a further net deterioration
    of €24 million in other areas. Net cash used in investing
    activitiesThe reduction in cash used in investing activities was due
    to €16 million lower spend on the acquisition and disposal of group companies
    compared to 2004, partially offset by an increase in capital expenditure on
    property, plant and equipment of €12 million. The additional capital
    expenditure was primarily due to the development of a warehouse for an existing
    customer in Germany (€8 million), with the remainder being attributed
    to expenditure to support the business growth in North America and Australia. Net cash used in financing
    activitiesDebt financing activities resulted in a net cash inflow of
    €19 million. This was mainly a result of financing proceeds of €55
    million consisting mainly of proceeds from inter-company funding of €52
    million and a €3 million income from finance leases. Total repayments
    of €12 million resulted from scheduled repayments onfinance
    leases of €12 million. In 2004 long term liabilities also decreased due
    to a decrease in




amounts payable to other
    TNT companies €241 million and a repayment of a long term bank loan of
    €5 million. Liquidity and capital
    resourcesAt 31 December 2005 TNT provided funding for the total amount
    of €1,136 million. The amount consisted of current account facilities
    in various currencies of €1,076 million and loans of €60 million.
    TNT intends, until the business has been disposed of, to continue to provide
    sufficient funding to allow the discontinued logistics business to maintain
    its existing level of operations. Additional funding sources
    for the discontinued logistics business consists of a €222 million Canadian
    dollar denominated syndicated facility, signed in May 2001, at a rate of interest
    of three-month Canadian LIBOR plus a margin of 0.325%. At 31 December 2005,
    the average rate of interest on this facility was 3.11%. This facility is
    reported under other current liabilities. Future investing activities,
    such as capital expenditure additions, will continue to be assessed according
    to TNTs existing approval procedures, with consideration being given
    to the possible impact that such expenditures may have on the requirements
    of potential buyer(s) of the business. Commitments, contingencies
    and guaranteesAs at 31 December 2005, commitments, contingencies and guarantees
    pertaining to our discontinued logistics business amount to €701 million.
    Of this total, €161 million were of a short term nature. Rent and operating lease
    commitments amount to €580 million, of which €123 million are short
    term in nature. Total financial guarantees
    at 31 December 2005 were €114 million, of which €35 million is short
    term in nature. Guarantees amounting to €65 million were issued by TNT
    Logistics Holdings B.V. Guarantees amounting to €23 million mainly issued
    by banks and other financial institutions and secured by TNT N.V. or by TNT
    Logistics Holdings B.V. relate to business obligations under lease contracts,
    custom duty deferment and local credit lines. The €26 million of the
    guarantees as at 31 December 2005 relates to bank guarantees issued locally
    by companies within the operations of the discontinued logistics business. Commitments relating
    to capital expenditures amount to €7 million over the next two years
    and relate to additional warehousing to support new business and improvements
    to existing warehousing premises. €3 million is short term in nature.


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|54 |  | 2005 Annual Report
      and Form 20-F
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| | Chapter
        6
| | -----------------





REPORT



OF THE



SUPERVISORY



BOARD



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|Chapter
      6 | Report of the Supervisory
      Board
|--------------- | -------------------------------------

---

Composition Supervisory
    BoardThe composition of the Supervisory Board was subject to the
    following changes in 2005: Mr. Levy and Mrs. Kampoeri Monnas were appointed
    by the general meeting of shareholders on 7 April 2005 as new members of the
    Supervisory Board. Mr. Hommen was reappointed for another four year term. After the closure of
    the 2005 annual general meeting of shareholders, Mr. Tabaksblat retired as
    chairman and member of the Supervisory Board. Mr. Tabaksblat had been chairman
    of the Supervisory Board since 2001 and a member since 1998. The Supervisory
    Board is greatly indebted to Mr. Tabaksblat for his leadership in the Supervisory
    Board and major contributions to TNT. Mr. Hommen was elected by the Supervisory
    Board as new chairman. At the time of our annual
    general meeting of shareholders on 20 April 2006 the terms of Mr. Cochrane
    and Mr. Stomberg will expire; both are available for reappointment and have
    the support of the central works council. Composition committeesThe following changes in the composition of the committees
    were agreed by the Supervisory Board in May 2005. Mr. Hommen resigned as chairman
    and member of the audit committee and joined the nominations committee as
    chairman and the public affairs committee as a member. Mr. Halberstadt resigned
    from the remuneration committee and joined the audit committee as member.
    Mr. Halberstadt was elected chairman of the public affairs committee. Mr.
    Abrahamsen was elected chairman of the audit committee. Mr. Kok resigned from
    the nominations committee and joined the remuneration committee as a member.
    Mrs. Monnas joined as member of the public affairs committee and remuneration
    committee. Mr. Levy joined the audit committee as a member. For an overview
    of the current composition of the committees, see page 65. InductionThe new members of the Supervisory Board, Mrs. Monnas and Mr.
    Levy, attended a full-day induction programme. Senior management took the
    new members through the strategic, financial, legal and reporting affairs
    of TNT. Several members of the Supervisory Board visited operational sites
    during 2005. Meetings of the Supervisory
    BoardIn 2005 the Supervisory Board held eight meetings with the
    Board of Management and eight meetings with the CEO only, most of which were
    held on the evening preceding the regular meetings. The Supervisory Board
    held three private sessions with no members of the Board of Management present.
    These sessions were held just before or after the regular Supervisory Board
    meetings. 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 one meeting by telephone conference. 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 2005, the
    Supervisory Board discussed our 2004 financial statements and approved the
    2004 full year dividend. The Supervisory Board discussed compliance with the
    best practice provisions of the Dutch corporate governance code, in particular
    severance arrangements of the members of the Board of Management. The Supervisory
    Board adopted amendments to the by-laws of the Supervisory Board with respect
    to the appointment of Supervisory Board members, which followed from the amendments
    to the large company regime, which entered into force on 1 October 2004. In the presence of our
    external auditors, PricewaterhouseCoopers, the Supervisory Board discussed
    in February 2005 the result of the assessment by the Board of Management of
    the structure and operation of our internal risk management and control systems
    pursuant to best practice provision III.1.8 of the Dutch corporate governance
    code. In the same meeting the Supervisory Board approved our first corporate
    social responsibility report. Also approved were the proposed amendments to
    our articles of association, among which the change of the statutory name
    from TPG N.V. to TNT N.V., subject to approval by the general meeting of shareholders
    held in April 2005. In May 2005, the Supervisory
    Board discussed the 2005 first quarter results; in July 2005 the 2005 half-year
    results were discussed. The Supervisory Board also approved the divestiture
    of the majority of the French logistics business in July 2005; in October
    2005 the 2005 third quarter results were discussed. In December 2005 the Supervisory
    Board discussed the 2006 annual operating plan with the Board of Management.
    The Supervisory Board also reviewed the human resource strategy as well as
    the companys management development programme and succession planning. In September 2005, the
    Supervisory Board accepted the resignation of Mr. Haars as the CFO as of 31
    March 2006, and approved his severance arrangement. In December 2005, the
    Supervisory Board announced the intended appointment of Mr. Van Dalen as his
    successor. As from 1 April 2006, Mr. Van Dalen will assume his responsibilities
    as acting CFO. On 20 April 2006 the Supervisory Board will inform the general
    meeting of shareholders about the intended appointment. During the year the Supervisory
    Board discussed various investment opportunities in the express division.
    The Supervisory Board approved the lease of two Boeing 747 aircraft for the
    China-Europe route and the acquisitions of TG+ in Spain and Hoau in China,
    as well as the strategic partnerships with Japan Post and Cosco Group. Following a meeting with
    the Supervisory Board in October 2004, the Board of Management executed a
    thorough review of the strategy of the company. The Supervisory Board allocated
    considerable time in its meetings in March, April, May, June, July, October,
    November and December 2005 to discuss the outcomes of the strategic review
    and to analyse various strategic scenarios and options. The review and


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|56 |  | 2005 Annual Report
      and Form 20-F
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|Report
        of the Supervisory Board | Chapter
        6
|--------------------------------------- | -----------------

---

subsequent discussions
    between the Board of Management and the Supervisory Board led to a refined
    strategy, approved by the Supervisory Board in December 2005, which was announced
    on 6 December 2005. The refined strategy encompassed focus on the core competency
    of providing delivery services by managing transport networks like mail, express
    and freight management, the intended divestment of the logistics business
    and a more optimal capital structure. In its December 2005
    meeting, the Supervisory Board evaluated its own performance, working methods,
    and procedures as well as those of its committees. Also the profile, composition
    and competence of the Supervisory Board were reviewed. The Supervisory Board
    reviewed the performance of the Board of Management and its individual members.
    In his absence, the performance of the CEO was discussed. Meetings of the committeesIn 2005, the audit committee met 10 times and held one meeting
    by telephone conference. 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 our 2004 annual results and the 2005
    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. In
    addition, it reviewed our internal control mechanisms and risk management
    processes and was regularly updated about the progress of implementation of
    the requirements under Section 404 of the Sarbanes-Oxley Act. Regular updates
    were given on integrity matters. The results of an internal survey about the
    functioning of our external auditors were reviewed and the audit fee proposal
    for 2005 was approved. In the first half of
    the year, the audit committee devoted considerable time to discuss our tax
    risk profile and was updated on a regular basis about the status of the implementation
    of the remedial actions announced in March 2004, such as a review of the tax,
    finance and legal functions. As previously disclosed, we have been preparing
    an addendum to the report, submitted in August 2004, to the UK Inland Revenue,
    covering other UK tax matters not addressed in the original report and 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 took responsibility for overseeing these investigations
    and retained an independent law firm to assist in conducting a full, independent
    investigation and appointed Mr. Kooijman and Mr. Van der Kinderen to lead
    the work on their behalf. Since then, various meetings were convened to discuss
    the progress and conclusions of these investigations.




The audit committee and
    Supervisory Board have received the report of the audit committees independent
    counsel, with respect to its 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, is not in doubt. The independent counsel,
    the audit committee and the Supervisory Board discussed several remedial recommendations
    of 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 independent counsel on the results of the investigation, including staffing
    assessments and the remedial recommendations. TNTs external auditor,
    PricewaterhouseCoopers Accountants N.V., has also been briefed on the investigation
    in detail by the independent counsel. PricewaterhouseCoopers subsequently
    discussed those results with the audit committee and Supervisory Board and
    supports the remedial actions. The Board of Management endorses the remedial
    actions and has committed to swiftly implement them. In
        2005, the remuneration committee held five meetings including two meetings
        held by telephone conference. The remuneration committee discussed amendments
        to the remuneration policy for the Board of Management. Mission-related
        targets were added to the short term incentive scheme and option grants
        were replaced by performance share grants in the long term incentive scheme.
        Both proposals were endorsed by the Supervisory Board and adopted by the
        annual general meeting of shareholders held on 7 April 2005. Additional
        matters dealt with were, among others:
      the
        proposed redesign of the pension provisions for the Dutch members of the
        Board of Management,
      the
        severance arrangement of Mr. Haars,
      the
        employment contract with Mr. Van Dalen, and
      compliance
        with the Dutch corporate governance code.The
        nominations committee held two meetings in 2005. In February 2005, the
        committee discussed the succession of Mr. Tabaksblat as chairman of the
        Supervisory Board; in October 2005, the Supervisory Board profile, composition
        of the Supervisory Board and potential candidates for the successor of
        the CFO, Mr. Haars, were discussed. A search for a new member of the Supervisory
        Board with experience in Asia was initiated at the end of 2005.The
        public affairs committee met four times in 2005. The committee reviewed
        and discussed stakeholder analysis in relation to various strategic scenarios.
        Also the companys corporate sustainability strategy, postal regulatory
        developments and the status of European postal liberalisation were discussed.


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        Annual Report and Form 20-F |  | 57
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|Chapter
      6 | Report of the Supervisory
      Board
|--------------- | -------------------------------------

---

Each
  committee reported its findings and conclusions on a regular basis, both verbally
  and in writing, to the full Supervisory Board. Data as mentioned in article
    142 (3), book 2 of the Dutch Civil Code can be found in the enclosed agenda
    for the annual general meeting of shareholders to be held on 20 April 2006.
    In addition, each Supervisory Board members year of birth, current and
    former positions, number of shares held and other supervisory board memberships
    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 Board
        The 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):
      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.Compliance
        The Supervisory Board confirms that there were no decisions in 2005 by
        the Supervisory Board not to comply with its by-laws. Remuneration policy
    For the remuneration policy for members of the Board of Management see chapter
    9; for the remuneration of members of the Board of Management and the Supervisory
    Board over 2005, see note 19 to the consolidated financial statements.




Financial statementsThis annual report and the 2005 consolidated financial statements,
    audited by PricewaterhouseCoopers Accountants N.V., were presented to the
    Supervisory Board in its meeting of 24 February 2006 in the presence of the
    Board of Management and the external auditor. PricewaterhouseCoopers
    report can be found on page 111. The Supervisory Board
    recommends that the general meeting of shareholders adopts the 2005 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 184. Subject to adoption of
    the financial statements, a final dividend of €0.41 per ordinary share
    of €0.48 nominal value will be paid in respect of the 2005 financial
    year. An interim dividend of €0.22 has already been paid in 2005, so
    the total dividend per ordinary share in respect of 2005 will be €0.63. Finally, the Supervisory
    Board wishes to thank the Board of Management and all employees of TNT for
    their contributions in 2005.  Supervisory Board
    Amsterdam, 24 February 2006




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Chapter 7



CORPORATE



GOVERNANCE





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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 five members: a chief executive
    officer, a chief financial officer and three group managing directors. The
    management from each of our divisions is responsible for the day-to-day business
    decisions in conjunction with the divisional management boards and for the
    development and execution of business strategy of that 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, except for China where we currently operate as one
    unit. 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 supervision of distinct business activities,
    and our corporate legal structure has largely been brought in line with our
    reporting structure. Responsibility for implementing and ensuring the continued
    effectiveness of business controls lies with management. The success of these
    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 and corporate audit services
    report on the strength of financial processes and internal controls to the
    Board of Management and the audit committee of the Supervisory Board. The Board of Management
    performs its activities under the supervision 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. 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. Members of the Board of
    Management are appointed and can be suspended or dismissed by the Supervisory
    Board. 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
    assists our Board of Management to ensure that our disclosures in all filed
    reports are accurate, complete, timely, understandable and that they fairly
    present the condition of the company in all material respects. The terms of
    reference of the disclosure committee can be viewed on our website, but do
    not form part of this report. The ethics committee is
    to ensure full compliance with our TNT Business Principles, our whistleblower
    policy and procedure, our fraud prevention procedure and other internal procedures.
    The ethics committee reports on a monthly basis to our Board of Management,
    on a quarterly basis to the audit committee and to the chairman of the Supervisory
    Board when required or requested. The terms of reference of the ethics committee
    can be viewed on our website, but do not form part of this report. REMUNERATIONFor detailed information concerning the remuneration of our Board of Management,
    see the remuneration report in chapter9. The remuneration report,
    which includes the remuneration policy for our Board of Management, can also
    be viewed on our website. The information on this website does not form part
    of this annual report. The remuneration policy was initially adopted by the
    annual general meeting of shareholders on 7 April 2004. At the annual general
    meeting of shareholders, which took place on 7 April 2005, the following proposals
    to change certain aspects of the remuneration policy were adopted: 
      the
        introduction of non-financial performance measures for our short term
        incentive plan to support sustainable performance and to ensure that we
        are accountable for our role in society, and




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
      the conversion
        from granting options to performance shares to better align the reward
        of the members of the Board of Management with the creation of shareholder
        value and to strengthen the commitment of executives to the company and
        its objectives. 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.


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| | BOARD OF MANAGEMENT
        M.P. Bakker(1961)CEO
        Peter Bakker has been chief executive officer (CEO) since 1 November 2001,
        on which date he succeeded Ad Scheepbouwer. He joined Royal TPG 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
        TPG Post in 1996 and became a member of the Board of Management of TPG
        Post in 1997. Since the demerger of TPG N.V. from Koninklijke PTT Nederland
        N.V. until his appointment as CEO, he was chief financial officer and
        a member of the TPG Board of Management. Before joining TPG Post, Mr.
        Bakker worked for TS Seeds Holdings. Shares owned: 18,565.
      J.G.
        Haars(1951)
      CFO
      Jan
        Haars has been chief financial officer (CFO) and a member of the Board
        of Management since 1 August 2002. Mr. Haars succeeded Mr. Bakker, who
        was appointed chief executive officer of TPG from 1 November 2001. Before
        joining the company, Mr. Haars worked for ABN AMRO Bank N.V., Thyssen
        Bornemisza Group, Royal Boskalis Westminster N.V., Rabobank Nederland
        and most recently he worked for Unilever N.V., as worldwide group treasurer.
      On 19 September 2005,
        TNT announced that the company and Mr. Haars had amicably agreed upon
        his resignation as statutory director and CFO. Mr. Haars will resign as
        per 31 March 2006. 
        Shares owned: 15,784. |  | H.M. Koorstra(1951)
      Group
        managing director mail
      Harry Koorstra has
        been group managing director mail and a member of the Board of Management
        since 1 July 2000. He joined TPG 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 the Netherlands largest publisher, VNU N.V., most
        recently as general director of its Admedia/VNU Magazine Group. 
        Shares owned: 15,924
      D.G. Kulik(1948)
      Group
        managing director logistics
      David
        Kulik has been group managing director logistics and member of the Board
        of Management since 1 September 2003. As group managing director logistics
        he is responsible for all our global logistics activities. Mr. Kulik joined
        us in 2000 as managing director of TNT Logistics North America. Before
        joining the company, Mr. Kulik was president and chief executive officer
        of CTI Logistx Inc. since 1994. He had been employed by the parent company
        CSX Corporation since 1988.
        Mr. Kulik will resign
          as member of our Board of Management upon the sale of logistics.Shares
          owned: 11,059.
      M.C.
        Lombard(1958)
      Group
        managing director express
      Marie-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
        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: 4,597.
      The business address
        of all members of the Board of Management is TNT N.V., Neptunusstraat
        41-63, Hoofddorp, 2132 JA, the Netherlands. | 
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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. Koorstra is a member 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). Mr.
    Kulik is a member of the business advisory board of the University of North
    Florida (part of the university system owned and operated by the State of
    Florida). The members of our Board
    of Management have no board positions other than those reflected above. On 6 December 2005 we
    announced the intended sale of logistics. Mr. Kulik will resign as member
    of the Board of Management upon the sale of logistics. On 16 December 2005 we
    announced the intended appointment by the Supervisory Board of Mr. H. van
    Dalen (1952) as CFO and member of our Board of Management. Mr. Van Dalen is
    currently a member of the managing board and CFO of Royal DSM N.V. Mr. Van
    Dalen will assume the position of acting CFO as of 1 April 2006 until the
    annual general meeting of shareholders to be held on 20 April 2006 has been
    informed of the intended appointment. The total number of ordinary
    shares held by members of the Board of Management is 65,929, amounting to
    approximately 0.01% of the outstanding share capital. 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 adopt 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, its affiliated businesses, and shall take into account the
    relevant interest of the companys stakeholders, and, to that end, considering
    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.




EXPERTISE AND COMPOSITION
    OF THE SUPERVISORY BOARDThe Supervisory Board consists of a minimum of seven and a
    maximum of 12 members. At present, our Supervisory Board has nine members.
    Share ownership is not required to qualify as a member of the Supervisory
    Board. 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 upon adoption 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 and the by-laws of the Supervisory Board 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.
    The rotation plan can be viewed on our website. 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. Each member of our Supervisory Board holding more than five
    such board memberships has committed himself to reduce his number of board
    memberships to a maximum of five in due course. No new member of our Supervisory
    Board who holds more than five such board memberships will be appointed. The Supervisory Board
    and Mr. Hommen acknowledged that the election of Mr. Hommen as chairman in
    April 2005 was not fully in compliance with the Dutch corporate governance
    code as his total supervisory board memberships number amounted to six. However
    the Supervisory Board felt that this election was caused by unforeseen circumstances
    and was pleased that Mr. Hommen accepted the important position. Mr. Hommen
    will resolve this non-compliance. There is an agreed procedure
    for members of the Supervisory Board to take independent professional advice
    at the companys expense, if so required. For a description of
    our Supervisory Boards activities in 2005, see the report of the Supervisory
    Board in chapter 6. The by-laws of the Supervisory
    Board can be viewed on our website, together with other information with respect
    to each member of our Supervisory Board.




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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 being assisted by a deputy
    corporate secretary. For 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 annually reviews and reassesses the adequacy
    of its terms of reference as established by the Supervisory Board. The audit
    committee is charged with assisting the Supervisory Board in advising on and
    monitoring, inter alia, the integrity of our financial statements, 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s
    terms of reference require it to consist 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 was appointed by the Supervisory
    Board to propose a remuneration policy for members of the Board of Management
    and to propose the remuneration of the individual members of the Board of
    Management, both for adoption by the Supervisory Board, and to draft a proposal
    for the remuneration of the individual members of the Supervisory Board for
    adoption by the general meeting of shareholders. Furthermore, the remuneration
    committee prepares the allocation of management options and rights to shares
    in the companys capital to other senior management of the company by
    the Supervisory Board. 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. 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
    and the public affairs department in formulating and developing our public
    affairs policy, in particular for our mail division and for the implementation
    and tactical elaboration of its policy. The public affairs committee monitors
    the effectiveness of our public affairs policy and the implementation thereof
    by our public affairs department.


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|Corporate
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ADDITIONAL SUPERVISORY
    BOARD INFORMATION






|                  |             |                   |                      |                                         
|----------------- | ----------- | ----------------- | -------------------- | ----------------------------------------
|                  | Nationality | Appointed         | Term
        expires | Committee
        membership            
|                  |             |                   |                      |                                         
|J.H.M. Hommen     | Dutch       | June
        1998 | 2009                 | Nominations, Public
      Affairs       
|                  |             |                   |                      |                                         
|R.J.N. Abrahamsen | Dutch       | May 2000          | 2008                 | Audit, Nominations                      
|                  |             |                   |                      |                                         
|J.M.T. Cochrane   | British     | June 1998         | 2006                 | Remuneration                            
|                  |             |                   |                      |                                         
|R. Dahan          | Dutch       | April 2003        | 2007                 | Audit                                   
|                  |             |                   |                      |                                         
|V. Halberstadt    | Dutch       | June 1998         | 2007                 | Audit, Nominations,
      Public Affairs
|                  |             |                   |                      |                                         
|W. Kok            | Dutch       | April 2003        | 2007                 | Remuneration, Public
      Affairs      
|                  |             |                   |                      |                                         
|S. Levy           | French      | April 2005        | 2009                 | Audit                                   
|                  |             |                   |                      |                                         
|G. Monnas         | Greek       | April 2005        | 2009                 | Remuneration, Public
      Affairs      
|                  |             |                   |                      |                                         
|R.W.H. Stomberg   | German      | June 1998         | 2006                 | Remuneration, Nominations               
|                 



SUPERVISORY
        BOARDJ.H.M. Hommen
        (1943)
        Mr. Hommen is chairman of the Supervisory Board. Mr. Hommen was appointed
        as a member of the Supervisory Board by the Minister of Transport, Public
        Works and Water Management on 28 June 1998. He was reappointed for a period
        of four years by the Minister of Transport, Public Works and Water Management
        in 2001. He was again reappointed for another four years by the general
        meeting of shareholders on 7 April 2005. His term 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 Aluminum Company of America (Alcoa).
        He is a member of the supervisory boards of Royal Ahold N.V. and ING Group
        N.V., chairman of the supervisory boards of Reed Elsevier, Tias Business
        School, the Academisch Ziekenhuis Maastricht and chairman of the board
        of directors of MedQuist, USA.
        Shares owned: 0.R.J.N. Abrahamsen(1938)
        Mr. Abrahamsen was appointed as a member of the Supervisory Board by the
        Minister of Transport, Public Works and Water Management on 9 May 2000.
        He was reappointed for four years after the annual general meeting of
        shareholders held in 2004. 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 and Vitens N.V. 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.
          Cochrane(1944)
          Mr. Cochrane has been 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 for four years after the annual
          general meeting of shareholders held in 2002. His term expires in 2006.
          Mr. Cochrane will be nominated for reappointment in the annual general
          meeting of shareholders to be held on 20 April 2006. Mr. Cochrane is
          chairman of Avidex Ltd. and chairman of SW London Strategic Health Authority.
          He is a former director of Glaxo Wellcome plc, responsible for international
          operations, and a former executive director of Glaxo Wellcome.
          Shares owned: 0.R. Dahan(1941)
        Mr. Dahan was appointed as a member of the Supervisory Board on 1 April
        2003. His term expires in 2007. Mr. Dahan is chairman of the supervisory
        board of Royal Ahold N.V., a member of the supervisory boards of VNU N.V.
        and 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. Halberstadt(1939)
        Mr. Halberstadt was appointed as a member of the Supervisory Board on
        28 June 1998 and reappointed in 1999 and in 2003. His term expires in
        2007. 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.


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W. Kok(1938)
        Mr. Kok was appointed as a member of the Supervisory Board on 1 April
        2003. His term expires in 2007. Mr. Kok is member of the supervisory boards
        of Royal Dutch Shell plc., ING Group N.V. and KLM Royal Dutch Airlines
        N.V. Mr. Kok was formerly Prime Minister of the Netherlands, Minister
        of Finance, member of parliament, chairman of the Confederation of Dutch
        Trade Unions and the European Trade Union Confederation.
        Shares owned: 0.S. 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 Finance, Renault Spain, Safran, Segula Technologies
        and Aegon N.V. Formerly Mr. Levy was executive vice-president and chief
        financial officer of Renault Group.
        Shares owned: 0.G.
        Monnas(1955)
        Mrs. Monnas was appointed as a member of the Supervisory Board on 7 April
        2005. Her term expires in 2009. 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. Furthermore Mrs. Monnas was urban development consultant for the
        Greek Ministry of Economic Affairs. Mrs. Monnas has been nominated for
        appointment as member of the supervisory board of Randstad Holding N.V.
        in May 2006.
        Shares owned: 0.R.W.H. Stomberg(1940)
        Mr. Stomberg was appointed as a member of the Supervisory Board on 28
        June 1998. He was reappointed for four years after the annual general
        meeting of shareholders held in 2002. His term expires in 2006. Mr. Stomberg
        will be nominated for reappointment in the annual general meeting of shareholders
        to be held on 20 April 2006. Mr. Stomberg is chairman of Management Consulting
        Group plc and a non-executive director of Smith & Nephew plc, Reed
        Elsevier N.V. and Reed Elsevier plc. Mr. Stomberg is also a member of
        the supervisory board of Deutsche BP AG, chairman of the advisory board
        of Hoyer GmbH in Hamburg and chairman of the supervisory board of Lanxess
        AG in Leverkusen. Mr. Stomberg was formerly a managing director of British
        Petroleum Company plc, the chief executive of BP Oil International, chairman
        of John Mowlem & Co plc and chairman of Unipoly S.A. 
        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.




GOVERNANCE AND CONTROL LARGE COMPANY REGIMEPursuant to the Enabling Act, we are subject to the fulllarge
    company regime, which was amended effective as per 1 October 2004. See for
    more information on the large company regime chapter 14. In March 2001, the State
    of the Netherlands expressed the intention to introduce legislation to amend
    the Enabling Act, with the effect that the large company regime as provided
    for in articles 152 through 164, book 2 of the Dutch Civil Code would apply
    to us as it applies to all other large companies. If such legislation is introduced,
    we may be able to use the full or partial exemption to the large company regime.
    Such legislation has not been introduced yet. Under Dutch law, the powers
    vested in a supervisory board vary, according to whether a company is subject
    to (i) the full large company regime, (ii) the partially exempt large company
    regime, or (iii) the fully exempt large company regime. If a company is subject
    to the full large company regime, the company must have a two-tier management
    structure, including a supervisory board with broadened powers. The supervisory
    board has the right to nominate members of the supervisory board for appointment
    by the general meeting of shareholders. The supervisory board has the power
    to appoint and dismiss members of the board of management. 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. Certain resolutions of the board of management are subject
    to the approval of the supervisory board. If a company is partially exempt
    from the large company regime, certain of these broadened powers remain vested
    in the supervisory board. However, shareholders then have the power to appoint
    and dismiss members of the board of management. If a company is fully exempt
    from the large company regime, no statutory powers as described in this paragraph
    are vested in the supervisory board. DUTCH CORPORATE GOVERNANCE
    CODEWe fully comply with the Dutch corporate governance codeby applying
    its principles and best practice provisions that are applicable to the Board
    of Management and the Supervisory Board or by explaining why we deviate therefrom.
    We fully apply such principles and best practice provisions, with the exception
    of the following best practice provisions that are not fully applied: 
      provision II.2.7:
        maximum remuneration in the event ofdismissal
        of members of the Board of Management. Seechapter
        9, page 81, and
      provision III.3.4:
        maximum number of Supervisory Boardpositions
        held by members of the Supervisory Board withDutch
        listed companies. See chapter 7, page 63.




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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, group.tnt.com.
    The information on our website, however, does not form part of this annual
    report. 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. NEW YORK STOCK EXCHANGE
    CORPORATE GOVERNANCE RULESWe 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 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 below on page
    70, in accordance with Dutch law, our external auditor is appointed by the
    general meeting of shareholders and not by our audit committee, although 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. THE FOUNDATION PROTECTION
    TNT AND PREFERENCE SHARES BStichting Bescherming TNT (the 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. Our articles of association
    provide for protective preference shares B that can be issued to the Foundation
    Protection TNT. 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 Protection TNT for the placement to or acquisition by the Foundation
    Protection TNT of preference shares B under certain circumstances. These agreements
    have been entered into to prevent, delay or complicate attempts at an unsolicited
    takeover, including transactions in which shareholders might otherwise receive
    a premium for their shares over then current market prices. The preference
    shares B may only be issued to serve these interests. 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 Protection TNT) with the Foundation Protection TNT, subject
    to the Foundation Protection TNTs ability to pay the purchase price.
    The Foundation Protection TNT has renewed its credit facility agreements in
    2004 to be able to pay the purchase price. In addition, the Foundation Protection
    TNT has a call option to acquire a number of preference shares B not exceeding
    the total issued amount of ordinary shares and the special share, minus one
    and minus any shares already issued to the Foundation Protection TNT. 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 would
    not be required to be paid by the Foundation Protection TNT until we made
    a call for payment by resolution of our Board of Management, which resolution
    would be subject to the approval of the Supervisory Board. Beginning two years after
    the date of issuance of any preference shares B to the Foundation Protection
    TNT for the first time, the Foundation Protection TNT would have the




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right to demand that
    we propose to our general meeting of shareholders that those preference shares
    B be cancelled and the paid up amount returned to the Foundation Protection
    TNT. This would occur upon approval of the general meeting of shareholders.
    The Foundation Protection TNT could make this demand earlier if it had received
    a demand for the repayment of the funds under the credit arrangement it has
    arranged in order to make payments on the preference shares B. The independent members
    of the board of the Foundation Protection TNT 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 Protection TNT, we share the view that the Foundation
    Protection TNT is independent in the sense referred to in Annex X to the General
    Rules, (Algemeen Reglement) Euronext Amsterdam Stock Market. The preference shares
    B are the only anti-takeover measure as described in Annex X to the General
    Rules, (Algemeen Reglement) Euronext Amsterdam Stock Market. In the
    event of a takeover attempt which by our Board of Management and the Supervisory
    Board is not considered to be in the interest of the company, the business
    connected with it and all appropriate interests associated with the company,
    we may initiate such actions as we may deem appropriate within the boundaries
    of Dutch law to preserve the long term interests of the company, the business
    connected with it and all appropriate interests associated with the company. CONTROLS AND PROCEDURESIndependent
    counsel investigation into illegal acts.We refer to
    chapter 6, page 57, for the information in respect of the independent counsel
    investigation into illegal acts and remedial actions to be taken in this respect. Internal risk management
    and control systemsOur Board of Management
    is responsible for our system of internal risk management and controls and
    for reviewing their operational effectiveness. The internal risk management
    and control systems are designed to identify significant risks and to assist
    us in managing the risks that could prevent us from achieving our objectives,
    but cannot provide absolute assurance against material misstatements, fraud
    and violations of laws and regulations. Nevertheless, because of their inherent
    limitations, the control systems described below, as well as those in the
    two following sections may not prevent or detect all misstatements, inaccuracies,
    errors, fraud or non-compliance with law and regulations, neither can they
    provide certainty as to the achievement of our objectives. Our internal risk management
    and control systems were designed based on the Committee of Sponsoring Organisations
    of the Treadway Commission (COSO) internal control framework. These processes
    encompass 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. The Board of Management
    has reviewed, analysed and prioritised the risks to which we are exposed and
    has reviewed our control environment for the year ended 31 December 2005.
    The outcome of this review and analysis has been shared with the audit committee
    and the full Supervisory Board and has been discussed with our external auditors.
    Our current key risks are summarised in chapter 10. As disclosed in chapter
    6 of our 2004 annual report, in 2004 we became aware that there were some
    functions where our internal risk management and control systems could be
    improved. We believe that we are taking adequate steps to strengthen our internal
    risk management and control systems in these functions. The need to further
    strengthen controls and procedures and financial and tax staffing was reconfirmed
    in the investigations of the audit committee. See chapter 6, page 57 for more
    information. We are continually reviewing
    and improving our system of internal control over financial reporting in view
    of our upcoming obligations under Section 404 of the Sarbanes-Oxley Act and
    related regulations. We do not imply an assessment of the adequacy and effectiveness
    of our internal control and risk management processes over financial reporting
    under Section 404 of the Sarbanes-Oxley Act, as the SEC has indicated that
    this will only be required for the year ended 31 December 2006. We have taken
    advantage of the SEC extension for foreign issuers and have used the extra
    time to further strengthen our control environment. Over the period covered
    by this annual report we have not identified any control issues that would
    be classified as a material weakness. We have, however, identified some significant
    control deficiencies, which in our view do not have a material impact on our
    financial results. The first category of
    significant control deficiencies relates to our entity-level control framework
    and US GAAP knowledge in our local business entities. These significant control
    deficiencies remain although we have made progress in improving our entity-level
    control framework, which now addresses all of the softer COSO components,
    and is expected to be finalised and rolled outby 31 March 2006. In addition we continue to strive for improved US GAAP knowledge
    and expertise throughout the company. The second category of
    significant control deficiencies relate to our financial reporting on tax.
    We have made significant progress in this area in the past year and have implemented
    several key controls. Specifically, we have implemented mandatory tax questionnaires,
    a tax risk register and corresponding risk mitigation action plans, and we
    have




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reviewed, adopted and
    communicated internally our revised taxation strategy and related guidance.
    For the most important countries in which we operate we have assigned a senior
    finance staff member with direct responsibility for all taxation matters.
    Nevertheless, we acknowledge that some of these controls need to be further
    embedded, especially in our local business entities. The third category of
    significant deficiencies relates to our controls within and around the use
    of electronic template, which directly relate to the creation, monitoring
    and review of our financial statements. In particular, we currently are implementing
    controls to mitigate the risk of error resulting from the use of critical
    spreadsheets. In late 2005, we commissioned
    a review by external counsel into our integrity and ethical controls and procedures.
    A comprehensive report was made, and the Board of Management is implementing
    its recommendations under the supervision of our audit committee. We created
    two new positions in 2005: Group Legal Director and General Counsel, and Group
    Director Integrity and Security. Controls under these two new functions are
    being refined and documented as part of our work to achieve Section 404 compliance. Our external auditors
    are obligated under the standards of the Public Companies 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 with our auditors
    and are in agreement with them on the significant deficiencies to be remediated
    in 2006. Disclosure controls
    and proceduresAs of the end of the period
    covered by this annual report, 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
    that our disclosure controls and procedures should be strengthened. The remedial
    actions described above are intended to strengthen our disclosure controls
    and procedures. Section II.1.4 of
    the Dutch corporate governance code taking into account the recommendation
    of the corporate governance code monitoring committee on the application thereof.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. For purpose of compliance
    with the Dutch corporate governance code taking into account the recommendation
    of




the Dutch corporate governance
    code monitoring committee, to the best of its knowledge, the Board of Management
    believes that our internal risk management and control systems provide a reasonable
    level of assurance that: 
      our
        financial reporting does not contain material inaccuracies;
      our
        risk management and control systems have operated effectively in the year
        2005, noted that there are areas where significant deficiencies as described
        above were identified and adequate remedial actions have been taken in
        this respect, and
      there
        are no indications, considering the attention given to the strengthening
        of our internal control over financial reporting and disclosure control
        and procedures in general and specifically in respect to tax-related matters,
        that our risk management and control systems will not operate properly
        in the current year. We refer to the paragraph
    above Internal risk management and control systems for a description
    of significant control, our planned improvements and cautionary language regarding
    the inherent limitations in control. In addition, the above statement regarding
    internal risk management and control systems does not imply an assessment
    on the adequacy and effectiveness of our internal control over the financial
    reporting under Section 404 of the Sarbanes-Oxley Act. CONFLICTS OF INTEREST/RELATED
    PARTY TRANSACTIONSThe 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. 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) about 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 any conflict 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. 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




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significance to the company
    or to the relevant member of the Board of Management or of the Supervisory
    Board 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 nottake 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. The State of the Netherlands
    is our largest shareholder, holding approximately 10% of our ordinary shares.
    In view of the transactions that we may enter into with the State of the Netherlands
    and any of its instrumentalities, the by-laws of the Board of Management provide
    that any such transaction shall not be deemed to be of material significance
    below a threshold of €22.5 million. Transactions with these parties above
    this threshold require the approval of our Supervisory Board. All transactions
    between us and the State of the Netherlands and any of its instrumentalities
    are required to be agreed on terms that are customary in the sector concerned. BUSINESS PRINCIPLES
    AND WHISTLEBLOWER POLICYOur code of ethics, called the TNT Business Principles, including
    the TNT Whistleblower Policy, is described in chapter 8. The TNT Business
    Principles, the TNT Whistleblower Policy and the TNT Whistleblower Procedure
    can be viewed on our website. 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 required to be 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 performed for us by the external auditor. Conflicts of interest
    and potential conflicts of interest between the external auditor and the company
    are resolved in accordance with the terms of reference of the audit committee
    and in particular the following annexes thereto: the TNT policy on auditor
    independence and the TNT audit committee audit, audit-related, and non-audit
    services pre-approval policy, which can both be viewed on our website.




We at times use our external
    auditor to provide services in cases where these services do not conflict
    with the external auditors independence. To maintain our external auditors
    independence and to comply with applicable law and regulation, 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 determinations, 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 is required to pre-approve all audit and audit related services,
    and permitted non-audit services (including the fees and terms thereof) to
    be performed for us by the external auditor and did so for all services in
    2005, except for some which in aggregate amount to around 3% of the total
    amount paid to the external auditor. The audit committee requires a formal
    written statement from the external auditor describing all relationships between
    the external auditor and the company. 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 last
    assessment was held in 2004. The main conclusions of this assessment are required
    to be communicated to the general meeting of shareholders. Internal auditors are
    required to operate under the responsibility of our Board of Management subject
    to monitoring of our internal audit function 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 auditors. The independent external
    auditor is required to attend the meetings of the Supervisory Board at which
    the report of the external auditor with respect to the audit of the financial
    statements is discussed and at which the approval of the financial statements
    is determined. See note 21 to the consolidated
    financial statements for the fees paid to PricewaterhouseCoopers Accountants
    N.V. and the distribution of the fees between audit related services and non-audit
    services.








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Chapter 8



BUSINESS



PRINCIPLES



AND SOCIAL



RESPONSIBILITY





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Below are our revised
    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.




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|Chapter
        8 | Business
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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 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 group.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 Procedure at group.tnt. com. TNTS SOCIAL
    RESPONSIBILITY POLICY Our 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 people realise their potential and 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 therefore implement a series of standardised management systems
    across the group. We also subscribe to the United Nations Global Compact,
    which embraces, supports and enacts a wide range of values in human rights,
    employment standards and the environment.




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|Business
        principles and social responsibility | Chapter
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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. This initiative is aimed at improving
    the transparency of the social responsibility performance of logistics and
    transport companies. In 2005, we entered the
    Dow Jones Sustainability Index as leader of the industrial transportation
    industry. Until 2007, we are strongly
    focused on integrating a range of international standards throughout the group.
    To allow comparison between ourselves and other companies, and to demonstrate
    our progress, we set annual targets for our social responsibility performance.
    We made clear progress in 2005, meeting or even exceeding our objective in
    most areas. For details of individual targets, please refer to our 2005 social
    responsibility report. 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 beginning to clean up our fleet
    by 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, will
    be launched and implemented starting in 2006. We reflect our progress
    and future plans in our 2005 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 2005 social responsibility
    report, although not part of this report, can be viewed on our website group.tnt.com. PARTNERSHIP WITH UNITED
    NATIONS WORLD FOOD PROGRAMMEIn December 2002, the United Nations World Food Programme (WFP)
    and TNT launched a groundbreaking partnership aimed at a single common goal:
    fighting worldhunger.
    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 June 2005, more than
    200,000 TNT and WFP personnel with their friends and families, participated
    for the second time in Walk the World, a sponsored walk encompassing
    over 90 countries. Our partnership with WFP
    consists of three levels of engagement and resulted in the following achievements
    in 2005: 
      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
        €3.6 million in these kind of projects,
      hands-on
        support: providing organisational expertise and assistance in order to
        respond to emergencies more effectively. In 2005 we continued to contribute
        the response to emergencies like the tsunami and the Pakistan earthquake
        by offering transport services, warehousing and specialised personnel
        deployed in direct support of the WFP in the regions. In total four emergency
        flights were carried out in 2005. Total investment in hands-on support,
        including the tsunami response efforts which started in 2004, has been
        over €2 million, and
      advocacy
        & awareness: helping raise awareness and funds for WFP. A total of
        36 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 2005, our employees raised almost €2.2
        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 €3.6
        million. In 2005, we invested a
    total of €9.6 million in the partnership with WFP of which €0.5
    million has been financed by external parties. A total of €8.1 million
    came in the form of in-kind services and knowledge transfer projects and €1.5
    million as a cash donation to a foundation established by our company to support
    WFP School Feeding Programmes.








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Chapter 9



REMUNERATION



REPORT





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|Chapter
        9 | Remuneration
        report
|----------------- | ---------------------------

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INTRODUCTION The remuneration of the
    members of the Board of Management is the responsibility of the Supervisory
    Board. The remuneration policy is adopted by the general meeting of shareholders.
    The remuneration committee is formed 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 for the individual members of
    the Board of Management. 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 2005 the remuneration committee
    comprised Mr. J.M.T. Cochrane (chairman), Mrs. G. Monnas, Mr. W. Kok and Mr.
    R.W.H. Stomberg. None of the members of the remuneration committee is a member
    of the management board of another Dutch listed company and none of the members
    of the remuneration committee is member of the audit committee. During 2005,
    the remuneration committee met five times. The chief executive officer was
    invited for all meetings except the meeting where his own terms or conditions
    were discussed. Our corporate human resources department fulfils the role
    of secretary of the committee. 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, and
      Ernst
        & Young provided tax advice relating to the employment of the US-based
        member of the Board of Management. The advisors do not advise
    the members of the Board of Management on their remuneration. This report sets out the
    policies on the remuneration of the members of the Board of Management and
    the remuneration for the members of the Supervisory Board. For the disclosure
    of the remuneration paid to individual members of the Board of Management
    and the Supervisory Board, see note 19 of the consolidated financial statements.




REMUNERATION OF
    THE SUPERVISORY BOARD The remuneration of the
    members of the Supervisory Board is comprised of a base compensation and a
    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 payments in the event of termination. Supervisory
        Board
      
      Base
        feeChairman
      60,000Member
      45,000Committees
      
      Meeting
        feeAudit & Remuneration
      Chairman
      2,500Member
      1,500Nomination &
        Public Affairs
      Chairman
      1,500Member
      1,000(in €) REMUNERATION POLICY
    FOR THE BOARD OF MANAGEMENT The remuneration policy
    for the members of the Board of Management set forth below is drawn up by
    the Supervisory Board and will be submitted to the annual general meeting
    of shareholders on 20 April 2006 for adoption. OBJECTIVE OF REMUNERATIONThe 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 and to reward them accordingly
    based on performance. 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. Total remuneration is benchmarked against
    the relevant market. REMUNERATION ELEMENTS
    AND MARKET ALIGNMENTThe remuneration for members of our Board of Management consists
    of: a fixed base salary and other periodically paid compensation, a variable
    compensation and pension arrangements. The variable compensation consists
    of: a short term incentive component, a share-matching scheme and a long term
    incentive component. Only the base salary and other periodically paid compensation
    are fixed; all other components are linked to performance.




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Total remuneration is
    set at the median level for total compensation of the European reference market
    for executive directors of multinational companies. The European market is
    defined as the composite market 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. BASE SALARYThe base salary for the members of the Board of Management
    is set at the median level of the European reference market as set out above.
    For the base salary of the members of the Board of Management the remuneration
    level in the country of residence is benchmarked against the average European
    market. If the remuneration level in the country of residence exceeds the
    European market, the base salary is based upon the salary in the reference
    market of the country of residence. OTHER PERIODICALLY
    PAID COMPENSATIONMembers of the Board of Management benefit from other periodically
    paid compensation or benefits in kind. A typical example of a benefit in kind
    is a company car. VARIABLE COMPENSATIONWe consider variable compensation an important part of the
    remuneration package for the members of the Board of Management. The bonus
    targets and performance conditions reflect the key drivers for value creation
    and medium to long term growth in shareholder value. Therefore, approximately
    half of the total compensation of the members of the Board of Management consists
    of variable compensation, depending on performance. The performance challenge
    for the Board of Management is to achieve sustainable performance on both
    the short term and the long term. In addition, the group
    managing director logistics can receive a special additional reward for achieving
    a higher than budgeted performance for logistics, which reward could be reviewed
    considering the intended sale of logistics. Short term incentive:
    cash bonusThe short term incentive for the members of the Board of Management
    consists of the mission related incentive scheme. Our Supervisory Board
    agrees and sets the targets for the mission related incentive plan at the
    beginning of each financial year. The at target bonus level entitles
    a member of the Board of Management to 60% of base salary with an additional
    15% available if the at stretch bonus level is reached. The short term incentive
    scheme for the members of the Board of Management reflects the accountability
    for our mission by rewarding for both financial and non-financial performance
    as required for sustainable results. Therefore financial and non-financial
    targets are set.




The financial targets
    for the chief executive officer and the chief financial officer are set in
    terms of earnings from continuing operations. The 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 of the
    relevant division. Both targets are measured independently and the realisation
    of these targets can independently lead to bonus payments. The non-financial targets
    are related to the elements of our mission that do not directly impact our
    financial performance in the short term but are crucial to the continued success
    of our company in the long term. For each member of the Board of Management
    specific non-financial targets are agreed with the Supervisory Board relating
    to the following elements of our mission: 
      instilling
        pride in our people: continuous improvement in engaging our people, which
        can be measured through employee satisfaction surveys,
      exceeding
        customers expectations: continued improvements in our relations
        with customers, which can be measured through customer satisfaction surveys
        and by assessing the relationship with our customers in person,
      sharing
        responsibility for our world: making a difference to our environment,
        which can be accounted for by our global initiatives as a company such
        as our involvement with the United Nations World Food Programme on a global
        scale and local initiatives to improve the direct environment we live
        in. 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. The at target
    bonus level of 60% of the base salary consists for 80% of reward for achieving
    financial targets and 20% of reward for achieving non-financial targets. The
    financial targets (earnings and economic profit) and the non-financial performance
    are realigned to our refined strategy. The at target level for
    non-financial performance has been lowered from 18% to 12% for all members
    of the Board of Management. The at target level for financial
    performance for the group managing directors has shifted from 30% to 18% for
    the earnings target and from 12% to 30% for the economic profit target.This pay-out reflects the focus on the divisional financial performance in
    2006. The bonus based on earnings
    performance will be calculated using a sliding scale between the at
    minimum target level and the at stretch target level. Below
    the minimum required performance, the bonus for financial performance is zero.The same sliding
    scale between minimum and stretch is also applicable for divisional economic
    profit results.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.




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|Chapter
        9 | Remuneration
        report
|----------------- | ---------------------------

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The bonus as percentage
    of the base salary at different performance levels is set out below:






|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|----------------------- | ----------------------- |  | --------------------------- |  | ---------------------------- |  | ----------------- |  | --------------- |  | ---------------- |  | --------------- | --------------------
|                        | Financial
      targets |  | Non
      financial targets | 
|                        | Earnings
      target   |  |                             |  | Economic
      profit target |  | Total
      range
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|                        | At
      minimum        |  | At target                   |  | At
      stretch             |  | At
      minimum  |  | At
      target |  | At
      stretch |  | At
      target |                     
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|Peter Bakker            | 38%                     |  | 48%                         |  | 63%                          |  |                   |  |                 |  |                  |  | 12%             | 0%
      - 60% - 75%
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|Jan Haars               | 38%                     |  | 48%                         |  | 63%                          |  |                   |  |                 |  |                  |  | 12%             | 0%
      - 60% - 75%
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|Harry Koorstra          | 15%                     |  | 18%                         |  | 22%                          |  | 23%               |  | 30%             |  | 41%              |  | 12%             | 0%
      - 60% - 75%
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|Dave Kulik              | 15%                     |  | 18%                         |  | 22%                          |  | 23%               |  | 30%             |  | 41%              |  | 12%             | 0%
      - 60% - 75%
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|Marie-Christine Lombard | 15%                     |  | 18%                         |  | 22%                          |  | 23%               |  | 30%             |  | 41%              |  | 12%             | 0%
      - 60% - 75%
|                        |                         |  |                             |  |                              |  |                   |  |                 |  |                  |  |                 |                     
|                       

Share-matching
    SchemeAny bonus payable under the short term incentive scheme described
    above will be paid 75% in cash and 25% in our shares at the then current market
    value with an accompanying right on matching 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. Long term incentive:
    performance sharesIn 2005 we replaced our granting of options by granting shares
    under the existing performance share scheme. We consider options to be less
    effective than performance shares in aligning the interest of the Board of
    Management to the interests of the shareholders. Performance shares more accurately
    reflect the share price development that creates value for our shareholder. Under the performance
    share scheme, members of the Board of Management are awarded rights on our
    shares. These rights are exercisable after three years. 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. The total of shares granted
    to the members of the Board of Management under the performance share scheme
    are benchmarked on a yearly basis against market practice using the same reference
    market as described earlier in this chapter. The vesting of performance shares
    is conditional on the achievement after three years of a certain total shareholder
    return compared 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). 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. Under this
    performance schedule 0%-120% of the base allocation of the performance shares
    might vest depending on our relative total shareholder return performance
    during the three financial years starting with the year of grant. During the vesting period,
    the total shareholder return data are compiled by the bank Petercam Nederland
    B.V. based on the information from objective data providers (e.g. Bloomberg)
    and reported quarterly. After the three-year vesting period, the remuneration
    committee will advise the Supervisory Board on the vesting of performance
    shares. Shares granted to our
    Board of Management via our equity schemes 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. PENSION ARRANGEMENTSOur pension 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 policy for the members of the Board
    of Management aims at a retirement age between 60 and 65 and a benefit commensurate
    withbenefits
    for members of the Board of Management of comparable companies in the country
    of residence. 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 recognise the developments
    in the society concerning pensions. We are revising the pension policy for
    our members of the Board of Management to reflect this and to align the policy
    more closely to the existing policy for our employees in the Netherlands under
    the collective labour agreement (CAO).




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|Remuneration
        report | Chapter
        9
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In 2006, we intend, after
    consultation with the individual members of the Board of Management, to move
    the current Dutch members of the Board of Management, as well as any newly
    appointed members, to a career average pension aimed at retirement at 65.
    The current Dutch members are Mr. Bakker and Mr. Koorstra. The new member
    to be appointed to the Board of Management is Mr. Van Dalen as of April 2006. We also recognise that
    members of the Board of Management should be able to plan their retirements.
    If needed, they can contribute additionally to a life time savings account.




TERM OF APPOINTMENT
    AND EMPLOYMENT CONTRACTSThe members of the Board of Management appointed before September
    2003 have been appointed for an indefinite term. New 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 per term. 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 following reappointment plan:


|                                                                                                                  |  |                              |                          |                               |                                      | 
|----------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------------------------ | ----------------------------- | ------------------------------------ | 
|                                                                                                                  |  | Employed
      with us since | Term
      of employment | Year
      of (re)appointment | Eligible
        for (re)appointment | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|Peter Bakker1                                                                                                     |  | 14 October
      1991        | Indefinite               | 2004                          | 2008                                 | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|Jan Haars                                                                                                         |  | 1 August
      2002          | Indefinite               | 2002                          | 20052                                | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|Harry Koorstra                                                                                                    |  | 1 October
      1991         | Indefinite               | 2005                          | 2009                                 | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|Dave Kulik                                                                                                        |  | 4 September
      2000       | Four
      years         | 2003                          | 20073                                | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|Marie-Christine Lombard                                                                                           |  | 15 December
      1999       | Four
      years         | 2004                          | 2008                                 | 
|                                                                                                                  |  |                              |                          |                               |                                      | 
|1 Peter Bakker
      was appointed CFO effective 28 June 1998 and CEO effective 1 November 2001.                 
|2 Jan Haars
      will resign end of March 2006 and Henk van Dalen will be eligible for appointment
      as CFO.
|3 David Kulik
      will resign upon the sale of logistics.                                                      

SEVERANCEIn relation to contracts with members of the Board of Management
    we set the severance payments at one year of the base salary with a maximum
    of two years in the first four-year term if one year is considered unreasonable.
    Contracts entered into prior to 2004 will remain unaltered. For membersof 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. Termination
    arrangements for the members of the Board of Management are as follows:




LOANSWe do not grant loans to any member of our Board of Management
    or Supervisory Board. The loans in connection
    with the grant of share options in 1999 offered to the Board of Management
    to pay the Netherlands tax arising from the grant, are no longer outstanding.
    As a result, no loans to any member of the Board of Management or to any member
    of the Supervisory Board remain outstanding.


|Severance
      arrangements                                                                                                          |                       |                                 |                                             
|------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | ------------------------------- | --------------------------------------------
|                                                                                                                                      | Notice
        period | Compensation
        related to | Other
        severance arrangements        
|                                                                                                                                      |                       | a change
        in control1    |                                             
|                                                                                                                                      |                       |                                 |                                             
|Peter Bakker                                                                                                                          | Six
        months    | Two years compensation         | None                                        
|                                                                                                                                      |                       |                                 |                                             
|Jan Haars                                                                                                                             | Six
        months    | Two
        years compensation | Two years compensation                     
|                                                                                                                                      |                       |                                 |                                             
|Harry Koorstra                                                                                                                        | Six
        months    | Two
        years compensation | None                                        
|                                                                                                                                      |                       |                                 |                                             
|Dave Kulik                                                                                                                            | Six months            | Two years compensation         | Local practice for
      US based salary    
|                                                                                                                                      |                       |                                 | + one year for Dutch
      based salary     
|                                                                                                                                      |                       |                                 |                                             
|Marie-Christine Lombard                                                                                                               | Six months            | Two years compensation         | Local practice for
      France based salary
|                                                                                                                                      |                       |                                 | + one year for Dutch
      based salary     
|                                                                                                                                      |                       |                                 |                                             
|1 Compensation
      is defined as the base compensation, the average bonus over the last three
      years and pension contribution.



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Chapter 10



RISK



FACTORS





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|Chapter
        10 | Risk
        factors
|------------------ | --------------------

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CAUTIONARY
    STATEMENT 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 SEC, 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, the impact
    of regulatory initiatives on our operations, our share of new and existing
    markets, general industry and macro-economic 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 some risk and uncertainty because they relate to events
    and depend on circumstances that will occur in the future. These forward-looking
    statements are based on current expectations, estimates, assessments, forecasts,
    analyses and projections about the industries in which TNT operates, managements
    beliefs and assumptions made about future events and activity. These forward-looking
    statements involve known and unknown risks, uncertainties and other factors,
    many of which are outside of our control that may cause actual results to
    differ materially from any future results expressed in or implied by the forward-looking
    statements. 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 standard, 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,
      loss
        of a strategic customer,
      higher
        costs of or the impossibility to get insurance coverage for future claims
        caused by acts of war, terrorism, sabotage, hijacking 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,
      fluctuations
        in fuel costs,
      our
        ability to increase our fuel surcharge in response to rising fuel prices
        due to competitive pressures,
      changes
        in currency and interest rates in our credit rating and their impact on
        our financing costs and requirements,
      changes
        in our relationship with the State of the Netherlands,
      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
        to the international conventions 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, and disagreements
        with authorities about our interpretations of tax laws,
      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 the Important risk
    factors below, chapter 2, chapter 3, chapter 4, chapter 5 and chapter
    11.


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As a result of these
    and other factors, 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 are neither predictions nor guarantees of future events
    or circumstances. We disclaim any intention or obligation to update or revise
    any forward-looking statements, whether as a result of new information, future
    events or circumstances or otherwise. All subsequent written
    and oral forward-looking statements attributable to us or persons acting on
    our behalf are similarly qualified. IMPORTANT RISK FACTORS You should consider the
    risks and uncertainties described below and other information in this annual
    report 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 2005 represented 39.4% of our group operating revenue and 67.0%
    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-mails 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. In 2004, the Dutch Minister of Economic Affairs published his
    vision on the postal market in the Netherlands. As discussed in greater detail
    in chapter 13, this vision addresses a number of issues that are directly
    relevant to our business,
    including full market liberalisation, price controls and the scope of the
    mandatory postal services. This vision will be the
    basis for a new Dutch Postal Act, which legislation 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 development of this new Dutch Postal Act remains work in progress at the
    Ministry of Economic Affairs and is expected to be discussed in the Dutch
    parliament in 2006. A clear time table for the implementation of this new
    Dutch Postal Act is not yet available and is not expected before April 2007.
    This further liberalisation could adversely affect our revenues and profitability. 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 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 the relatively recent entrance of serious
    competitors and, in the longer term, the continuing liberalisation of the
    Dutch mail regulatory regime. In Europe, we continue to face strong competition
    in our express business. Our mail division strategy focuses on the quality
    of services 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 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. A sustained economic
    downturn or loss of a strategic customer 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
    materialadverse
    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




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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 with plans
    to operate direct services between Europe and China by the end of 2006 and
    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. Increased security
    concerns may result in passenger aircraft no longer carrying our express deliveries.We utilise a variety of transportation options to make our
    express deliveries, including the use of passenger aircraft. Concerns about
    terrorism and the resulting heightened security measures may result in airline
    operators no longer agreeing to carry our express deliveries on their passenger
    aircraft. If this were to happen, we would need to rely on other means to
    effect these deliveries, which may result in a significant cost increase and
    may limit our flexibility in operating our express business. 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 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 expandour
    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 that are effective in the locations where our business is




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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 and any dividends you
    receive.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 and banks and increase
    our financing costs by increasing the interest rates of our outstanding debt
    or the interest rates at whichwe
    are able to refinance existing debt or incur new debt. On 6 December 2005,
    Standard & Poors Ratings Services placed our A long
    term and A-1 short term corporate credit ratings on CreditWatch
    with negative implications and it was indicated that it is likely that the
    ratings will be lowered, potentially




by more than one notch.
    On 6 December 2005, Moodys Investor Services Ltd. downgraded TNTs
    long term rating to A2 from A1 and maintained our
    long term ratings and our P-1 short term rating under review for
    possible further downgrade. The State of the Netherlands
    is our largest shareholder, which may adversely affect the value of your investment.The State of the Netherlands is presently our largest shareholder,
    holding approximately 10% of our outstanding ordinary shares. Future substantial
    sales by the State of the Netherlands of our ordinary shares, or the availability
    of large amounts of our ordinary shares for sale, may adversely affect the
    market price of the shares and the value of your investment. It may also negatively
    affect our ability to raise additional capital by offering new ordinary shares. The State of the Netherlands
    has the right to approve important decisions concerning our business.Besides being our largest shareholder, the State of the Netherlands
    currently has a number of rights under our articles of association and other
    arrangements with us that provides it with significant influence over us.
    For example, the State of the Netherlands has a veto right (see note 31 to
    our consolidated financial statements) over many important decisions concerning
    our business, including decisions about fundamental changes in our business
    and our corporate structure. The State of the Netherlands has committed itself
    to exercise its influence to safeguard its general interest in having an efficiently
    operating Dutch postal system and also to protect its financial interest as
    a shareholder. The interests of the State of the Netherlands may, however,
    differ from the interests of our other investors. Among other things, the
    State of the Netherlands may exercise its rights to delay, deter or prevent
    a potential change of our control or the exercise of influence by another
    large shareholder. The State of the Netherlands substantial ownership
    and the existence of these special rights may discourage bids for our ordinary
    shares by third parties. This could adversely affect the price of our shares
    and the value of your investment. We depend on a number
    of infrastructure facilities for which we have limited or no 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 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 involvesmany
    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


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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. 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 ininfrastructure
    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 60,000 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, most recently our acquisition of TG+, and growth through acquisitions
    remains a key element of our strategy. We have also announced the acquisition
    of several other companies which will be finalised in 2006. 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




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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. 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. 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. In
    particular, several actions are currently pending in France. See chapter 12,
    note 28. 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. The




2004 investigation concluded
    that not all relevant details in connection with these tax matters were adequately
    disclosed to the UK tax authorities and PricewaterhouseCoopers. In addition
    to this investigation, in 2004 our audit committee, with the assistance of
    external legal and tax advisors, conducted a review of other UK tax matters
    that arose from the same period. 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 will cover UK tax matters that were not the
    subject of the original investigation. We are in continuing discussions with
    the UK tax authorities in this connection, but we do not expect that these
    matters will be resolved with the UK tax authorities before the end of 2006. 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,
    and we have determined that no provision or contingent liability is required
    as a result of this investigation, at this time, there can be assurance that
    we will not have additional liabilities in this connection in the future. We have also analysed
    and continue to analyse the tax positions of some of our subsidiaries with
    respect to other countries. Key tax matters under investigation or analysis
    include company residency issues, mainly dating prior to the acquisition of
    TNT Limited, restructuring issues following the acquisition of TNT Limited
    and a variety of transfer pricing matters. We currently estimate
    that the realistic range to reflect our total contingent liability in this
    regard, including potential penalties and interest, is between €150 million
    and €550 million. This estimate involves a series of complex judgments
    about past and future events and relies on estimates and assumptions. Our
    interpretation of past facts and circumstances and relevant tax laws and regulations
    may be open to challenge. Our ultimate liability in connection with these
    matters will depend upon future events and could substantially exceed our
    current estimates. Relevant tax authorities could assess further taxes, penalties
    and interest. 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. Changes
    in tax laws or their interpretation by authorities, and disagreements with
    authorities about our interpretations of tax laws, could adversely affect
    our financial position, results and cash flows.




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We operate globally
    and our earnings are subject to taxation in many jurisdictions at different
    rates. Relevant tax authorities may disagree with our interpretation and application
    in practice of tax laws. We periodically estimate our probable tax obligations
    in the countries in which we conduct our business. If the tax laws change,
    or if there is a successful challenge of our tax position, we will need to
    recognise additional tax liabilities, which may include interest and penalties.
    This would adversely affect our financial position, results and cash flows.
    See notes 23 and 28 to our consolidated financial statements in chapter 12. Our restructurings
    of operations and other measures we take to reduce costs 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. 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 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 andmay
    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. We
    may be unable to comply in a timely manner with the requirements of the Sarbanes-Oxley
    Act relating to the assessment by us of the effectiveness of our internal
    controls over financial reporting, and our assessment may identify material
    weaknesses and may result in an attestation with an adverse opinion from our
    auditors, each of which could adversely affect our reputation and share price.
    Section 404 of the
    Sarbanes-Oxley Act and related regulations will require our management to
    assess the effectiveness of our internal control over financial reporting
    and to report on that assessment in our future annual reports. In addition,
    our external auditor must attest to and report on managements assessment.
    This requirement is currently expected first to apply to our annual report
    on Form 20-F for the year ending 31 December 2006. We have been and still
    are evaluating our internal control systems to allow our management to report
    on, and our auditors to attest to, our internal control over financial reporting.
    As a result, we have incurred additional expenses in 2005 and a diversion
    of our managements time, and we expect this to continue at least into
    the beginning of the year 2007.


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|Risk
        factors | Chapter
        10
|-------------------- | ------------------

---

The decision announced
    on 6 December 2005 to exit the logistics business has affected the potential
    scope of our compliance with Section 404 of the Sarbanes-Oxley Act. It is
    possible that the logistics division will not be sold prior to the 31 December
    2006. The announced sale of any business brings uncertainty and could negatively
    affect the resources dedicated to the implementation of Section 404 compliance. While we have dedicated
    a significant amount of time and resources to ensuring compliance, there can
    be no assurance that we or our auditors will complete the necessary work to
    comply with all aspects of Section 404 and related regulations in a timely
    manner. Although we have
    not to date identified any control deficiencies that could be classified as
    a material weakness, we have identified some significant deficiencies in areas
    such as our entity-level control framework and US GAAP knowledge in our local
    business entities, financial reporting on tax, and the use of electronic templates.
    These are described in chapter 7. Weaknesses in our
    internal controls over financial reporting, may cause us to be unable to prevent
    or detect material misstatements in a timely manner. Any failure to implement
    required new or improved controls, or difficulties encountered in their implementation,
    could harm our operating results or cause us to fail to meet our reporting
    obligations. If the assessment of our internal control over financial reporting
    identifies material weaknesses that must be disclosed, we may receive an attestation
    with an adverse opinion from our auditors as to the adequacy of our internal
    control over financial reporting. Furthermore, potential acquisitions of businesses
    that are currently not in compliance with Section 404 requirements could lead
    to disclosures on currently unforeseen deficiencies in our internal control
    over financial reporting. This could adversely affect our reputation and our
    financial results. Each of these consequences could reduce the markets
    confidence in our financial statements and negatively affect the price of
    our shares. There are numerous
    risks associated with our sale of our discontinued non-network logistics business
    (the discontinued logistics business).On 6 December 2005, we announced our intention to dispose of
    our non-network logistics business. There are numerous risks associated with
    this disposal. All of these may negatively affect our business and financial
    results. WE MAY BE UNABLE TO SELL
    THE DISCONTINUED LOGISTICS BUSINESS OR THE PROCESS MAY BE DELAYED.Our decision to focus our strategy on networks requires us
    to achieve a quick and effective disposal of the discontinued logistics business.
    We may, however, be unable to effect a timely disposal as a result of an inability
    to come to commercially acceptable terms with an interested buyer or discussion
    with work councils. We may have difficulties effecting a disposal as a result
    of change of control provisions in various customer contracts and joint venture
    agreements.




If we do not complete
    the sale in a timely manner, we could face difficulties regarding employee
    retention and relations, business continuity, investment decisions and the
    generation of new business within logistics, restrictions on our ability to
    invest in the remaining business and compliance issues regarding Section 404
    of the Sarbanes-Oxley Act. The discontinued logistics business currently operates
    at a net loss; if the sale is delayed, it is likely we will continue to experience
    losses related to our continued operation of the discontinued logistics business
    until the sale is completed. WE MAY BE FORCED TO RETAIN
    CERTAIN LIABILITIES, OR THEY MAY ADVERSELY AFFECT THE COMMERCIAL TERMS OF
    THE DISPOSAL.The discontinued logistics business has liabilities including
    a €222 million syndicated facility, a put option granted to a minority
    shareholder, Ecotrans, and provisions for pensions and other employee benefits.
    All of these factors may make it difficult to dispose of the business. Even
    if the discontinued logistics business is successfully sold, some or all of
    theseliabilities
    may not be entirely transferable to the buyer, or may negatively impact the
    terms of the disposal. THE SALE OF THE DISCONTINUED
    LOGISTICS BUSINESS MIGHT ADVERSELY AFFECT OUR ABILITY TO RETAIN KEY MANAGEMENT,
    PERSONNEL AND CUSTOMERS.The announcement and consummation of the proposed sale of our
    discontinued logistics business may adversely affect our ability to attract
    and retain key management and personnel for the discontinued logistics business.
    The sale of the discontinued logistics business may result in a loss of customers
    not only in the discontinued logistics business, but also certain customers
    of our mail and express divisions who used these services as a result of our
    ability to provide a global solution. The sale may cause our existing customers
    to terminate or modify their relationships with us and may make it more difficult
    to attract new customer relationships. These difficulties include those that
    may result from potential negative reputational effects from the sale. WE MAY INCUR A FINANCIAL
    LOSS ON THE SALE OF THE DISCONTINUED LOGISTICS BUSINESS.We may not be able to sell the discontinued logistics business
    for a purchase price that reflects the book value of the discontinued logistics
    business, which would result in a loss. We expect to incur significant
    costs related to the sale of our discontinued logistics business. These expenses
    include financial advisory, legal and accounting fees and expenses, employee
    expenses, filing fees, printing expenses and other related charges. We may
    also incur additional unanticipated expenses in connection with the sale transactions.
    A portion of the costs related to the sale, such as legal, financial advisory
    and accounting fees, will be incurred regardless of whether it is completed.
    These expenditures will decrease the remaining cash available for eventual
    distribution to shareholders or for use in connection with any future strategic
    deployment.




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        Annual Report and Form 20-F |  | 91
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      and Form 20-F
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Chapter 11



OTHER



FINANCIAL



INFORMATION



ON THE



COMPANY





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|Chapter
        11 | Other
        financial information on the company
|------------------ | --------------------------------------------------

---

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. Until 2004, we prepared
    our consolidated financial statements in accordance with Dutch GAAP. 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 TNT, there are no differences between the IFRS as adopted by the European
    Union and the IFRS as issued by the International Accounting Standards Board.
    As a result our 2005 consolidated financial statements have been prepared
    in accordance with IFRS and the comparative 2004 numbers have been adjusted.
    A detailed explanation of the transition to IFRS and the impact on our financial
    numbers is given in chapter 12.




On 6 December 2005, we
    announced a strategy to focus on providing delivery services by expertly managing
    networks, in particular transportation, resulting in the decision to dispose
    of our non-network related logistics activities. Accordingly our logistics
    business is reported as discontinued operations/ assets held for sale. In
    our balance sheet as at 31 December 2005 we have grouped together all assets
    and liabilities relating to our discontinued logistics business. As prescribed
    by IFRS 5, Non current assets held for sale and discontinued operations,
    our 31 December 2004 balance sheet has not been adjusted. In our statement
    of income for 2005, we have presented the net result of our discontinued logistics
    business on a separate line. Our 2004 statement of income has been adjusted
    for comparable purposes. Our 2005 and 2004 cash flow statements include cash
    flows and cash balances of our continuing operations.




FINANCIAL CONDITION

|Year
        ended at 31 December                               |        
|--------------------------------------------------------------- | -------
|                                                                | 2005   
|                                                                | US$    
|                                                                |        
|**BALANCE SHEET**                                               |        
|                                                                |        
|Non-current assets                                              | 4,338  
|                                                                |        
|Current assets                                                  | 2,789  
|                                                                |        
|Assets held for sale                                            | 2,816  
|                                                                |        
|Total assets                                                    | 9,943  
|                                                                |        
|Equity                                                          | 3,883  
|                                                                |        
|Non-current liabilities                                         | 1,904  
|                                                                |        
|Current liabilities                                             | 2,699  
|                                                                |        
|Liabilities related
      to assets classified as held for sale | 1,457  
|                                                                |        
|Total liabilities
      and equity                              | 9,943  
|                                                                |        
|Net return on equity1(%)                                        | 20.1   
|                                                                |        
|Equity as % of total
      liabilities and equity               | 39.1   
|                                                                |        
|CASH FLOW CONTINUING
      OPERATIONS                           |        
|                                                                |        
|Net cash from operating
      activities                        | 1,165  
|                                                                |        
|Net cash used in investing
      activities                     | (314   
|                                                                |        
|Net cash used in financing
      activities                     | (922   
|                                                                |        
|**Changes in
      cash and cash equivalents**                  | **(71**
|                                                                |        
|(in millions, except
      percentages)                         |        

|1 | The profit attributable
      to the shareholders as a percentage of the total equity.
|- | --------------------------------------------------------------------------------------



CASH FLOW DATA

Cash
  and cash equivalents totalled €559 million at 31 December 2005, compared
  to €633 million at 31 December 2004. Of the cash and cash equivalents of
  €633 million as at 31
  December 2004, €71 million related to our discontinued logistics business.
  The following table provides a summary of cash flows from continuing operations
  for the past two years:




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|Other
        financial information on the company | Chapter
        11
|-------------------------------------------------- | ------------------

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|                                                              | Year
        ended at 31 December |         
|------------------------------------------------------------- | --------------------------------- | --------
|**CASH FLOW DATA**                                            | 2005                              | variance
|                                                              | US$                               |         
|                                                              |                                   |         
|****                                                          |                                   |         
|Net cash from operating
      activities                      | 1,165                             |         
|                                                              |                                   |         
|NET CASH USED IN
      INVESTING ACTIVITIES                   |                                   |         
|                                                              |                                   |         
|Net cash used for acquisitions
      and disposals            | (60                               | )       
|                                                              |                                   |         
|Net cash used for capital
      investments and disposals     | (319                              | )       
|                                                              |                                   |         
|Net cash
      used for other investing activities            | 65                                |         
|                                                              |                                   |         
|NET CASH USED IN
      FINANCING ACTIVITIES                   |                                   |         
|                                                              |                                   |         
|Net cash used for dividends
      and other changes in equity | (858                              | )       
|                                                              |                                   |         
|Net cash from debt
      financing activities                 | (64                               | )       
|                                                              |                                   |         
|Changes in cash
      and cash equivalents                    | (71                               | )       
|                                                              |                                   |         
|(in millions, except
      percentages)                       |                                   |         



NET CASH FROM OPERATING
    ACTIVITIES2005In 2005 net cash provided by operating activities was €984
    million, which is an increase of 39% compared to 2004 (€708 million).
    Profit before income taxes contributed €1,151 million, or €1,471
    million if adjusted for the non-cash impact of depreciation, amortisation
    and impairments, an increase of €72 million or 5% compared to 2004 (€1,399
    million). The changes in pension
    liabilities of €123 million reflect the total non-cash charges for the
    defined benefit pension schemes of €141 million, offset by our total
    cash contributions of €166 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 €168 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 De Nederlandsche Bank (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 €180 million in 2005, compared to a decrease of €21 million in
    2004. Most of the increase of the accounts receivable position related to
    an increase of trade receivables that moved unfavourably by €165 million
    due to a combination of additional revenue and increased debtor days. Trade
    payables negatively impacted the cash flow by €77 million as a result
    of a decrease of creditor days compared to last year. Other current liabilities
    moved favourably by €66 million, including higher accruals for subcontractors
    and claims.





Interest and similar
    expenses amounted to €121 million, including non-cash hedge results of
    €21 million. The cash outflow for interest paid totalled €84 million.
    Income taxes paid was €130 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 €708
    million. Profit before income taxes contributed €1,096 million, or €1,399
    million if adjusted for the non-cash impact of depreciation, amortisation
    and impairments. The changes in pension
    liabilities of €254 million reflect the total non-cash charges for the
    defined benefit pension schemes of €91 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 €21 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 €77 million. The cash outflow for
    interest paid totalled €87 million and income taxes paid was €404
    million.




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        Annual Report and Form 20-F |  | 95
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|Chapter
        11 | Other
        financial information on the company
|------------------ | --------------------------------------------------

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NET CASH USED IN INVESTING
    ACTIVITIESNet cash used for acquisitions and disposals2005
    In 2005, the total payments for acquisitions of group companies amounted to
    €36 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 €6 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. 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.




Net cash used for capital
  investments and
  disposalsCAPITAL EXPENDITURES AND
  PROCEEDS

|                                                                                               | Year
        ended at 31 December |     
|---------------------------------------------------------------------------------------------- | --------------------------------- | ----
|Capital expenditures
      and proceeds on property, plant and equipment and other intangibles | 2005                              | 2004
|                                                                                               | US$                               |     
|                                                                                               |                                   |     
|Investments                                                                                    |                                   |     
|                                                                                               |                                   |     
|Property, plant and
      equipment                                                            | 276                               |     
|                                                                                               |                                   |     
|Other intangible assets                                                                        | 95                                |     
|                                                                                               |                                   |     
|**Subtotal**                                                                                   | **371**                           |     
|                                                                                               |                                   |     
|Proceeds from sale
      of property, plant and equipment                                      | 51                                |     
|                                                                                               |                                   |     
|Disposals of other
      intangible assets                                                     | 1                                 |     
|                                                                                               |                                   |     
|**Subtotal**                                                                                   | **52**                            |     
|                                                                                               |                                   |     
|Total                                                                                          | 319                               |     
|                                                                                               |                                   |     
|(in millions)                                                                                  |                                   |     



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










|                   | Year
        ended at 31 December |     
|------------------ | --------------------------------- | ----
|                   | 2005                              | 2004
|                   | US$                               |     
|                   |                                   |     
|Mail               | 121                               |     
|                   |                                   |     
|Express            | 230                               |     
|                   |                                   |     
|Freight management | 3                                 |     
|                   |                                   |     
|Non-allocated      | 17                                |     
|                   |                                   |     
|Total              | 371                               |     
|                   |                                   |     
|(in millions)      |                                   |     



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      and Form 20-F
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|Other
        financial information on the company | Chapter
        11
|-------------------------------------------------- | ------------------

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In 2005, capital expenditures
    on property, plant and equipment amounted to €233 million (2004: 225).
    Of this amount, €80 million (2004: 75) related to mail, €143 million
    (2004: 144) to the express business and to our freight management business
    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 and 2004, 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:
    21), which mainly related to several buildings of TNT Real Estate B.V. and
    TNT Real Estate Development B.V. (€23 million) and buildings and equipment
    of the joint venture Postkantoren B.V. (€7 million) in the mail division
    and equipment in our express operations in the United Kingdom (€4 million). MAIL2005
    Capital 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. Most of
    these were less than €1 million individually and included building refurbishments
    mainly in the Netherlands, renewal of IT equipment and software, operational
    equipment, and various other capital expenditures. 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. 2004
    Capital 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, most of these were individually less than €1 million and included
    building refurbishments mainly in the Netherlands, replacement of IT equipment,
    and various other capital expenditures. 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.




EXPRESS2005
    Capital 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. 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). 2004
    Capital 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). FREIGHT MANAGEMENTCapital expenditures on property, plant and equipment and other intangible
    assets by our freight management operations amounted to €3 million (2004:
    8). Net cash used for
    other investing activities2005
    The net cash generated by other investing activities included €18 million
    mainly attributable to settling net balances relating to our disposal of Global
    Collect B.V. Interest and similar income amounted to €115 million of
    which €72 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.


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|Chapter
        11 | Other
        financial information on the company
|------------------ | --------------------------------------------------

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|2004
          The net cash generated by other investing activities included €164
          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
          Net cash used for dividends and other changes in shareholders
          equity2005
          A final cash dividend for 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 proposed
          final dividend for 2005 is estimated to result in an aggregate €172
          million payment to be made in the second quarter of 2006.
        In 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 €231million. 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.
        In 2005 the net
          cash flow used in financing our discontinued logistics business amounted
          to €28 million.
        2004
          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, €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.
        In 2004 the net
          cash flow provided by financing our discontinued logistics business
          amounted to €211 million.
        Net cash from
          debt financing activities2005
          Movements in long term borrowings resulted in a net cash inflow of €29
          million. The total proceeds from long term borrowing of €35 million
          consist mainly of a €14 million additional issuance of the 3.875%
          2015 Eurobond, a €13 million increase in bank loans, and a €7
          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 €55 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.
        2004
          Movements in long term borrowings resulted in a net cash outflow of
          €62 million. The acquired long term liabilities of €16 million
          include €11 million of finance leases and €5 million of interest
          bearing liabilities. A total of €78 million in repayments of long
          term liabilities related, amongst others, to scheduled repayments on
          aircraft leases and other leases of €9 million, the repayment of
          Wilson (now called TNT Freight Management) bank loans (€53 million)
          and to various other movements in non-interest bearing liabilities.
        Changes in short
          term financing for 2004 resulted in a cash outflow of €48 million,
          mainly relating to the repayment of loans of €20 million existing
          within the Wilson group, a cash outflow of €8 million regarding
          hedge transactions and various other repayments of loans within our
          express and mail divisions.
        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 (€984 million in 2005, €708 million in
          2004). As with any global organisation, these operating cash flows are
          affected by economic and business trends. The majority of our 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 longterm
          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 and showed an improving trend for the most recent
          three financial years. Specifically, the ratio of operating cash flows
          to net capital expenditure was 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 operating
          cash flows to
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continue to cover our
    capital expenditure requirements in the foreseeable future. We believe our
    working capital is sufficient for our present requirements. For buy back of shares
    and any acquisitions 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, we would also consider issuing equity in order to protect our
    credit rating position. 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 28 to our consolidated
    financial statements. 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 and 14 to our consolidated financial statements. Off-balance sheet
    items
    Other than guarantees and other similar arrangements that could be considered
    off-balance sheets and that are disclosed in this annual report, we have no
    off-balance arrangements. CASH AND NET DEBTAt 31 December 2005, our total cash position amounted to €559 million.
    Despite cash paid of €473 million relating to our share buy backs during
    the year, our cash as at 31 December 2005 was only €74 million lower
    than compared to year end 2004. Included in the €559 million of total
    cash was €140 million of restricted cash (2004: 171) held mainly by joint
    ventures and 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. At 31 December 2005,
    our net debt position was €725 million (2004: 858). This consisted of
    €213 million of short term debt (2004: 51) and €1,071 million (2004:
    1,440) of long term debt, offset by €559 million of cash and cash equivalents
    (2004: 633). At 31 December 2005,
    short term borrowings consisted of €65 million (2004: 36) of bank debt
    bearing variable interest rates, and €148 million (2004: 15) of numerous
    other liabilities at fixed and variable rates, including a €129 million bilateral loan agreement
    maturing in 2006 with a fixed interest of 2.54%.




At 31 December 2005,
    long term debt consisted of a combination of two Eurobonds of €1,009
    million (2004: 1,000), finance lease agreements of €24 million (2004:
    86), €31 million of other long term liabilities at fixed and variable
    interest rates (2004: 354) and €7 million of interest rate swaps. On 5 December 2001, TNT
    N.V. issued a €1 billion Eurobond with an original maturity of seven
    years. The bond has a coupon of 5.125% and began paying interest annually
    in arrears on 5 December 2002. In May 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. The total €1,046
    million (2004: 1,000) of Eurobonds will be measured at amortised cost. The
    book value of the nominal €1,046 million of Eurobonds amounted to €1,009
    million (2004: 1,000) as at 31 December 2005. We have a total €500
    million (2004: 300) of interest rate swaps outstanding on which we receive
    fixed interest and pay floating interest. The market value of these instruments
    amounted to negative €2 million as at December 2005 (negative €1
    million as at 31 December 2004). In December 2005, we
    entered into €500 million of forward starting interest rate swaps on
    which we receive floating interest and pay fixed interest. These flows of
    interest exchanges under the forward starting interest rate swaps will start
    in December 2008. 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 for which we paid the market value of €12 million.
    The market value of this long term €100 million outstanding forward starting
    interest rate swap amounted to €5 million as at 31 December 2005 (€0
    million as at 31 December 2004). CREDIT FACILITIESWe have successfully negotiated to extend and increase our Multicurrency
    Revolving Credit Facility of €600 million maturing in 2008 to €1
    billion maturing in 2012. The €1 billion facility will be used for general
    funding purposes and serves as a back-up facility for our Euro Commercial
    Paper Programme. At 31 December 2005,
    our long term credit ratings were A (on CreditWatch with negative implications)
    by Standard & Poors and A2 (under review for further possible downgrade)
    by Moodys.




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        Annual Report and Form 20-F |  | 99
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|Chapter
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CASH OBLIGATIONSAt 31 December 2005, our gross interest bearing borrowings, including
    finance lease obligations, totalled €1,284 million (2004: 1,491), of
    which 94% (2004: 84%) was at fixed rates of interest and €1,071 million
    (2004: 1,440) represented long term debt. We had operating lease commitments
    of €1,251 million (2004: 1,675). The following table show
    the maturity of these amounts:








|Amounts
        of payments due by period  | Total |  | Less
        than
        1 year |  | 1
        to 3
        years |  | 4
        to 5
        years |  | After
        5
        years | 
|------------------------------------------ | ----- |  | -------------------------------- |  | ---------------------------- |  | ---------------------------- |  | ----------------------------- | 
|                                           |       |  |                                  |  |                              |  |                              |  |                               | 
|Total borrowings                           | 1,284 |  | 213                              |  | 655                          |  | 10                           |  | 406                           | 
|                                           |       |  |                                  |  |                              |  |                              |  |                               | 
|Rent and operating
      lease commitments | 1,251 |  | 229                              |  | 392                          |  | 245                          |  | 385                           | 
|                                           |       |  |                                  |  |                              |  |                              |  |                               | 
|Total contractual
      cash obligations   | 2,535 |  | 442                              |  | 1,047                        |  | 255                          |  | 791                           | 
|                                           |       |  |                                  |  |                              |  |                              |  |                               | 
|(in € millions)                            |       |  |                                  |  |                              |  |                              |  |                               | 

|GUARANTEES                                              |       |  |                                  |  |                              |  |                              |  |                               | 
|------------------------------------------------------- | ----- |  | -------------------------------- |  | ---------------------------- |  | ---------------------------- |  | ----------------------------- | 
|                                                        |       |  |                                  |  |                              |  |                              |  |                               | 
|**Amounts
        of commitments expiration by period** | Total |  | Less
        than
        1 year |  | 1
        to 3
        years |  | 4
        to 5
        years |  | After
        5
        years | 
|                                                        |       |  |                                  |  |                              |  |                              |  |                               | 
|Guarantees                                              | 267   |  | 11                               |  | 71                           |  | 10                           |  | 175                           | 
|                                                        |       |  |                                  |  |                              |  |                              |  |                               | 
|(in € millions)                                         |       |  |                                  |  |                              |  |                              |  |                               | 

Total financial guarantees
    at 31 December 2005 were €267 million (2004: 350) of which €99 million
    (2004: 164) amounted to corporate guarantees. These guarantees were mainly
    issued in connection with our obligations under lease contracts, custom duty
    deferment and local credit lines. The increase of corporate guarantees to
    banks was mainly due to local credit lines. Furthermore, banks
    and other financial institutions have issued guarantees to cover obligations
    of group companies up to an amount of €147 million (2004: 127). These
    guarantees were mainly issued in connection with our obligations under lease
    contracts, customs duty deferment and local credit lines. The obligations
    under the guarantees issued by banks and other financial institutions have
    been secured by TNT N.V. or by its subsidiaries. The €21 million (2004:
    59) of remaining guarantees in 2005 relates to bank guarantees issued locally
    by group companies. CONTINGENCIESOPERATING LEASE COMMITMENTS Our total operating lease
    commitments at the end of the year were €1,251 million (2004: 1,675).
    The total commitments as at 31 December 2005 relating to capital expenditure
    were €16 million (2004: 33). SHARE BUY BACK
    On 6 December 2005, we
    announced to return capital to our shareholders by repurchasing ordinary shares.
    This share buy back programme started on 6 December 2005 and is expected to
    end 6 April 2006 unless prior to such date: (a) the aggregate value of shares
    acquired would exceed €1 billion; (b) 10% of the outstanding ordinary
    shares have been




repurchased, including
    any ordinary shares already held by the company; or (c) if a cash or exchange
    offer with respect to our shares is publicly launched through the publication
    of an offer document. As at 31 December 2005,
    we repurchased 9,020,000 of our ordinary shares for a total amount of €231
    million. Note 40 includes a table summarising our repurchases during December
    2006. Under this repurchase programme we anticipate purchasing additional
    shares with a value of €769 million. It is our intention to cancel the
    repurchased ordinary shares and we intend to request for such cancellation
    to be approved by our shareholders. UNCONDITIONAL PURCHASE
    COMMITMENTSAt 31 December 2005 we
    had unconditional purchase commitments of €100 million (2004: 84), which
    were primarily related to various service and maintenance contracts. INCOME TAXES 
    In 2005, TNT continued to investigate and analyse its global tax position.
    As a result we currently estimate the realistic range to reflect our total
    contingent liability in this regard is between €150 million and €550
    million.
  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. The 2004 investigation, concluded
    that not all relevant details in connection with these tax matters were adequately
    disclosed




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|to the UK tax
        authorities and PricewaterhouseCoopers. In addition to this investigation,
        in 2004 our audit committee, with the assistance of external legal and
        tax advisors, conducted a review of other UK tax matters that arose from
        the same period. 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 will cover UK tax matters
        that were not the subject of the original investigation. We are in continuing
        discussions with the UK tax authorities in this connection, and we do
        not expect that these matters will be resolved with the UK tax authorities
        before the end of 2006.
      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, we have determined that no provision or contingent liability
        is required as a result of this investigation.
      We have also
        analysed and continue to analyse the tax positions of some of our subsidiaries
        with respect to other countries.
      Our investigations
        and analyses, which are ongoing, concern, 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. Some of these structures, which were set up in consultation
        with outside advisors, have been, or might be, challenged by various tax
        authorities.
      An item that
        will be addressed in the addendum to our report to the UK tax authorities
        concerns whether some of our subsidiaries might have been resident in
        the United Kingdom prior to the acquisition of TNT Limited in December
        1996 and, if so, whether tax on capital gains would have been due when
        the tax residency of those subsidiaries later may have moved to another
        European country. We are still investigating the residency of the relevant
        subsidiaries, but even if they were UK resident, we believe that the imposition
        of such a tax on capital gains would be impermissibly discriminatory under
        EU law.
      The addendum
        will also deal among other things, with certain transfer pricing issues
        in respect of which on 9 February 2005 we made a payment on account to
        the UK tax authorities of €22 million. We charged this payment against
        a tax accrual that we recorded in 2004 in connection with this issue. |  | As part of a pilot
        publicly announced to the Dutch parliament to which the Dutch Ministry
        of Finance and the Confederation of Netherlands Industry and Employers
        (VNO-NCW) are committed, we recently signed a compliance covenant with
        the Dutch tax authorities 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.
        An example of what we expect to discuss is the group-wide finance structure
        we have applied in the past and the structure we intend to apply in the
        future.
      From the extensive
        review to date of our global tax position, on the basis of the facts and
        circumstances as currently known and advice received from external advisors,
        we currently believe that it is unlikely that we will incur an additional
        liability beyond what we have accrued to date, and thus we have not made
        any further provision in connection with these matters in our financial
        statements for 2005. To date no assessments relating to the items under
        investigation or analysis have been raised, and it is difficult to assess
        if and when, and if so, for what amount, any particular assessment might
        be raised. Our interpretation of past facts and circumstances and relevant
        tax laws and regulations may be open to challenge. 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.
      Although we currently
        believe that it is unlikely that we will incur an additional liability
        beyond what we have accrued to date, we estimate that the realistic range
        to reflect our total contingent liability in this regard, including potential
        penalties and interest, is between €150 million and €550 million.
        This estimate incorporates our current assessment of the matters underlying
        the contingent liability disclosure in our audited financial statements
        for 2004. This estimate is based on a probability-weighted assessment
        of our estimated total theoretical liability. It has been tested against
        possible settlement negotiation scenarios. Altogether this estimate represents
        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, 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 of
        the realistic range of the total contingent liability of €150-€550
        million 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 assessments 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.
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        Annual Report and Form 20-F |  | 101
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|Chapter
        11 | Other
        financial information on the company
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OTHER
    We 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.  Equity reconciliation
        as per1
          January
          2004
      
      31
          December
          2004Total equity under
        Dutch GAAP
      2,986
      
      2,784Minority interests
      (17
      )
      (19
      )Equity under Dutch
        GAAP
      2,969
      
      2,765Discounting
        provisions
      1Goodwill
        amortisation
      
      
      135Intangible
        assets
      
      
      (6
      )Other
        employee benefits
      (35
      )
      (34
      )Employee
        benefits pensions
      47
      
      11Minimum
        pension liability
      
      
      454Other
      (1
      )Equity under IFRS
      2,981
      
      3,325Minority interests
      17
      
      19Total equity under
        IFRS
      2,998
      
      3,344(in € millions)  Reconciliation
        profit for the period attributable to the shareholdersFull year2004Profit attributable
        to
        the shareholders under Dutch GAAP
      667Goodwill
        amortisation
      135Intangible
        assets
      (6
      )Share
        based compensation
      (6
      )Other
        employee benefits
      (3
      )Employee
        benefits pensions
      (38
      )Other
      3Profit attributable
        to the shareholders under IFRS
      752(in € millions)




For a further description
    of these contingencies see note 28 to our consolidated financial statements
    and note 43 of the financial statements of TNT N.V. CAPITAL EXPENDITURES
    PROJECTION FOR 2006The total projected 2006 capital expenditures on property, plant and equipment
    and other intangible assets for our divisions is estimated to be €400
    million, which is expected to be spent on similar types of property, plant
    and equipment and other intangible assets as in 2005. We believe that the
    net cash provided by our operating activities will be sufficient to fund these
    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 such undertakings, or such undertakings
    source supplies from our group companies. During 2005, sales made by our group
    companies to our joint ventures amounted to €42 million, compared to
    €24 million in 2004. Purchases from our joint ventures for 2005 amounted
    to €131 million, compared to €125 million in 2004. The net amounts
    due from joint venture entities as at 31 December 2005 totalled €49 million,
    compared to €49 million in 2004. Loans receivable from
    associated companies are disclosed in notes 3 and 5 to our consolidated financial
    statements. As at 31 December 2005, 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 32 to our
    consolidated financial statements. For information on our relationship with
    the State of the Netherlands see chapter 14 and note 32 to our consolidated
    financial statements. TRANSITION
    TO INTERNATIONAL FINANCIAL REPORTING STANDARDS The conversion from Dutch
    GAAP to IFRS is explained in detail in chapter 12, Note Transition to
    International Financial Reporting Standards as adopted by the EU.




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|Other
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|CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES
      Our reported financial
        condition and results of operations are sensitive to accounting policies,
        assumptions and estimates that underlie 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 ASSETSUnder IFRS all of our business combinations are accounted for as purchases.
        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 reporting 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.
      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.
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|Chapter
        11 | Other
        financial information on the company
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|POST-EMPLOYMENT
        BENEFITS
        First time adoption of International Financial Reporting StandardsAs permitted under IFRS 1, 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 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 difference in the pension expense
        and pension liability 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, but based on the employees expected date
          of separation or retirement. For US GAAP purposes, 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.
          This option is permitted under Emerging Issues Task Force (EITF) No.
          88-1, Determination of Vested Benefit Obligation for Defined Benefit
          Plan.
      Pension costInherent to the valuation of our pension liabilities and the determination
          of our pension cost are key assumptions, which include employee turnover,
          mortality and retirement ages, discount rates, expected long term returns
          on plan assets, 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 2005, our employer
          pension expense was €141 million (2004: 185). Total cash contributions
          in 2005 amounted to €264 million (2004: 437) and are expected to
          amount to approximately €222 million in 2006. Cash contributions
          to the various pension funds totalled €166 million. Of these payments
          €59 million was contributed as prescribed by the minimum funding
          requirements of the DNB. Our cash payments for pensions, which fall
          under the transitional plan for early retirement in the Netherlands
          and are directly paid by us (see note 10 to our consolidated financial
          statements), amounted to €98 million.
      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, contract settlements and |  | tangible asset
            impairments. Actual experience has been and may continue to be different
            from these estimates. As at 31 December 2005 and 2004, restructuring
            provisions were €43 million and €49 million, respectively.
        
        ACCRUED CURRENT
          LIABILITIES 
          We 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 to our
          customers (for example sales for Christmas greetings in November and
          December).
        INCOME TAXES
          We 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 OPERATIONS 
          Accounting 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 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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|Other
        financial information on the company | Chapter
        11
|-------------------------------------------------- | ------------------

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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 shareholders equity to those under US GAAP, as presented
    in note 34 to our consolidated financial statements. Net income determined
    in accordance with US GAAP was €632 million in 2005 (2004: 714), which
    was €27 million lower than net income determined in accordance with IFRS
    in 2005 compared to €38 million lower in 2004. This 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 shareholders
    equity determined in accordance with US GAAP was €2,757 million at 31
    December 2005 (2004: 2,622), which was €505 million lower at 31 December
    2005 and €703 million lower at 31 December 2004 than shareholders
    equity determined in accordance with IFRS. The lower equity under US GAAP
    was mainly caused by a direct equity movement related to a minimum pension
    liability of €587 million at 31 December 2005 (2004: 454), net of taxes.
    This was partly offset by differences relating to goodwill and employee benefits. Under US GAAP we are
    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. Under IFRS such a minimum pension liability is not required. 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 of €843 million. 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 have presented assets and liabilities of our discontinued logistics
    business as long lived assets to be disposed of by sale and have 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. 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 the following criteria: 
      the
        asset or disposal group must be available for immediate sale in its present
        condition,
      the sale must
          be highly probable, which requires appropriate level of management be
          committed to a plan to sell the assets or disposal group, 
      an
        active programme to locate a buyer and complete the plan must have been
        initiated,
      the asset or disposal
        group must be actively marketed for sale at a price that is reasonable
        in relation to its current fair value,
      the sale should
        be expected to qualify for recognition as a completed sale within one
        year from the date of classification andactions
        required to complete the plan should indicate that it is unlikely that
        significant changes to the plan will be made or that the plan will be
        withdrawn. We have met all the
    criteria as required under IFRS 5. Our Board of Management is committed to
    a plan to sell the assets and as defined in the Dutch Civil Code, it can legally
    represent the company even in the event the general meeting of shareholders
    may not grant approval to certain resolutions. Furthermore, the Dutch Civil
    Code states that when a Board of Management commits a company in legally valid
    matters, the company is bound towards a third party. The logistics business
    is available for immediate sale in its present condition and we believe the
    sale of the business is highly probable. The position of the
    SEC is that in the event shareholder approval is required, management is not
    considered having authority. Accordingly, under US GAAP the criteria




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|Chapter
        11 | Other
        financial information on the company
|------------------ | --------------------------------------------------

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management having
    the authority to approve the action, commits to a plan to sell the asset
    is not met. The French logistics business meets all criteria and has been
    presented as discontinued operations and the remainder of the logistics business
    has presented as part of continuing operations. Depreciation and amortisation
    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 €8 million and is included as a
    reconciling item between IFRS and US GAAP. The following table indicates
    our 2005 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                        | 2005                              | %
        of total
|                                        | US$                               |                   
|                                        |                                   |                   
|Mail                                    | 920                               |                   
|                                        |                                   |                   
|Express                                 | 561                               |                   
|                                        |                                   |                   
|Freight management                      | 13                                |                   
|                                        |                                   |                   
|Logistics                               |                                   |                   
|                                        |                                   |                   
|Non-allocated                           | (122                              | )                 
|                                        |                                   |                   
|Total                                   | 1,372                             |                   
|                                        |                                   |                   
|(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 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. This was partly offset by higher
        pension expenses under IFRS.
      Operating income
        in our express and freight management businesses have no material differences
        between IFRS and US GAAP.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Year
        ended at 31 December |                 
|----------------------------------------- | --------------------------------- | ----------------
|Operating income                          | IFRS                              | US
        GAAP 
|                                          | 2004                              | %
      of total
|                                          |                                   |                 
|Mail                                      | 806                               |                 
|                                          |                                   |                 
|Express                                   | 375                               |                 
|                                          |                                   |                 
|Freight management                        | 6                                 |                 
|                                          |                                   |                 
|Logistics                                 |                                   |                 
|                                          |                                   |                 
|Non-allocated                             | (71                               | )               
|                                          |                                   |                 
|Total                                     | 1,116                             |                 
|                                          |                                   |                 
|(in € millions,
      except percentages) |                                   |                 



|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. Freight management operating income has no material
      differences between IFRS and US GAAP.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|Other
        financial information on the company | Chapter
        11
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|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 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 statement supersedes APB Opinion
        No. 25, Accounting for Stock issued to Employees. The provisions
        of this statement were effective 1 January 2006. As permitted by FASB
        Statement No. 148, Accounting for Stock-Based Compensation  Transition
        and Disclosure, we have elected, effective 1 January 2005, to measure
        our share based payments using a fair value method under SFAS 123 using
        the transition provisions of SFAS 148. Accordingly, we do not expect the
        adoption of SFAS 123(R) to have a material impact on our financial statements.
        The Emerging Issues Task Force (EITF) issued EITF 05-6, Determining
        the Amortization 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 are required to adopt this
        pronouncement effective 1 January 2006 and do not expect the adoption
        the EITF 05-6 to have a material 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, liquidity risk and cash flow 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 our note on Financial
      Risk Management in chapter 12.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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      and Form 20-F
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Chapter 12



FINANCIAL



STATEMENTS



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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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INDEX TO FINANCIAL STATEMENTS
  OF TNT N.V.

|REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                   | 111 | 
|------------------------------------------------------------------------------- | --- | 
|CONSOLIDATED
      BALANCE SHEETS                                               | 112 | 
|CONSOLIDATED
      STATEMENTS OF INCOME                                         | 113 | 
|CONSOLIDATED
      CASH FLOW STATEMENTS                                         | 114 | 
|CONSOLIDATED
      STATEMENTS OF CHANGES IN TOTAL EQUITY                        | 115 | 
|NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS                            | 116 | 
|GENERAL
      INFORMATION AND DESCRIPTION OF OUR BUSINESS                       | 116 | 
|SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES                                | 116 | 
|ADOPTION
      OF IAS 32 AND IAS 39                                             | 123 | 
|RECENT
      IFRS PRONOUNCEMENTS                                                | 124 | 
|CRITICAL
      ACCOUNTING ESTIMATES AND JUDGEMENTS                              | 124 | 
|FINANCIAL
      RISK MANAGEMENT                                                 | 125 | 
|TRANSITION
      TO INTERNATIONAL FINANCIAL REPORTING STANDARDS                 |     | 
|AS
      ADOPTED BY THE EUROPEAN UNION                                          | 126 | 
|NOTES
      TO THE CONSOLIDATED BALANCE SHEETS                                  | 131 | 
|NOTES
      TO THE CONSOLIDATED STATEMENTS OF INCOME                            | 143 | 
|NOTES
      TO THE CONSOLIDATED CASH FLOW STATEMENTS                            | 155 | 
|ADDITIONAL
      NOTES                                                          | 157 | 
|TNT
      N.V. CORPORATE BALANCE SHEETS                                         | 175 | 
|TNT
      N.V. CORPORATE STATEMENTS OF INCOME                                   | 175 | 
|NOTES
      TO THE CORPORATE BALANCE SHEETS AND STATEMENTS OF INCOME            | 176 | 
|OTHER
      INFORMATION                                                         | 184 | 
|EXTRACT
      FROM THE ARTICLES OF ASSOCIATION ON APPROPRIATION OF PROFIT       | 184 | 
|APPROPRIATION
      OF PROFIT                                                   | 184 | 
|SPECIAL
      CONTROL RIGHTS UNDER THE ARTICLES OF ASSOCIATION OF SPECIAL SHARE | 184 | 
|OTHER
      ARRANGEMENTS WITH THE STATE OF THE NETHERLANDS                      | 184 | 



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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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REPORT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying
  consolidated balance sheets of TNT N.V. and its subsidiaries as of 31 December
  2005 and 2004 and the related consolidated statements of income, of cash flows
  and of changes in group equity for each of the two years in the period ended
  31 December 2005, as set out on pages 112 to 182. These consolidated financial
  statements are the responsibility of the Board of Management. Our responsibility
  is to express an opinion on these consolidated financial statements based on
  our audits.

We conducted our audits
  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 consolidated financial
  statements are free of material misstatement. An audit includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the consolidated
  financial statements. An audit also includes assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the consolidated
  financial statements referred to above present fairly, in all material respects,
  the financial position of TNT N.V. and its subsidiaries at 31 December 2005
  and 2004, and the results of their operations and their cash flows for each
  of the two years in the period ended 31 December 2005, in conformity with International
  Financial Reporting Standards.

As discussed in the paragraph
  regarding the adoption of IAS 32 and IAS 39 on page 123 in the notes to the
  consolidated financial statements, TNT N.V. changed its accounting for financial
  instruments effective 1 January 2005.

International Financial
  Reporting Standards 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 34 to the consolidated financial statements.

Amsterdam, 24 February
  2006 PricewaterhouseCoopers Accountants
  N.V.

Drs M. de Ridder RA



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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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CONSOLIDATED
  BALANCE SHEETSBefore proposed appropriation of profit

|             |                                                                   |                                                                 |       |       |      | At
        31 December |      
|------------ | ----------------------------------------------------------------- | --------------------------------------------------------------- | ----- | ----- | ---- | ---------------------- | -----
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       | 2005  |      | variance
      %       |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Non-current
        assets                                      |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        1  | Intangible
        assets                                         |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Goodwill                                                        |       | 1,626 |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Other
        intangible assets                                 |       | 212   |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total intangible
      assets                                   |       | 1,838 |      | (30.5                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        2  | Property,
        plant and equipment                             |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Land
        and buildings                                      |       | 805   |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Plant
        and equipment                                     |       | 313   |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Other                                                           |       | 390   |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Construction
        in progress                                |       | 44    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total property,
      plant and equipment                       |       | 1,552 |      | (19.3                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        3  | Financial
        fixed assets                                    |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Investments
        in associates                               |       | 47    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Other
        loans receivable                                  |       | 13    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        23 | Deferred
        tax assets                                       |                                                                 | 188   |       |      |                        | 253  
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Prepayments
        and accrued income                          |       | 25    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total financial
      fixed assets                              |       | 273   |      | (45.7                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        non-current assets                                |       | 3,663 |      | (27.8                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Current
        assets                                          |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        4  | Inventory                                                         |                                                                 | 29    |       |      |                        | 46   
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        5  | Accounts
        receivable                                       |                                                                 | 1,471 |       |      |                        | 1,927
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        23 | Income
        tax receivable                                     |                                                                 | 78    |       |      |                        | 162  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        6  | Prepayments
        and accrued income                            |                                                                 | 218   |       |      |                        | 391  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        7  | Cash
        and cash equivalents                                 |                                                                 | 559   |       |      |                        | 633  
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        current assets                                    |       | 2,355 |      | (25.5                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        8  | Assets
        held for sale                                      |                                                                 | 2,378 |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        assets                                            |       | 8,396 |      | 2.0                    |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Equity
        attributable to the equity holders of the parent |       | 3,262 |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Minority
        interests                                      |       | 17    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
      9,36 | Total
        equity                                              |                                                                 | 3,279 |       | (1.9 | )                      | 3,344
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Non-current
        liabilities                                 |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        23 | Deferred
        tax liabilities                                  |                                                                 | 233   |       |      |                        | 236  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        10 | Provisions
        for pension liabilities                        |                                                                 | 136   |       |      |                        | 339  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        11 | Other
        employee benefit obligations                        |                                                                 | 49    |       |      |                        | 75   
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        12 | Other
        provisions                                          |                                                                 | 105   |       |      |                        | 100  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        13 | Long
        term debt                                            |                                                                 | 1,071 |       |      |                        | 1,440
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Accrued
        liabilities                                     |       | 14    |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        non-current liabilities                           |       | 1,608 |      | (27.6                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Current
        liabilities                                     |       |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Trade
        accounts payable                                  |       | 320   |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        12 | Short
        term provisions                                     |                                                                 | 29    |       |      |                        | 49   
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        14 | Other
        current liabilities                                 |                                                                 | 571   |       |      |                        | 507  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        23 | Income
        tax payable                                        |                                                                 | 233   |       |      |                        | 130  
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        15 | Accrued
        current liabilities                               |                                                                 | 1,126 |       |      |                        | 1,308
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        current liabilities                               |       | 2,279 |      | (14.5                  | )    
|             |                                                                   |                                                                 |       |       |      |                        |      
|O
        8  | Liabilities
        related to assets classified as held for sale |                                                                 | 1,230 |       |      |                        |      
|             |                                                                   |                                                                 |       |       |      |                        |      
|             |                                                                   | Total
        liabilities and equity                            |       | 8,396 |      | 2.0                    |      
|             |                                                                   |                                                                 |       |       |      |                        |      

| |  |   | (in € millions,
      except percentages)                                                                         
| |  | - | ------------------------------------------------------------------------------------------------------------------
| |  |  | The figure #Oin 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.                                   



---

|112 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

---



Back
  to Contents



|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

CONSOLIDATED
  STATEMENTS OF INCOME

|             |                                                                                        |                                                          |        | Year
        ended at 31 December |      
|------------ | -------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------ | --------------------------------- | -----
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        |                                                          |        | 2005                              |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        16 | Net
        sales                                                                      |                                                          | 10,050 |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        17 | Other
        operating revenues                                                       |                                                          | 55     |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Total
        revenues                                   |        | 10,105                            |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        18 | Other
        income                                                                   |                                                          | 38     |                                   | 375.0
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Cost
        of materials                                |        | (408                              | )    
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Work
        contracted out and other external expenses  |        | (4,196                            | )    
|             |                                                                                        |                                                          |        |                                   |      
|O
        19 | Salaries
        and social security contributions                                     |                                                          | (3,413 | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        20 | Depreciation,
        amortisation and impairments                                     |                                                          | (320   | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        21 | Other
        operating expenses                                                       |                                                          | (647   | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Total
        operating expenses                         |        | (8,984                            | )    
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Operating
        income                                 |        | 1,159                             |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Interest
        and similar income                      |        | 115                               |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Interest
        and similar expenses                    |        | (121                              | )    
|             |                                                                                        |                                                          |        |                                   |      
|O
        22 | Net
        financial (expense)/income                                                 |                                                          | (6     | )                                 | (66.7
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Results
        from investments in associates           |        | (2                                | )    
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Profit
        before income taxes                       |        | 1,151                             |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        23 | Income
        taxes                                                                   |                                                          | (379   | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Profit
        for the period from continuing operations |        | 772                               |      
|             |                                                                                        |                                                          |        |                                   |      
|O
        8  | Profit/(loss)
        from discontinued operations                                     |                                                          | (111   | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Profit
        for the period                            |        | 661                               |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Attributable
        to:                                 |        |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Minority
        interests                               |        | 2                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        | Shareholders                                             |        | 659                               |      
|             |                                                                                        |                                                          |        |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        per ordinary share (in € cents)1                                      |                                                          | 145.0  |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        per diluted ordinary share (in € cents)2                              |                                                          | 144.4  |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        from continuing operations per ordinary share (in € cents)1           |                                                          | 169.5  |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        from continuing operations per diluted ordinary share (in € cents)2   |                                                          | 168.7  |                                   |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        from discontinued operations per ordinary share (in € cents)1         |                                                          | (24.5  | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      
|             | Earnings
        from discontinued operations per diluted ordinary share (in € cents)2 |                                                          | (24.3  | )                                 |      
|             |                                                                                        |                                                          |        |                                   |      

| |   | (in €
      millions, except percentages and per share data)                                                                  
| | - | ------------------------------------------------------------------------------------------------------------------------------
| | 1 | In 2005
      based on an average of 454,367,662 of outstanding ordinary shares (2004:
      473,387,568). See note 29.       
| | 2 | In 2005
      based on an average of 456,360,619 of oustanding diluted ordinary shares
      (2004: 473,980,149). See note 29.
| |   |                                                                                                                              
| |   |                                                                                                                              



---

|2005
        Annual Report and Form 20-F |  | 113
|---------------------------------------- |  | ---

---



Back
  to Contents



|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

CONSOLIDATED
  CASH FLOW STATEMENTSBefore proposed
  appropriation of net income

|             |                                               |                                                                            |      | Year
        ended at 31 December |      
|------------ | --------------------------------------------- | -------------------------------------------------------------------------- | ---- | --------------------------------- | -----
|             |                                               |                                                                            |      |                                   |      
|             |                                               |                                                                            |      | 2005                              |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Profit
        before income taxes                                         |      | 1,151                             |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Adjustments
        for:                                                   |      |                                   |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Depreciation,
        amortisation and impairments                         |      | 320                               |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Share
        based payments                                               |      | 8                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Investment
        income:                                                 |      |                                   |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Profit/loss
      on sale of property, plant and equipment                 |      | (38                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Interest
        and similar income                                        |      | (115                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Foreign
        exchange gains                                             |      | 2                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Foreign
        exchange (losses)                                          |      |                                   |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Interest
        and similar expenses                                      |      | 119                               |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Results
        from investments in associates                             |      | 2                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Changes
        in provisions:                                             |      |                                   |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Pension
        liabilities                                                |      | (123                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Other
        provisions                                                   |      | 52                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Changes
        in working capital:                                        |      |                                   |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Inventory                                                                  |      | (2                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Accounts
        receivable                                                |      | (164                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Other
        current assets                                               |      | (3                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Trade
        payables                                                     |      | (77                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Other
        current liabilities excluding short term financing and taxes |      | 66                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Cash
        generated from operations                                     |      | 1,198                             |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Interest
        paid                                                      |      | (84                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Income
        taxes paid                                                  |      | (130                              | )    
|             |                                               |                                                                            |      |                                   |      
|O
        24 | Net
        cash from operating activities    |                                                                            | 984  |                                   | 39.0 
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Acquisition
        of group companies (net of cash)                       |      | (36                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Disposal
        of group companies and joint ventures                     |      | (5                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Investment
        in associates                                           |      | (13                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Disposal
        of associates                                             |      | 3                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Capital
        expenditure on intangible assets                           |      | (80                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Disposals
        of intangible assets                                     |      | 1                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Capital
        expenditure on property, plant and equipment               |      | (233                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Proceeds
        from sale of property, plant and equipment                |      | 43                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Other
        changes in (financial) fixed assets                          |      | 18                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Changes
        in minority interests                                      |      | (3                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Interest
        received                                                  |      | 40                                |      
|             |                                               |                                                                            |      |                                   |      
|O
        25 | Net
        cash used in investing activities |                                                                            | (265 | )                                 | 1.1  
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Repurchase
        of shares                                               |      | (473                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Other
        equity changes                                               |      | 16                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Proceeds
        from long term borrowings                                 |      | 28                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Repayments
        to long term borrowings                                 |      | (2                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Proceeds
        from short term borrowings1                               |      | 14                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Repayments
        to short term borrowings                                |      | (69                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Proceeds
        from finance lease                                        |      | 7                                 |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Payments
        of finance lease                                          |      | (4                                | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Dividends
        paid                                                     |      | (268                              | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Financing
        relating to our discontinued logistics business 2        |      | (28                               | )    
|             |                                               |                                                                            |      |                                   |      
|O
        26 | Net
        cash used in financing activities |                                                                            | (779 | )                                 | 174.3
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Change
        in cash                                                     |      | (60                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Cash
        at the beginning of the period as reported in 2004            |      | 633                               |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | of
        which discontinued (see note 8)                                 |      | (71                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Cash
        at the beginning of the period                                |      | 562                               |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Adoption
        IAS 32/39 per 1January 20051                              |      | 46                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Exchange
        rate differences                                          |      | 11                                |      
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Change
        in cash                                                     |      | (60                               | )    
|             |                                               |                                                                            |      |                                   |      
|             |                                               | Cash
        at the end of the period                                      |      | 559                               |      
|             |                                               |                                                                            |      |                                   |      

| | (in
      € millions, except percentages) For notes see page 115.
| | -----------------------------------------------------------------



---

|114 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

---



Back
  to Contents





|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

CONSOLIDATED
  STATEMENTS OF CHANGES IN TOTAL EQUITY

|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|---------------------------------------------------- |  | -------------------------------- |  | ---------------------------------------------- |  | --------------------------------------------- | - | --------------------------------------------------------- | - | ----------------------- | - | -------------------------------------------------------------------------------- | - | ----------------------- | - | -------------------- | -
|                                                     |  | Issued
      share
      capital |  | Additional
      paid
        in
      capital |  | Cumulative
      translation
      adjustment |   | Fair
        value
      and
        other
      reserves |   | Retained
      earnings |   | Attributable
      to
        equity
      holders
        of 
        theparent |   | Minority
      interest |   | Total
        equity |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Balance
        at 1 January 2004                    |  | 230                              |  | 1,421                                          |  |                                               |   | 1,115                                                     |   | 215                     |   | 2,981                                                                            |   | 17                      |   | 2,998                |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Profit
        for the period                        |  |                                  |  |                                                |  |                                               |   |                                                           |   | 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                  | )
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Repurchase
        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 period                        |  |                                  |  |                                                |  |                                               |   |                                                           |   | 659                     |   | 659                                                                              |   | 2                       |   | 661                  |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Gains/(losses)
        on cashflow hedges,           |  |                                  |  |                                                |  |                                               |   | (12                                                       | ) |                         |   | (12                                                                              | ) |                         |   | (12                  | )
|net
        ot tax                                   |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Currency
        translation adjustment              |  |                                  |  |                                                |  | 19                                            |   |                                                           |   |                         |   | 19                                                                               |   |                         |   | 19                   |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Total
        recognised income                      |  |                                  |  |                                                |  | 19                                            |   | (12                                                       | ) | 659                     |   | 666                                                                              |   | 2                       |   | 668                  |  
|for
        the year                                 |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Final
        dividend previous year                 |  |                                  |  |                                                |  |                                               |   |                                                           |   | (168                    | ) | (168                                                                             | ) |                         |   | (168                 | )
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Appropriation
        of net income                  |  |                                  |  |                                                |  |                                               |   | 489                                                       |   | (489                    | ) |                                                                                  |   |                         |   |                      |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Interim
        dividend current year                |  |                                  |  |                                                |  |                                               |   |                                                           |   | (100                    | ) | (100                                                                             | ) |                         |   | (100                 | )
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  
|Repurchase
        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                                           | ) | 1,068                                                     |   | 559                     |   | 3,262                                                                            |   | 17                      |   | 3,279                |  
|                                                     |  |                                  |  |                                                |  |                                               |   |                                                           |   |                         |   |                                                                                  |   |                         |   |                      |  

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

Notes to the consolidated cash flow statements

|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.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                               
|2 | See
      note 8 for additional information on cash flows related to
      our discontinued logistics business.                               
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|NOTES
        TO THE CONSOLIDATED
        FINANCIAL STATEMENTS
      GENERAL
        INFORMATION AND DESCRIPTION OF OUR BUSINESSTNT 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, New York, London and Frankfurt stock exchanges. On 20 February
        2006 we announced our intention to delist from the London and Frankfurt
        stock exchanges in the first half of 2006, as the costs and requirements
        for these listings are not justified by the low trading volume in our
        shares at both stock exchanges.
      In December
        2005 we announced a strategy to focus on our core competency of providing
        delivery services by expertly managing delivery networks. Based on our
        refined strategy we will now manage our business through two divisions:
        mail and express, with the express division including both our express
        and our freight management businesses. The mail segment primarily provides
        services for collecting, sorting, transporting and distributing domestic
        and international mail. The express segment provides demand door-to-door
        express delivery services for customers sending documents, parcels and
        freight worldwide. The freight management segment provides air and sea
        freight transportations by acquiring cargo space from airline and shipping
        firms.
      The
        majority of our former logistics division is reported as discontinued
        operations/assets held for sale. Consequently, in our balance sheet as
        at 31 December 2005 we have grouped together all assets and all liabilities
        relating to our discontinued logistics business. As prescribed by IFRS
        5, Non current assets held for sale and discontinued operations,
        our 31 December 2004 balance sheet has not been adjusted. In our statement
        of income for 2005, we have presented the net result of our discontinued
        logistics business on a separate line. Our 2004 statement of income has
        been adjusted for comparability purposes. Our 2005 and 2004 cash flow
        statements include cash flows and cash balances of our continuing operations.
      The
        consolidated financial statements have been authorised for issue by our
        Board of Management and our Supervisory Board on 24 February 2006 and
        are subject to adoption at the annual general meeting of shareholders
        on 20 April 2006.
      SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements for the year ended 31 December
        2005 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
        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 2005 are disclosed separately below.
      Our
        consolidated financial statements until 31 December 2004 were prepared
        in accordance with accounting principles generally accepted in the Netherlands
        (Dutch GAAP). Dutch GAAP differs in some areas from IFRS. In preparing
        our 2005 consolidated financial statements, management has amended certain
        accounting and valuation methods applied in the Dutch GAAP financial statements
        to comply with IFRS. The comparative figures for 2004 were adjusted to
        reflect these adjustments.
      Changes
        in accounting policies, reconciliations and descriptions of the effect
        of the transition from Dutch GAAP to IFRS on our balance sheet and on
        our statement of income for the period ended 31 December 2004 are included
        in the note Transition to International Financial Reporting Standards.
      All
        amounts included in the financial statements are presented in euros, unless
        indicated otherwise.
      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 consolidated entities. 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, book 2 of the Dutch Civil Code.
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|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, part 9, 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 on 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 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.
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|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 cash
          generating units fair value less costs to sell and its value in
          use using the discounted cash flow method by including additions in
          property, plant and equipment to cover forecast growth. Impairments
          on goodwill recognised in prior periods can not be reversed.
        For the purpose
          of assessing impairment, corporate assets and liabilities are allocated
          to specific cash generating units before impairment testing. The basis
          for this allocation is to the extent in which those assets or liabilities
          contribute to the future cash flows of the unit under review.
        SOFTWARE AND 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. 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, where we have substantially all the risks and rewards
          of ownership are classified as finance leases. 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
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|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 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 liabilities not
          held for trading purposes.
        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 documents its 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 forecast
          sale that is hedged takes place). However, when the forecast 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 when the forecast transaction
          is ultimately recognised in the income statement. When a forecast 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
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|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 recognised
          in the income statement on equity instruments are not reversed through
          the income statement.
        InventoriesInventories 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 cost. 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.
        Non-current assets
          held for sale and discontinued operationsNon-current assets (or disposal groups) held for sale
          are classified as assets held for sale and stated at the lower of their
          carryingamount
          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.
        Shareholders
          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.
        Employee benefit
          obligationsPOST-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.
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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. TERMINATION BENEFITSTermination 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 demonstrably 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. OTHER LONG TERM EMPLOYEE
    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. 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.




Provisions
    Provisions 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 increases specific to
    the liability. Provisions for onerous contracts are recorded when the 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. Income taxes
    The 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 in the foreseeable future. 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. Losses are recorded when probable. 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.


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|Chapter
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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 SALES
    Net sales represent the revenues from the delivery of goods and services to
    third parties less discounts, credit notes and taxes levied on sales. OTHER OPERATING REVENUES
    Other operating revenues include revenues that do not arise from our normal
    operations and mainly include rental income from temporarily leased-out property. Other income
    Other income includes net gains from the sale of property, plant and equipment
    and other gains. 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 statement
    The 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 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.




Segment
  reporting
  We 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 three reportable
  segments: mail, express and freight management. The secondary reporting format
  is geographically based. Business relations between the companies within the
  segments of TNT are transacted at arms length prices.


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|Financial
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ADOPTION
    OF IAS 32 AND IAS 39 Effective 1
    January 2005, we adopted IAS 32, Financial Instruments: Disclosure and
    Presentation, and IAS 39, Financial Instruments: Recognition and measurement.
    The following table summarises the effects of adopting these two IAS pronouncements
    as at 1 January 2005:







|                                                                |  |                     |  |                   |   |                   | 
|--------------------------------------------------------------- |  | ------------------- |  | ----------------- | - | ----------------- | 
|                                                                |  | 31
        December |  | Adoption          |   | 1
        January | 
|                                                                |  | 2004
        IFRS   |  | IAS
        32/39 |   | 2005
        IFRS | 
|                                                                |  |                     |  |                   |   |                   | 
|Non-current assets                                              |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Intangible assets                                               |  | 2,643               |  |                   |   | 2,643             | 
|                                                                |  |                     |  |                   |   |                   | 
|Property, plant and
      equipment                             |  | 1,924               |  |                   |   | 1,924             | 
|                                                                |  |                     |  |                   |   |                   | 
|Financial fixed assets                                          |  | 503                 |  | (3                | ) | 500               | 
|                                                                |  |                     |  |                   |   |                   | 
|Total non-current
          assets                              |  | 5,070               |  | (3                | ) | 5,067             | 
|                                                                |  |                     |  |                   |   |                   | 
|Current assets                                                  |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Inventory                                                       |  | 46                  |  |                   |   | 46                | 
|                                                                |  |                     |  |                   |   |                   | 
|Accounts receivable                                             |  | 2,089               |  |                   |   | 2,089             | 
|                                                                |  |                     |  |                   |   |                   | 
|Prepayments and accrued
      income                            |  | 391                 |  | 2                 |   | 393               | 
|                                                                |  |                     |  |                   |   |                   | 
|Cash and cash equivalents                                       |  | 633                 |  | 46                |   | 679               | 
|                                                                |  |                     |  |                   |   |                   | 
|Total current assets                                            |  | 3,159               |  | 48                |   | 3,207             | 
|                                                                |  |                     |  |                   |   |                   | 
|Assets held for sale                                            |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Total assets                                                    |  | 8,229               |  | 45                |   | 8,274             | 
|                                                                |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Total equity                                                    |  | 3,344               |  | (268              | ) | 3,076             | 
|                                                                |  |                     |  |                   |   |                   | 
|Total non-current
      liabilities                             |  | 2,221               |  | 8                 |   | 2,229             | 
|                                                                |  |                     |  |                   |   |                   | 
|Current liabilities                                             |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Trade accounts payable                                          |  | 670                 |  |                   |   | 670               | 
|                                                                |  |                     |  |                   |   |                   | 
|Short term provisions                                           |  | 49                  |  |                   |   | 49                | 
|                                                                |  |                     |  |                   |   |                   | 
|Other current liabilities                                       |  | 637                 |  | 309               |   | 946               | 
|                                                                |  |                     |  |                   |   |                   | 
|Accrued current liabilities                                     |  | 1,308               |  | (4                | ) | 1,304             | 
|                                                                |  |                     |  |                   |   |                   | 
|Total current liabilities                                       |  | 2,664               |  | 305               |   | 2,969             | 
|                                                                |  |                     |  |                   |   |                   | 
|Liabilities related
      to assets classified as held for sale |  |                     |  |                   |   |                   | 
|                                                                |  |                     |  |                   |   |                   | 
|Total liabilities
      and equity                              |  | 8,229               |  | 45                |   | 8,274             | 
|                                                                |  |                     |  |                   |   |                   | 
|(in € millions)                                                 |  |                     |  |                   |   |                   | 

The €309 million
    increase in other current liabilities includes €259 million related to
    our commitment to purchase our ordinary shares from the State of the Netherlands
    on 5 January 2005. As at 31 December 2004 this transfer of legal ownership
    was included in equity. As required under IAS 32 the amount has been classified
    as a financial instrument and is included in other current liabilities. The increase in other
    current liabilities also includes €46 million related to the separate
    presentation of our bank overdrafts. Under IAS 32 it is not permitted to offset
    our bank overdrafts with our cash and cash equivalents, if there is no legal
    enforceable right and intention to settle the balances simultaneously. In connection with
      the acquisition of our 51% interest in TNT Arvil, we granted a put option
      to the minority shareholder,




Ecotrans. Ecotrans has
    the right to sell their shares in TNT Arvil based on a price that has been
    determined in the shareholders agreement. Under the put option, the
    price at which the 49% shares can be sold to us includes a premium rate over
    the value at which the estimated price the option shares would be trading
    if TNT Arvil were a publicly traded company. This was deemed to be the fair
    market value. On adoption of IAS 39, Financial Instruments: Recognition
    and Measurement, we are required to reflect the fair value on our balance
    sheet. The fair value was estimated at €9 million and is included in
    total non-current liabilities. The remaining adjustments
    relate to the IAS 39 accounting change from cost accounting to fair value
    accounting and to accounting at amortised cost for all outstanding financial
    instruments.


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|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.
        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. We do not expect the adoption of IFRIC 4 to have a material
          impact on our financial statements.
        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 and we are currently evaluating the impact of
          adopting the amendments.
        CRITICAL
          ACCOUNTING
          ESTIMATES AND JUDGEMENTSThe 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 accounted for all our business combinations 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. |  | 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 impacton 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
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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 to our customers
  (for example, sales for Christmas greetings in November and December). 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 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. 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, liquidity risk and cash flow 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 Canadian
  dollar. Significant acquisitions are usually funded in the currency of the underlying
  assets. Main exchange
        rates
      Year
          end closing1
      
      Annual
          average2British pound
    0.6853
    
    0.6832US dollar
    1.1797
    
    1.2396Chinese yuan
    9.5204
    
    10.1457Canadian dollar
    1.3726
    
    1.4989 1
    Source: European Central
      Bank, reference rates on the last day of the year.2
    The annual average
      is calculated as the 12-month's average of the month-end closing rates of
      the European Central Bank.


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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 €54
    million and €69 million for 2005 and 2004. Commodity riskWe lease and own a fleet of vehicles and aircraft 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 2005, 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, Group Treasury aims
  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 decrease in fair value resulting
    from a hypothetical 10% increase from current market interest rates would
    have been approximately €15 million and €11 million for 2005 and
    2004, respectively. This analysis assumes a parallel shift in each currencys
    yield curve of interest rates. TRANSITION
      TO INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN
      UNIONOur financial statements for the year ended 31 December 2005
    are the first annual financial statements that comply with IFRS as adopted
    by the EU. References to IFRS Standards throughout this document refer to
    the application of IAS and related Interpretations of IFRIC and Interpretations
    of the SIC. We have applied IFRS 1, First-time Adoption of International
    Financial Reporting Standards, in preparing these consolidated financial
    statements. Since TNT is also listed on the New York Stock Exchange, it has
    to meet the requirements of the SEC. On 13 April 2005 the SEC adopted amendments
    to Form 20-F for foreign private issuers related to the first time adoption
    of IFRS. Under this amendment TNT is permitted to provide only one year of
    comparative IFRS balances in the consolidated financial statements for the
    year 2005. Our transition date to
    IFRS is 1 January 2004. We prepared our opening IFRS balance sheet at that
    date. The reporting date of these consolidated financial statements is 31
    December 2005 and our IFRS adoption date is 1 January 2005. In preparing
    these consolidated financial statements in accordance with IFRS 1, we have
    applied the mandatory exceptions and certain of the optional exemptions from
    full retrospective application of IFRS. We have elected to apply
    the following optional exemptions from full retrospective application: Business combinations
    exemptionWe have applied the business combinations exemption
            in IFRS 1. We have not restated business combinations that took place
            prior to the 1 January 2004 transition date. Employee benefits
    exemptionUntil 31 December 2004 we applied SFAS 87, Employers accounting
    for pensions, as permitted under Dutch GAAP. As permitted under IFRS 1,
    we have elected to recognise all cumulative actuarial gains and losses as
    at 1 January 2004. The unrecognised prior year service costs reported under
    SFAS 87 at the date of transition to IFRS are treated as a curtailment result
    under IAS 19 and have been adjusted against shareholders equity. Cumulative translation
    differences exemptionWe have elected to set the previously accumulated cumulative
    translation to zero at 1 January 2004. This exemption has been applied to
    all subsidiaries in accordance with IFRS 1. As a




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      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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result the gain or loss
    on a subsequent disposal of any foreign operation shall exclude translation
    differences that arose prior to 1 January 2004 and shall include translation
    differences that will arise subsequent to this date. Exemption from restatement
    of comparatives for IAS 32 and IAS 39We have elected to apply this exemption. We apply previous
    GAAP rules to derivatives, financial assets and financial liabilities and
    to hedging relationships for the 2004 comparative information. The adjustments
    required for differences between previous GAAP and IAS 32 and IAS 39 are determined
    and recognised at 1 January 2005. Designation of financial
    assets and financial liabilities exemptionWe have reclassified various securities as available-for-sale
    investments and as financial assets at fair value through profit and loss.
    The adjustments relating to IAS 32 and IAS 39 at the opening balance sheet
    date of 1 January 2005, the IAS 32/39 transition date, are detailed in Note
    Adoption of New IFRS Pronouncements. Share based payment
    transaction exemptionWe have elected to apply the share based payment exemption.
    We have applied IFRS 2 from 1 January 2004 to those options that were issued
    after 7 November 2002 but that have not vested by 1 January 2005. Fair value measurement
    of financial assets or liabilities at initial recognitionWe have not applied the exemption offered by the revision of
    IAS 39 on the initial recognition of the financial instruments measured at
    fair value through profit and loss where there is no active market. This exemption
    is therefore not applicable. Assets held for sale
    and discontinued operations exemptionAlthough the effective date for adopting IFRS 5, Assets
    Held for Sale and Discontinued Operations Exception, was 1 January 2005,
    as permitted under IFRS 5, we have applied the requirements of IFRS 5 prospectively
    from 1 January 2004. Assets held for sale or discontinued operations are recognised
    in accordance with IFRS 5 from 1 January 2004. We have applied the following
    mandatory exceptions from retrospective application: Derecognition of financial
    assets and liabilities exceptionFinancial assets and liabilities derecognised before 1 January
    2004 are not rerecognised under IFRS. The application of the exemption from
    restating comparatives for IAS 32 and IAS 39 means that we recognised from
    1 January 2005 any financialassets
    and financial liabilities derecognised since 1 January 2004 that do not meet
    the IAS 39 derecognition criteria. Management did not choose to apply the
    IAS 39 derecognition criteria to an earlier date.




Hedge accounting exceptionManagement has claimed hedge accounting from 1 January 2005
    only if the hedge relationship meets all hedge accounting criteria under IAS
    39. Estimates exceptionEstimates under IFRS at 1 January 2004 should be consistent
    with estimates made for the same date under previous GAAP, unless there is
    evidence that those estimates were in error. Reconciliation between
    Dutch GAAP and IFRSThe following reconciliation provides a quantification of the
    effect of the transition from Dutch GAAP to IFRS as at 1 January 2004: Balances at 1 January
        2004
      
      Minority
        interests
      
      Equity
        holders
          of
        the
          parent
      
      Total
        EquityUnder Dutch GAAP
      
      17
      
      2,969
      
      2,986Discounting provisions
      
      
      
      1
      
      1Other employee benefits
      
      
      
      (35
      )
      (35
      )Employee benefits
        pensions
      
      
      
      47
      
      47Other
      
      
      
      (1
      )
      (1
      )Under IFRS
      
      17
      
      2,981
      
      2,998(in € millions)  The following reconciliations
    provide a quantification of the reconciling items between Dutch GAAP and IFRS
    as at and for the year ended 31 December 2004:


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|2005
        Annual Report and Form 20-F |  | 127
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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|                                                                                                                                                                   |                    |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | ---------
|**Consolidated
      balance sheets at 31 December 2004**                                                                                                          | Dutch
        GAAP |          
|                                                                                                                                                                  
|**Non-Current
      assets**                                                                                                                                       |                    |          
|                                                                                                                                                                  
|Intangible assets                                                                                                                                                  |                    |          
|                                                                                                                                                                  
|Goodwill                                                                                                                                                           |                    | 2,375    
|                                                                                                                                                                  
|Other intangible assets                                                                                                                                            |                    | 128      
|                                                                                                                                                                   |                   
|                                                                                                                                                                   |                    | 2,503    
|                                                                                                                                                                  
|**Property, plant
      and equipment**                                                                                                                            |                    |          
|                                                                                                                                                                  
|Land and buildings                                                                                                                                                 |                    | 960      
|                                                                                                                                                                  
|Plant and equipment                                                                                                                                                |                    | 464      
|                                                                                                                                                                  
|Other                                                                                                                                                              |                    | 453      
|                                                                                                                                                                  
|Construction in progress                                                                                                                                           |                    | 47       
|                                                                                                                                                                   |                   
|                                                                                                                                                                   |                    | 1,924    
|                                                                                                                                                                  
|**Financial fixed
      assets**                                                                                                                                   |                    |          
|                                                                                                                                                                  
|Investments in associates                                                                                                                                          |                    | 82       
|                                                                                                                                                                  
|Loans receivable from
      associates                                                                                                                             |                    | 2        
|                                                                                                                                                                  
|Other loans receivable                                                                                                                                             |                    | 21       
|                                                                                                                                                                  
|Deferred tax assets                                                                                                                                                |                    |          
|                                                                                                                                                                  
|Prepayments and accrued
      income                                                                                                                               |                    | 551      
|                                                                                                                                                                  
|                                                                                                                                                                   |                    | **656**  
|                                                                                                                                                                   |                   
|Total non-current
      assets                                                                                                                                     |                    | 5,083    
|                                                                                                                                                                  
|Current assets                                                                                                                                                     |                    |          
|                                                                                                                                                                  
|Inventory                                                                                                                                                          |                    | 46       
|                                                                                                                                                                  
|Accounts receivable                                                                                                                                                |                    | 2,129    
|                                                                                                                                                                  
|Prepayments and accrued
      income                                                                                                                               |                    | 391      
|                                                                                                                                                                  
|Cash and cash equivalents                                                                                                                                          |                    | 633      
|                                                                                                                                                                   |                   
|Total current assets                                                                                                                                               |                    | 3,199    
|                                                                                                                                                                  
|Assets held for sale                                                                                                                                               |                    |          
|                                                                                                                                                                  
|**Total assets**                                                                                                                                                   |                    | **8,282**
|                                                                                                                                                                  
|Equity                                                                                                                                                             |                    |          
|                                                                                                                                                                  
|Equity holders of the
      parent                                                                                                                                 |                    | 2,765    
|                                                                                                                                                                  
|Minority interests                                                                                                                                                 |                    | 19       
|                                                                                                                                                                  
|**Total equity**                                                                                                                                                   |                    | **2,784**
|                                                                                                                                                                  
|**Non-current
      liabilities**                                                                                                                                  |                    |          
|                                                                                                                                                                  
|Deferred tax liabilities                                                                                                                                           |                    | 218      
|                                                                                                                                                                  
|Provisions for pension
      liabilities                                                                                                                           |                    | 870      
|                                                                                                                                                                  
|Other employee benefit
      obligations                                                                                                                           |                    |          
|                                                                                                                                                                  
|Other provisions                                                                                                                                                   |                    | 149      
|                                                                                                                                                                  
|Long term debt                                                                                                                                                     |                    | 1,440    
|                                                                                                                                                                  
|Accrued liabilities                                                                                                                                                |                    | 206      
|                                                                                                                                                                   |                   
|Total non-current
      liabilities                                                                                                                                |                    | 2,883    
|                                                                                                                                                                  
|Current Liabilities                                                                                                                                                |                    |          
|                                                                                                                                                                  
|Trade accounts payable                                                                                                                                             |                    | 670      
|                                                                                                                                                                  
|Short term provisions                                                                                                                                              |                    |          
|                                                                                                                                                                  
|Other current liabilities                                                                                                                                          |                    | 637      
|                                                                                                                                                                  
|Accrued current liabilities                                                                                                                                        |                    | 1,308    
|                                                                                                                                                                  
|**Total current
      liabilities**                                                                                                                                |                    | **2,615**
|                                                                                                                                                                  
|Liabilities related
      to assets classified                                                                                                                     |                    |          
|as held for sale                                                                                                                                                   |                    |          
|                                                                                                                                                                   |                   
|Total liabilities
      and equity                                                                                                                                 |                    | 8,282    
|                                                                                                                                                                  
|(in € millions)                                                                                                                                                    |                    |          
|1 Certain
      balances have been reclassified in our consolidated balance sheets as at
      31 December 2004 to conform with our 31 December 2005 presentation.



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|128 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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|           | Consolidated statements
      of income for the year ended 31 December 2004 |  | Dutch
        GAAP |  | Goodwill
      amortisation (c) |   | Intangible
      assets
        (c) |   | Share
        based
      compensation
        (g) |   | Other
      employee
        benefits (d) |   | Employee
      benefits
        pensions (e) |   | Other
      (h) |       | Transition
      effect
        IFRS |       | IFRS       |   | Discontinued
      operations
        2 |       | IFRS
      continuing
        operations |  
|---------- | --------------------------------------------------------------------------- |  | ------------------ |  | ------------------------------- | - | ----------------------------------- | - | -------------------------------------------------- | - | ----------------------------------------- | - | -------------------------------------------- | - | --------------- | ----- | ------------------------------------ | ----- | ---------- | - | --------------------------------------- | ----- | ---------------------------------------- | -
|           |                                                                             |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       |            |   |                                         |       |                                          |  
|           | Net sales                                                                   |  | 12,585             |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | 12,585     |   | (3,508                                  | )1    | 9,077                                    |  
|           |                                                                             | 
|           | Other operating revenues                                                    |  | 50                 |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   | (8              | )     | (8                                   | )     | 42         |   | (13                                     | )     | 29                                       |  
|           |                                                                             | 
|           | Total revenues                                                              |  | **12,635**         |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   | **(8**          | **)** | **(8**                               | **)** | **12,627** |   | **(3,521**                              | **)** | **9,106**                                |  
|           |                                                                             | 
|           | Other income                                                                |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   | **8**           |       | **8**                                |       | **8**      |   |                                         |       | **8**                                    |  
|           |                                                                             | 
|           | Cost of materials                                                           |  | (600)              |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | (600       | ) | 258                                     |       | (342                                     | )
|           |                                                                             | 
|           | Work contracted out
      and other external expenses                       |  | (5,262)            |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   | 1               |       | 1                                    |       | (5,261     | ) | 1,7041                                  |       | (3,557                                   | )
|           |                                                                             | 
|           | Salaries and social
      security contributions                            |  | (4,305)            |  |                                 |   |                                     |   | (6                                                 | ) | (4                                        | ) | (57                                          | ) | 1               |       | (66                                  | )     | (4,371     | ) | 1,123                                   |       | (3,248                                   | )
|           |                                                                             | 
|           | Depreciation, amortisation
      and impairments                            |  | (533)              |  | 146                             |   | (6                                  | ) |                                                    |   |                                           |   |                                              |   |                 |       | 140                                  |       | (393       | ) | 90                                      |       | (303                                     | )
|           |                                                                             | 
|           | Other operating expenses                                                    |  | (761)              |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | (761       | ) | 213                                     |       | (548                                     | )
|           |                                                                             | 
|           | Total operating
      expenses                                              |  | (11,461)           |  | 146                             |   | (6                                  | ) | (6                                                 | ) | (4                                        | ) | (57                                          | ) | 2               |       | 75                                   |       | (11,386    | ) | 3,388                                   |       | (7,998                                   | )
|           |                                                                             |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       |            |   |                                         |       |                                          |  
|           |                                                                             |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       |            |   |                                         |       |                                          |  
|           | Operating income                                                            |  | 1,174              |  | 146                             |   | (6                                  | ) | (6                                                 | ) | (4                                        | ) | (57                                          | ) | 2               |       | 75                                   |       | 1,249      |   | (133)                                   |       | 1,116                                    |  
|           |                                                                             | 
|           | Interest and similar
      income                                           |  | 37                 |  |                                 |   |                                     |   |                                                    |   | (1                                        | ) |                                              |   |                 |       | (1                                   | )     | 36         |   | 63                                      |       | 99                                       |  
|           |                                                                             | 
|           | Interest and similar
      expense                                          |  | (114)              |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | (114       | ) | (3                                      | )     | (117                                     | )
|           |                                                                             | 
|O
      22 | Net financial (expense)/income                                              |  | (77)               |  |                                 |   |                                     |   |                                                    |   | (1                                        | ) |                                              |   |                 |       | (1                                   | )     | (78        | ) | 60                                      |       | (18                                      | )
|           |                                                                             | 
|           | Results from investments
      in associates                                |  | (3)                |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | (3         | ) | 1                                       |       | (2                                       | )
|           |                                                                             | 
|           | Profit before income
      taxes                                            |  | 1,094              |  | 146                             |   | (6                                  | ) | (6                                                 | ) | (5                                        | ) | (57                                          | ) | 2               |       | 74                                   |       | 1,168      |   | (72                                     | )     | 1,096                                    |  
|           |                                                                             | 
|           | Income taxes                                                                |  | (428)              |  | (11                             | ) |                                     |   |                                                    |   | 2                                         |   | 19                                           |   | (1              | )     | 9                                    |       | (419       | ) | 44                                      |       | (375                                     | )
|           |                                                                             | 
|O
      8  | Profit for the period
      from continuing operations                      |  | 666                |  | 135                             |   | (6                                  | ) | (6                                                 | ) | (3                                        | ) | (38                                          | ) | 1               |       | 83                                   |       | 749        |   | (28                                     | )     | 721                                      |  
|           |                                                                             | 
|           | Profit/(loss) from
      discontinued operations                            |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       |            |   | 31                                      |       | 31                                       |  
|           |                                                                             | 
|           | Profit for the period                                                       |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | 749        |   | 3                                       |       | 752                                      |  
|           |                                                                             | 
|           | Attributable to:                                                            |  |                    |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       |            |   |                                         |       |                                          |  
|           |                                                                             | 
|           | Minority interests                                                          |  | (1)                |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   | (2              | )     | (2                                   | )     | (3         | ) | 3                                       |       |                                          |  
|           |                                                                             | 
|           | Shareholders                                                                |  | 667                |  | 135                             |   | (6                                  | ) | (6                                                 | ) | (3                                        | ) | (38)                                         |   | 3               |       | 85                                   |       | 752        |   |                                         |       | 752                                      |  
|           |                                                                             | 
|           | Earnings per ordinary
      share (in € cents)                              |  | 140.9              |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | 158.9      |   |                                         |       | 158.9                                    |  
|           |                                                                             | 
|           | Earnings per diluted
      ordinary share (in € cents)                      |  | 140.7              |  |                                 |   |                                     |   |                                                    |   |                                           |   |                                              |   |                 |       |                                      |       | 158.7      |   |                                         |       | 158.7                                    |  
|           |                                                                             | 

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

|Explanation of
        the effect of the transition to IFRSThe following explains the material adjustments to the balance sheet
        and income statement.
      (A) RECLASSIFICATION
        OF DEFERRED TAXES
        Based on IAS 1, Presentation of Financial Statements, we have reclassified
        deferred taxes from current assets to non-current financial fixed assets
        for an amount of €37 million in our IFRS opening balance sheet as
        at 1 January 2004 and of €40 million as at 31 December 2004. Furthermore,
        as at 1 January 2004 and 31 December 2004, we have separately presented
        the total amount of deferred tax assets amounting to €205 million
        and €395 million, respectively. |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 



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        Annual Report and Form 20-F |  | 129
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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|(B) RECLASSIFICATION
        OF CURRENT PROVISIONS
        As required under IAS 37, Provisions, Contingent Liabilities and Contingent
        Assets, we have reclassified the current part of provisions to current
        liabilities amounting to €49 million in the IFRS opening balance
        sheet as at 1 January 2004 and €49 million as at 31 December 2004.
        The impact on other provisions of discounting leads to a reduction of
        €2 million in the IFRS opening balance sheet at 1 January 2004, taking
        into account a deferred tax liability of €1 million.
      (C) GOODWILL AND
        OTHER INTANGIBLE ASSETS
        IFRS 3, Business Combinations, prohibits merger accounting and
        the amortisation of goodwill. The carrying amount of goodwill as at 1
        January 2004 is equal to the carrying amount of goodwill previously reported
        under Dutch GAAP and amortisation previously reported under Dutch GAAP
        for 2004 has been reversed for IFRS purposes. Increase in goodwill balance
        reflects this reversal of goodwill amortisation charge of €146 million,
        partly offset by the recognition of additional intangible assets of €96
        million. The associated tax impact on the reversal of goodwill amortisation
        amounts to €11 million in 2004.
      Any intangible asset
        that can be separately identified in a business combination in accordance
        with IAS 38, Intangible Assets, has been capitalised separately
        rather than being part of goodwill. This is applicable for all our business
        combinations after 1 January 2004. Other intangible assets increased as
        a result of the recognition of €96 million of other intangible assets
        from the acquisitions of Wilson, Ventana and Overtrans, offset by €6
        million of amortisation expenses during 2004.
      (D) OTHER EMPLOYEE
        BENEFIT OBLIGATIONS
        As at 31 December 2004 and as at 1 January 2004, other employment benefit
        obligations increased by €41 million and by €43 million respectively.
        The increase is mainly due to recognising jubilee payments and applying
        the requirements of IAS 19, Employee benefits, to other post-employment
        plans. The effect of discounting of the related assets is €11 million
        as at 1 January 2004 and as at 31 December 2004. The net equity impact
        on the adjustment related to the other post-employment benefit obligations
        was €35 million as at 1 January 2004 and €34 million as at 31
        December 2004, taking into account a deferred tax asset of €19 million
        as at 1 January 2004 and €18 million as at 31 December 2004.
      The operating profit
        impact of the transition to IFRS in 2004 is an additional charge of €4
        million, with a related tax credit of €1 million.
      (E) EMPLOYEE BENEFITS
         PENSIONS
        The employee benefit obligations decreased by €71 million in our
        IFRS opening balance sheet as at 1 January 2004 and decreased by €18
        million as at 31 December 2004. The corresponding impact on equity in
        our IFRS opening balance sheet amounts to €47 million (31 December
        2004: €11 million), taking into account a deferred tax liability
        of €24 million (31 December 2004: €7 million). |  | The operating profit
        impact of the transition to IFRS in 2004 is an additional charge of €57
        million, with a related tax credit of €19 million.
      (F) MINIMUM PENSION
        LIABILITY
        In accordance with the requirements of SFAS 87, Employers Accounting
        for Pensions, we recognised in our 2004 financial statements an additional
        minimum pension liability of €654 million representing a net loss
        that under SFAS 87 is not yet to be recognised as net periodic pension
        cost, but is to be reported as a reduction of equity, net of taxes. IAS
        19 does not require us to account for an additional minimum pension liability
        for situations in which the accumulated benefit obligation exceeds the
        fair value of the plan assets. As a result, the additional minimum pension
        liability has been reversed in the IFRS balance sheet as at 31 December
        2004. Accordingly, the provision for pensions was reduced by €654
        million, equity increased by €454 million and the deferred tax assets
        decreased by €200 million as at 31 December 2004.
      (G) SHARE BASED PAYMENT
        In accordance with IFRS 2, Share Based Payment, we have recognised
        a charge to income representing the fair value of outstanding employee
        share options granted to certain employees (senior management and Board
        of Management) in accordance with our share based compensation plans.
        The operating profit impact of the transition to IFRS in 2004 is an additional
        charge of €6 million.
      (H) OTHER 
        In conformity with IAS 16, Property, plant and equipment, gains
        arising from the sale of property, plant and equipment shall not be classified
        as revenue, but as other income. In the 2004 IFRS income statement €8
        million was reclassified from other operating revenue to other income.
      (I) CASH FLOWS
        The differences between cash flows presented in accordance with Dutch
        GAAP and under IFRS relate mainly to the adjustments to profit before
        taxes with respect to employee benefits of €57 million and ceasing
        of amortisation of goodwill of €146 million.
      Subsequent events
        For information relating to subsequent events reference is made to note
        45.
      Service concession
        arrangements
        For information relating to our postal concession, reference is made to
        note 46.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 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|130 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

NOTES
  TO THE CONSOLIDATED BALANCE SHEETS

O
  1INTANGIBLE ASSETS: 1,838 MILLION (2004: 2,643)

|                                                  |          
|------------------------------------------------- | ---------
|Statement
        of changes in intangible assets | Goodwill 
|                                                  |          
|Amortisation percentage                           |          
|                                                  |          
|Historical cost                                   | 3,196    
|                                                  |          
|Accumulated amortisation
      and impairments    | (887     
|                                                  |          
|Balance at 1 January
      2004                   | 2,309    
|                                                  |          
|Changes in 2004                                   |          
|                                                  |          
|Additions                                         | 169      
|                                                  |          
|Disposals                                         | (22      
|                                                  |          
|(De)consolidation                                 |          
|                                                  |          
|Internal transfers/reclassifications              |          
|                                                  |          
|Amortisation and impairments                      |          
|                                                  |          
|Exchange rate differences                         | (31      
|                                                  |          
|Total changes                                     | 116      
|                                                  |          
|Historical cost                                   | 3,280    
|                                                  |          
|Accumulated amortisation
      and impairments    | (855     
|                                                  |          
|Balance at 31 December
      2004                 | 2,425    
|                                                  |          
|Changes in 2005                                   |          
|                                                  |          
|Additions                                         | 26       
|                                                  |          
|Disposals                                         | (5       
|                                                  |          
|(De)consolidation                                 |          
|                                                  |          
|Transfers to assets
      held for sale           | (812     
|                                                  |          
|Internal transfers/reclassifications              |          
|                                                  |          
|Amortisation and impairments                      |          
|                                                  |          
|Exchange rate differences                         | (8       
|                                                  |          
|Total changes                                     | (799     
|                                                  |          
|Historical cost                                   | 2,139    
|                                                  |          
|Accumulated amortisation
      and impairments    | (513     
|                                                  |          
|**Balance at
      31 December 2005**             | **1,626**
|                                                  |          
|(in € millions,
      except percentages)         |          



Intangible assets as at
    31 December 2005 of €895 million related to our discontinued logistics
    business is 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, including goodwill generated from the acquisition
    of TNT and GD Express Worldwide, is allocated to the applicable cash generating
    units (CGUs). Of the total goodwill balance of €1,626 million, we have
    allocated €1,201 million to our Express Europe CGU, €152 million
    to our combined CGU European Mail Networks,
    €140 million to our Freight




Management CGU, €70 million to our other
    express CGUs and €62 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 10-year period.
    TNTs management has demonstrated that its cash flow projections have
    been reliable in the past. The value beyond the 10-year period is determined
    using a sector specific multiple. 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 the forecasts included
    in industry reports. The discount rates used in the CGU valuations vary from
    7% to 8% to reflect specific risks relating to the relevant segments.




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        Annual Report and Form 20-F |  | 131
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

Software balance includes
    internally generated software with a book value of €103 million at 31
    December 2005 (2004: 82). Other intangible assets mainly relate to customer
    lists of €75 million (2004: 92) and software under construction of €8
    million (2004: 16). The estimated amortisation
    expenses for software and other intangibles for the subsequent five years
    are 2006: €20 million, 2007: €35 million, 2008: €23 million,
    2009: €16




million, 2010: €10
    million and after 2011: €108 million. Of the additions in software, €37
    million related to selfproduced software. Additions to other intangible assets
    include €7 million related to software licences. We do not conduct research
    and development, in the narrow sense, comparable with the normal activities
    in this area. Therefore we do not incur research and development costs in
    the narrow sense.




O
  2PROPERTY, PLANT AND EQUIPMENT: 1,552 MILLION
  (2004: 1,924)

|                                                              |                                 
|------------------------------------------------------------- | --------------------------------
|Statement
        of changes in property, plant and equipment | Land
        and
      buildings
|                                                              |                                 
|Depreciation percentage                                       | 0%
      -10                    
|                                                              |                                 
|Historical cost                                               | 1,482                           
|                                                              |                                 
|Accumulated depreciation
      and impairments                | (510                            
|                                                              |                                 
|Balance at 1 January
      2004                               | 972                             
|                                                              |                                 
|Changes in 2004                                               |                                 
|                                                              |                                 
|Capital expenditure                                           | 22                              
|                                                              |                                 
|Acquisitions                                                  | 2                               
|                                                              |                                 
|Disposals                                                     | (7                              
|                                                              |                                 
|Exchange rate differences                                     | (7                              
|                                                              |                                 
|Net additions/disposals                                       | 10                              
|                                                              |                                 
|Depreciation and impairments                                  | (71                             
|                                                              |                                 
|Transfers and other
      changes                             | 49                              
|                                                              |                                 
|Total changes                                                 | (12                             
|                                                              |                                 
|Historical cost                                               | 1,524                           
|                                                              |                                 
|Accumulated depreciation
      and impairments                | (564                            
|                                                              |                                 
|Balance at 31 December
      2004                             | 960                             
|                                                              |                                 
|Changes in 2005                                               |                                 
|                                                              |                                 
|Capital expenditure                                           | 24                              
|                                                              |                                 
|Acquisitions                                                  |                                 
|                                                              |                                 
|Disposals                                                     | (2                              
|                                                              |                                 
|Exchange rate differences                                     | 9                               
|                                                              |                                 
|Net additions/disposals                                       | 31                              
|                                                              |                                 
|Depreciation and impairments                                  | (61                             
|                                                              |                                 
|Transfers to assets
      held for sale                       | (161                            
|                                                              |                                 
|Transfers and other
      changes                             | 36                              
|                                                              |                                 
|Total changes                                                 | (155                            
|                                                              |                                 
|Historical cost                                               | 1,360                           
|                                                              |                                 
|Accumulated depreciation
      and impairments                | (555                            
|                                                              |                                 
|Balance at 31 December
      2005                             | 805                             
|                                                              |                                 
|(in € millions,
      except percentages)                     |                                 



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|132 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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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 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 2005 of these assets contributed
    to our company on 1 January 1989 is €100 million (2004: 103), net of
    accumulated depreciation of €221 million (2004: 287).




Aircraft, including spare
    parts, are classified as other property, plant and equipment. Aircraft and
    (spare) engines are depreciated on a straight-line basis over their useful
    lives to estimated residual values of 20%. Depending on the type of aircraft,
    the useful life 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. The book
    value of aircraft including spare parts is €221 million (2004: 243),
    comprising a historical cost of €375 million (2004: 371) with accumulated
    depreciation €154 million (2004: 128). All 43 aircraft (2004:42) are
    operated by the express business. Included in the property,
    plant and equipment balance as at 31 December 2005 are:




|                    |                           
|------------------- | --------------------------
|                    | Land
        and buildings
|                    |                           
|Under finance lease | **25**                    
|                    |                           
|Mail                | 10                        
|                    |                           
|Express             | 15                        
|                    |                           
|Freight management  |                           
|                    |                           
|Pledged as security | **33**                    
|                    |                           
|Mail                |                           
|                    |                           
|Express             | 33                        
|                    |                           
|Freight management  |                           
|                    |                           
|(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
    (2004: 9), 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 €15 million (2004: 16), comprising a historical
    cost of €19 million with accumulated depreciation of €4 million. There are no existing
    contracts for lease hold and ground rents longer than 20 years or contracts
    with indefinite terms. Lease hold rights and ground rent for land and buildings
    are mainly in Belgium for €11 million and in the Netherlands for €10
    million. The property, plant and
    equipment of €33 million (2004: 48) which are pledged as security to
    third parties are 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
    capitalised borrowing costs in the capital expenditure of property, plant
    and equipment in 2005 and 2004. There are no material
    temporarily idle property, plant and equipment (2004: 4) on 31 December 2005.
    The gross carrying amount of fully depreciated property, plant and equipment
    that is still in use is €322 million (2004: 261) of which €280 million
    (2004: 232) is related to plant and equipment, €42 million (2004: 29)
    is related to land and buildings.




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        Annual Report and Form 20-F |  | 133
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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O
  3FINANCIAL FIXED ASSETS: 273 MILLION (2004: 503)

|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|------------------------------------------------------ | -------------------------------- | - | ------------------------------------ | - | --------------------------------- | - | -------------------------------------- | - | ----- | -
|Statement
        of changes in financial fixed assets | Investments
        inassociates |   | Other
        loans
      receivable |   | Deferred
        tax
      assets |   | Prepayments
        and accrued income |   | Total |  
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Balance at 31 December
      2004                      | 84                               |   | 21                                   |   | 253                               |   | 145                                    |   | 503   |  
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Adoption of IAS 32/39                                  |                                  |   |                                      |   |                                   |   | (3                                     | ) | (3    | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Balance at 1 January
      2005                        | 84                               |   | 21                                   |   | 253                               |   | 142                                    |   | 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                               | ) | (110                                   | ) | (201  | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|(De)consolidation                                      |                                  |   |                                      |   | 1                                 |   | (4                                     | ) | (3    | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Withdrawals/repayments                                 | (1                               | ) | (6                                   | ) |                                   |   | (7                                     | ) | (14   | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Exchange rate differences                              |                                  |   |                                      |   | 3                                 |   | 1                                      |   | 4     |  
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Other changes                                          | (2                               | ) |                                      |   |                                   |   | 1                                      |   | (1    | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Total changes                                          | (37                              | ) | (8                                   | ) | (65                               | ) | (117                                   | ) | (227  | )
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|Balance at 31 December
      2005                      | 47                               |   | 13                                   |   | 188                               |   | 25                                     |   | 273   |  
|                                                       |                                  |   |                                      |   |                                   |   |                                        |   |       |  
|(in € millions)                                        |                                  |   |                                      |   |                                   |   |                                        |   |       |  



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. The opening balance sheet
    adjustment 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. Investments in associates
    at 31 December 2005 include goodwill of €1 million (2004: 1). Deferred
    tax assets are further explained in note 23. 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 is as follows and includes balances at 100%:




|Year
        ended and at 31 December                  |      
|------------------------------------------------------ | -----
|                                                       | 2005 
|                                                       |      
|Non-current assets                                     | 41   
|                                                       |      
|Current assets                                         | 0    
|                                                       |      
|                                                       |      
|                                                       |      
|Equity                                                 | 41   
|                                                       |      
|Non-current liabilities                                | 0    
|                                                       |      
|Current liabilities                                    | 0    
|                                                       |      
|                                                       |      
|                                                       |      
|Net sales                                              | 0    
|                                                       |      
|Operating income                                       | 0    
|                                                       |      
|Profit attributable
      to the shareholders          | (3   
|                                                       |      
|                                                       |      
|                                                       |      
|Net cash provided/(used)
      by operating activities | 0    
|                                                       |      
|Net cash
      used in investing activities            | (13  
|                                                       |      
|Net cash provided by
      in financing activities     | 13   
|                                                       |      
|**Changes in
      cash and cash equivalents**         | **0**
|                                                       |      
|(in € millions)                                        |      



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|134 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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Prepayments
  and accrued income also includes all outstanding short term foreign exchange
  forward contracts at fair value for an amount of €6 million (2004: 15).
  The fair value has been calculated at the relevant market (forward) rates at
  31 December 2005. The notional principal amount of the outstanding foreign exchange
  forward contracts at 31 December 2005 is €482 million (2004: 901). In addition,
  it also includes a net interest receivable of €4 million on the €500
  million interest rate swaps. Prepayments and accrued
    income also includes the fair value of put and call options. As agreed on
    15 July 2004, on 14 October 2004, our subsidiary Royal TPG 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 TPG 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 TPG 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. O
    4INVENTORY: 29 MILLION (2004: 46) At
          31 December2005
      2004Raw materials and
        supplies
      9
      
      16Finished goods
      20
      
      30Total
      29
      
      46(in € millions) Total inventory of €29
    million (2004: 46) is valued at historical cost for an amount of €33
    million (2004: 51) and are stated net of provisions for obsolete items amounting
    to €4 million (2004: 5). There are no inventories carried at net realisable
    value (2004: 1) and no inventories are pledged as security for liabilities
    as at 31 December 2005. Inventory as at 31 December
    2005 of €22 million related to our discontinued logistics business is
    included in assets held for sale.




O
  5ACCOUNTS RECEIVABLE: 1,471 MILLION (2004: 1,927)   At
          31 December2005
      2004Trade accounts receivable
        - total
      1,351
      
      1,761Provision for impairment
      (58
      )
      (90
      )**Trade accounts
        receivable - net**
      **1,293**
      
      **1,671**Vat receivable
      20
      
      91Accounts receivable
        from
      2
      
      6associatesOther
      156
      
      159Total
      1,471
      
      1,927(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 2005 (2004:1). Other 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 €3
    million (2004: 8). Accounts receivable as
    at 31 December 2005 of €695 million related to our discontinued logistics
    business is included in assets held for sale. O
    6PREPAYMENTS AND ACCRUED INCOME: 218 MILLION (2004: 391) 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
    2005, prepayments amounted to €73 million (2004: 85). The balance that
    is expected to be recovered after 12 months is €2 million (2004: 3). 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. O
    7CASH AND CASH EQUIVALENTS: 559 MILLION (2004: 633) Cash and cash equivalents
    comprise cash at bank and in hand of €325 million (2004: 297). Short
    term bank deposits are €234 million (2004: 336). The effective interest
    rate during 2005 on short term bank deposits was 2.08% and the average outstanding
    amount was €216 million. Included in cash and cash equivalents is €140
    million (2004: 171) of restricted cash. The fair value of cash and cash equivalents
    approximates the carrying value. Cash and cash equivalents
    as at 31 December 2005 of €104 million related to our discontinued logistics
    business is included in assets held for sale.




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        Annual Report and Form 20-F |  | 135
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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O
    8ASSETS HELD FOR SALE: 2,378 MILLION (2004: 0)
    LIABILITIES RELATED TO ASSETS CLASSIFIED AS HELD FOR SALE: 1,230 MILLION (2004:
    0) In December 2005 we announced
    a strategy to focus on our core competency of providing delivery services
    by expertly managing delivery networks. Based on the refined strategy we will
    now manage our business through two divisions: mail and express, with the
    express division including both our express and our freight management businesses. Our assets held for sale
    and liabilities related to assets held for sale include our non-network related
    logistics business we intend to divest. The majority of our logistics business
    in France was sold prior to year end and the remainder of the French business
    has since been sold. We will retain our freight management and our innight
    activities and these activities have been included in the express division. The major classes of
    assets and liabilities comprising the operations classified as held for sale
    and an analysis of the result from discontinued operations are as follows: At
          31 DecemberBalance sheet2005Intangible assets
      
      895Property, plant and
        equipment
      
      345Financial fixed assets
      
      160Current assets
      
      978Total assets
      
      2,378Deferred tax liabilities
      
      30Provisions for pension
        liabilities
      
      107Other non-current
        liabilities
      
      133Current liabilities
      
      960Total liabilities
      
      1,230(in € millions) All inter-company balances
    as at 31 December 2005 between our discontinued logistics business and our
    continuing business have been eliminated. Assets of €2,378
    million include €12 million of assets held for sale in the mail and express
    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. Current liabilities include
    a €222 million Canadian dollar denominated, syndicated facility that
    was signed in May 2001, at a rate of interest of three month Canadian LIBOR
    plus a margin of 0.325%. At 31 December 2005, the average rate of interest
    on this facility was 3.11%. In connection with the
    acquisition of our 51% interest in TNT Arvil, we granted a put option to the
    minority shareholder,




Ecotrans. Ecotrans has
    the right to sell their shares in TNT Arvil based on a price that has been
    determined in the shareholders agreement. Under the put option, the
    price at which the 49% shares can be sold to us includes a premium rate over
    the value at which the estimated price the option shares would be trading
    if TNT Arvil were a publicly traded company. This was deemed to be the fair
    market value. The fair value was estimated at €13 million and is included
    in total non-current liabilities. Contingent liabilities
    Commitments and contingencies as at 31 December 2005 amount to €706 million
    and mainly relate to rent and operating leases of €580 million, guarantees
    of €114 million and commitments on capital expenditure of €7 million. Contingent assets
    As a result of the sale and the consequent liquidation of the remaining relevant
    entities of our French business. We expect to realise a tax credit of approximately
    €90 million. This potential benefit has not been reflected in our accounts.  Statement
          of income
      Year
          ended at 31 December2005
      2004Net Sales
      3,542
      
      3,568Other revenues
      14
      
      13**Total revenues**
      **3,556**
      
      **3,581**Other income
      (98
      )Total operating expenses
      (3,475
      )
      (3,448
      )Operating income
      (17
      )
      133Net financial (expense)/income
      (63
      )
      (60
      )Results from investments
        in
      
      
      (1
      )associatesProfit before
        taxes
      (80
      )
      72Income taxes
      (31
      )
      (44
      )Profit for the
        period
      (111
      )
      28Profit attributable
        to minority
      
      
      (3
      )interestsProfit/(loss)
        from
      (111
      )
      31discontinued operationsEarnings from discontinued
        operations per ordinary share (in € cents)
      (24.5
      )
      6.6Earnings from discontinued
        operations per diluted ordinary share (in € cents)
      (24.3
      )
      6.6(in € millions) Inter-company revenues
    and related expenses of €60 million have not been eliminated in our statements
    of income related to our discontinued logistics business. Net interest expense
    of €51 million (2004: 48) related to debt, as part of our cash management
    strategy, that can be allocated to our discontinued logistics business has
    been included in the statements of income. The statements of income also include
    costs related to shared services of €21 million (2004: 14) directly attributable
    to our discontinued logistics business.




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|136 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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  to Contents





|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

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 basis of allocation
    for net sales and total assets by geographical area is the country or region
    in which the entity recording the sales is located. Net sales per geographic
    region were as follows:


|Geographical
        information                                                    | Net sales |  | Property,
        plant and equipment |  | Intangible
      assets |  | Number
        of
      employees | 
|----------------------------------------------------------------------------------- | --------- |  | ------------------------------------- |  | ----------------------- |  | --------------------------------- | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Europe                                                                              |           |  |                                       |  |                         |  |                                   | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|The
      Netherlands                                                               | 178       |  | 5                                     |  | 18                      |  | 1,063                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|United
      Kingdom                                                                | 647       |  | 100                                   |  | 130                     |  | 7,373                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Italy                                                                               | 962       |  | 43                                    |  | 195                     |  | 6,379                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|France                                                                              | 191       |  | 26                                    |  | 76                      |  | 1,998                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Germany                                                                             | 250       |  | 9                                     |  |                         |  | 713                               | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Sweden                                                                              | 3         |  |                                       |  |                         |  | 1                                 | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Rest
      of Europe                                                                | 223       |  | 34                                    |  | 9                       |  | 2,721                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Americas                                                                            |           |  |                                       |  |                         |  |                                   | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|USA
      and Canada                                                                | 662       |  | 62                                    |  | 462                     |  | 6,738                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|South
      & Middle America                                                        | 135       |  | 5                                     |  | 4                       |  | 5,131                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Africa & the Middle
      East                                                      |           |  |                                       |  |                         |  |                                   | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Australia & Pacific                                                                 | 152       |  | 25                                    |  |                         |  | 799                               | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Asia                                                                                |           |  |                                       |  |                         |  |                                   | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|China
      and Taiwan                                                              | 90        |  | 18                                    |  | 1                       |  | 342                               | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Rest
      of Asia                                                                  | 49        |  | 6                                     |  |                         |  | 2,027                             | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|Total                                                                               | 3,542     |  | 333                                   |  | 895                     |  | 35,285                            | 
|                                                                                    |           |  |                                       |  |                         |  |                                   | 
|(in € millions)                                                                     |           |  |                                       |  |                         |  |                                   | 
|1   
      Assets held for sale of €12 million in mail and express are not included |           |  |                                       |  |                         |  |                                   | 



The cash flows relating
    to our discontinued operations is as follows: Cash
        flow statements
      Year
        ended at 31 December2005
      2004Net cash from operating
        activities
      
      28
      
      250Net cash used in
        investing
      
      (19
      )
      (22
      )activitiesNet cash used in
        financing
      
      19
      
      (216
      )activitiesChange in cash
      
      28
      
      12Cash at the beginning
        of the
      
      71
      
      60periodExchange rate differences
      
      5
      
      (1
      )Change in cash
      
      28
      
      12Cash at the end
        of the period
      
      104
      
      71(in € millions) Net cash from operating
    activities is lower by €222 million mainly due to €102 million relating
    to the disposal of our French logistics businesses in 2005 combined with lower
    operating income, resulting from contract terminations mainly in the United
    Kingdom, lower volumes in automotive contracts and deteriorating performance
    related to the disposed French logistics business. The financing relating
    to our discontinued logistics business of €28 million (2004: 211) as
    shown in our consolidated cash flow statements is included in the net cash
    used in financing activities.




O
    9EQUITY:
    3,279 MILLION (2004: 3,344) Equity consists of shareholders
    equity attributable to the equity holders of the parent of €3,262 million
    (2004: 3,325) and minority interest of €17 million (2004: 19). See note
    36 for additional details on shareholders equity. O
    10PROVISIONS FOR PENSION LIABILITIES: 136 MILLION (2004: 339) 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, which is externally funded in Stichting Pensioenfonds
    TNT, 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 92,000 participants
    including approximately 12,000 pensioners and some 30,000 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).




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        Annual Report and Form 20-F |  | 137
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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As from 1 January 2006
      new fiscal regulations apply to the Dutch pension plans. TNT agreed with
      the labour unions a new employee benefit package that complies with the
      new fiscal regulations. All early retirement benefits are cancelled for
      employees born after 1949. The decrease in prospective benefits is largely
      offset by improved regular pension benefits, the introduction of conditional
    pension benefits, a senior arrangement with full salary payment for part-time
    labour and a salary allowance for employees born between1950 and 1954. Employees
    born before 1950 are also affected by the overall changes. The early retirement
    date for these employees is postponed by 3.5 months. All other elements of
    their pension and early retirement benefits remain unchanged. In the pension plan only
    the employer contributes to the fund. The level of contribution is based upon
    actuarial recommendations. In addition and subject to our funding agreement
    with the plan we have to pay additional contributions to the pension fund
    in order to satisfy the minimum funding requirements of the DNB. The total
    contribution to the main pension fund amounted to €145 million in 2005
    (2004: 159) and is estimated to be €113 million in 2006. The benefits
    for early retirement are directly paid by TNT to the pensioner. These payments
    amounted to €98 million in 2005 (2004: 95) and are estimated at €99
    million for 2006. The pension fund runs
    an actively managed investment portfolio. The pension fund uses asset and
    liability management studies that generate future scenarios to determine its
    optimal asset mix. During 2005, the dynamic weight of equity investments increased
    to 47.5%, the dynamic weight of fixed interest investments decreased to 44.6%
    and the weight of real estate investments (including international) went down
    to 7.9%. For 2005 no rebalancing
    has taken place and it is expected that in 2006 the strategic mix will move
    to a percentage of 49% in equity investments, 40% in fixed interest investments
    and real estate investments of 11%. Investments in equity consist of 50% of
    a European equity portfolio and 50% of a worldwide equity portfolio, all of
    which is hedged against US dollar exposure. The fixed income portfolios consist
    of 50% government bonds for the eurozone.




Actual
          asset mix at 31 December2005
      2004Equities
      47.5%
      
      44.9%Fixed interest
      44.6%
      
      46.5%Real estate
      7.9%
      
      8.6%Cash
      0.0%
      
      0.0%Total
      100.0%
      
      100.0%  Historical returns
      2005
      10-year
          average
      
      12-year
          averageEquities
      21.1%
      
      11.6%
      
      9.7%Fixed interest
      5.3%
      
      6.7%
      
      6.9%Real estate
      8.8%
      
      10.6%
      
      7.7% The liabilities of our
    main plan and transitional plan cover approximately 94.8% of our total pension
    liabilities and the assets cover approximately 93.6% of our total pension
    assets. The return on plan assets totalled 12.7% in 2005 (2004: 8.8%). 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 and retirement
    ages, discount rates, expected long term returns on plan assets 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 2005, our employer
    pension expense was €141 million (2004: 185). Total cash contributions
    in 2005 amounted to €264 million (2004: 437) and are expected to amount
    to approximately €222 million in 2006. Cash contributions to the main
    and other pension funds totalled €166 million. Of these payments €59
    million was contributed as prescribed by the minimum funding requirements
    of the DNB. Our cash payments for pensions, which fall under the transitional
    plan for early retirement in the Netherlands and are directly paid by TNT
    amounted to €98 million.




|Statement of changes
      in provisions
      for pension liabilities | Balance
        at 1 January 2005 |   | Transfer
        to discontinued logistics business |   | Employer
        contributions |  | Employer
        pension expense |   | Balance
        at 31 December 2005 |  
|---------------------------------------------------------------------- | --------------------------------- | - | --------------------------------------------------- | - | ------------------------------ |  | -------------------------------- | - | ----------------------------------- | -
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|Provision for pension
      liabilities                                | (198                              | ) | (3                                                  | ) | 264                            |  | (141                             | ) | (78                                 | )
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|of
      which main pension plan in the Netherlands                    |                                   |   |                                                     |   | 145                            |  | (50                              | ) |                                     |  
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|of
      which transistional plan in the Netherlands                   |                                   |   |                                                     |   | 98                             |  | (93                              | ) |                                     |  
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|of
      which other pension plan                                      |                                   |   | (3                                                  | ) | 21                             |  | 2                                |   |                                     |  
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|Other post-employment
      benefit plans                              | (141                              | ) | 86                                                  |   | 5                              |  | (8                               | ) | (58                                 | )
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|Total post-employment
      benefit plans                              | (339                              | ) | 83                                                  |   | 269                            |  | (149                             | ) | (136                                | )
|                                                                       |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  
|(in € millions)                                                        |                                   |   |                                                     |   |                                |  |                                  |   |                                     |  



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|138 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

Provision for pension
    liabilities including liabilities related to other post-employment benefit
    plans as at 31 December 2005 of €107 million related to our discontinued
    logistics business is included in liabilities related to assets classified
    as held for sale. €83 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
    2005 and does not reflect the movements during 2005. Funded status of our pension
    plans at 31 December 2005 and 2004 and with respect to the employer pension
    expense for 2005 and 2004 is presented in the table below.




|Pension
        disclosures                                                                | 2005   | 2004 | 1     
|------------------------------------------------------------------------------------------ | ------ | ---- | ------
|                                                                                           |        |      |       
|CHANGE IN BENEFIT
      OBLIGATION                                                         |        |      |       
|                                                                                           |        |      |       
|Benefit obligation
      at beginning of year                                              | (4,887 | )    | (3,727
|                                                                                           |        |      |       
|Transfer to discontinued
      logistics business                                          | 44     |      |       
|                                                                                           |        |      |       
|Service costs                                                                              | (160   | )    | (131  
|                                                                                           |        |      |       
|Interest costs                                                                             | (235   | )    | (211  
|                                                                                           |        |      |       
|Other costs                                                                                | 13     |      | (7    
|                                                                                           |        |      |       
|Amendments/foreign
      currency effects                                                  | 18     |      |       
|                                                                                           |        |      |       
|Past service costs/termination
      benefit costs                                         | (55    | )    | (57   
|                                                                                           |        |      |       
|Curtailments/settlements                                                                   | 45     |      | 142   
|                                                                                           |        |      |       
|Actuarial (loss)/gain                                                                      | (353   | )    | (1,055
|                                                                                           |        |      |       
|Benefits paid                                                                              | 172    |      | 159   
|                                                                                           |        |      |       
|Benefit obligation
      at end of year                                                    | (5,398 | )    | (4,887
|                                                                                           |        |      |       
|CHANGE IN PLAN ASSETS                                                                      |        |      |       
|                                                                                           |        |      |       
|Fair value of plan
      assets at beginning of year                                       | 3,693  |      | 3,277 
|                                                                                           |        |      |       
|Transfer to discontinued
      logistics business                                          | (45    | )    |       
|                                                                                           |        |      |       
|Actual return on plan
      assets                                                         | 490    |      | 285   
|                                                                                           |        |      |       
|Employer contribution                                                                      | 264    |      | 290   
|                                                                                           |        |      |       
|Amendments/foreign
      currency effects                                                  | (14    | )    |       
|                                                                                           |        |      |       
|Benefits paid                                                                              | (172   | )    | (159  
|                                                                                           |        |      |       
|Fair value of plan
      assets at end of year                                             | 4,216  |      | 3,693 
|                                                                                           |        |      |       
|FUNDED STATUS AS
      PER 31 DECEMBER                                                     |        |      |       
|                                                                                           |        |      |       
|Funded status                                                                              | (1,182 | )    | (1,194
|                                                                                           |        |      |       
|Unrecognised net actuarial
      loss                                                      | 1,094  |      | 996   
|                                                                                           |        |      |       
|Unrecognised prior
      service cost                                                      | 10     |      |       
|                                                                                           |        |      |       
|Pension liabilities                                                                        | (78    | )    | (198  
|                                                                                           |        |      |       
|Other employee benefit
      plans                                                         | (58    | )    | (141  
|                                                                                           |        |      |       
|Provisions for pension
      liabilities                                                   | (136   | )    | (339  
|                                                                                           |        |      |       
|COMPONENTS OF EMPLOYER
      PENSION EXPENSE FOR:                                          |        |      |       
|                                                                                           |        |      |       
|Service costs                                                                              | (160   | )    | (131  
|                                                                                           |        |      |       
|Interest costs                                                                             | (235   | )    | (211  
|                                                                                           |        |      |       
|Expected return on
      plan assets                                                       | 301    |      | 272   
|                                                                                           |        |      |       
|Amortisation of actuarial
      loss                                                       | (54    | )    |       
|                                                                                           |        |      |       
|Termination benefit
      costs and settlement losses                                      |        |      | (103  
|                                                                                           |        |      |       
|Other costs                                                                                | 7      |      | (12   
|                                                                                           |        |      |       
|Employer pension
      expense                                                             | (141   | )    | (185  
|                                                                                           |        |      |       
|Other post-employment
      benefit plan expense                                           | (8     | )    | (14   
|                                                                                           |        |      |       
|Total post-employment
      benefit expenses                                               | (149   | )    | (199  
|                                                                                           |        |      |       
|WEIGHTED AVERAGE
      ASSUMPTIONS AS AT 31 DECEMBER                                       |        |      |       
|                                                                                           |        |      |       
|Discount rate                                                                              | 4.3%   |      | 4.8%  
|                                                                                           |        |      |       
|Expected return on
      assets                                                            | 7.9%   |      | 7.9%  
|                                                                                           |        |      |       
|Rate of compensation
      increase                                                        | 2.0%   |      | 2.8%  
|                                                                                           |        |      |       
|Rate of benefit increase                                                                   | 2.0%   |      | 2.0%  
|                                                                                           |        |      |       
|(in € millions,
      except percentages)                                                  |        |      |       
|1 All 2004 balances
      include balances related to our discontinued logistics business. |        |      |       



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        Annual Report and Form 20-F |  | 139
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

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
      
      
      (141
      )Discount rate
      +
          0.5%
      
      42Expected return on
        assets
      +
          0.5%
      
      19Rate of compensation
        increase
      +
          0.5%
      
      (24
      )Rate of benefit increase
      +
          0.5%
      
      (59
      )Employer pension
        expense
      
      
      (141
      )Discount rate
      (0.5)%
      
      (61
      )Expected return on
        assets
      (0.5)%
      
      (19
      )Rate of compensation
        increase
      (0.5)%
      
      22Rate of benefit increase
      (0.5)%
      
      51(in € millions,
        except percentages) 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 to the pensioners and
    early retirees under the Dutch transitional plan. Year
      Expected benefits as per
        31 December 20052006
      1682007
      1752008
      1802009
      1882010
      2042011-2015
      1,311(in
        € million) Amounts expensed in the
    consolidated statements of income related to defined contribution plans were
    €26 million (2004: 21).




O  11OTHER
    EMPLOYEE BENEFITS: 49 MILLION (2004: 75) Statement
        of changes in other
        employee benefits
      Other
          long term employee obligationsBalance at 31
        December 2004
      75Transfers to liabilities
        related to assets
        classified as held for sale
      (36
      )Exchange differences
      1Additions
      16Withdrawals
      (7
      )Total changes
      (26
      )Balance at 31
        December 2005
      49 (in € million) Other employee benefits
    as at 31 December 2005 of €18 million related to our discontinued logistics
    business is included in assets held for sale. €36 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 2005 and does not
    reflect the movements during 2005. Other employee benefits
    consist of provisions related to jubilee payments (€33 million), long-service
    benefits (€11 million) and long term disability benefits (€5 million). Short term employee benefits,
    such as salaries, profit sharing and bonuses are discussed in note 19.




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|140 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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O  12PROVISIONS:
  134 MILLION (2004: 149)

Statement of changes
  in other provisions

|                                                                             | Restructuring |   | Other |   | Total |  
|---------------------------------------------------------------------------- | ------------- | - | ----- | - | ----- | -
|                                                                             |               |   |       |   |       |  
|Balance at 31 December
      2004                                            | 49            |   | 100   |   | 149   |  
|                                                                             |               |   |       |   |       |  
|Additions                                                                    | 30            |   | 54    |   | 84    |  
|                                                                             |               |   |       |   |       |  
|Withdrawals                                                                  | (22           | ) | (27   | ) | (49   | )
|                                                                             |               |   |       |   |       |  
|Transfers to liabilities
      related to assets classified as held for sale | (9            | ) | (43   | ) | (52   | )
|                                                                             |               |   |       |   |       |  
|Interest                                                                     | 2             |   |       |   | 2     |  
|                                                                             |               |   |       |   |       |  
|Reclassification                                                             |               |   | 9     |   | 9     |  
|                                                                             |               |   |       |   |       |  
|Other/releases                                                               | (7            | ) | (2    | ) | (9    | )
|                                                                             |               |   |       |   |       |  
|Balance at 31 December
      2005                                            | 43            |   | 91    |   | 134   |  
|                                                                             |               |   |       |   |       |  
|of
      which included in other provisions (non-current)                    | 29            |   | 76    |   | 105   |  
|                                                                             |               |   |       |   |       |  
|of
      which included in short term provisions                             | 14            |   | 15    |   | 29    |  
|                                                                             |               |   |       |   |       |  
|(in € millions)                                                              |               |   |       |   |       |  



Provisions as at 31 December
    2005 of €82 million related to our discontinued logistics business is
    included in assets held for sale. €52 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 2005 and does not reflect the movements
    during 2005. Provisions for restructuring
    include provisions related to restructuring projects in the mail division
    for €41 million and in the express division for €2 million. Restructuring
    in our mail division includes projects for mail activities in the Netherlands.
    During the year approximately 430 (2004: 1,004) 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, 360 (2004: 300) related to mail, 70 (2004: 704)
    related to employees in express. Other provisions of €91
    million (2004: 100) mainly relate to provisions for claims of €22 million
    (2004: 27), provisions for onerous contracts of €3 million (2004: 8),
    provision for Italian subcontractor fees of €2 million and other provisions. The estimated utilisation
    in 2006 is €29 million, in 2007 €13 million, 2008 €6 million
    and 2009 and beyond €86 million.


|O  13LONG
        TERM DEBT: 1,071 MILLION (2004: 1,440) |                         |     
|-------------------------------------------------------- | ----------------------- | ----
|                                                         | At
        31 December  |     
|Carrying amounts
      and fair value of long term debt  | 2005                    | 2004
|                                                         | Carrying
        amount |     
|                                                         |                         |     
|Euro Bonds                                               | 1,009                   |     
|                                                         |                         |     
|Finance leases                                           | 24                      |     
|                                                         |                         |     
|Other loans                                              | 31                      |     
|                                                         |                         |     
|Interest rate swaps                                      | 7                       |     
|                                                         |                         |     
|Total long term
      debt                               | 1,071                   |     
|                                                         |                         |     
|(in € millions)                                          |                         |     

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 amounts of interest-bearing long term liabilities during each of
    the following five years and thereafter:




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        Annual Report and Form 20-F |  | 141
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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|Total
      borrowings | Euro
        Bonds                                   |       | Finance
        leases |    | Other
        loans |     | Interest
        rate swaps |   | Bank
        debt |    | Total |      
|---------------------- | ---------------------------------------------------- | ----- | ---------------------- | -- | ------------------- | --- | --------------------------- | - | ----------------- | -- | ----- | -----
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|2006                   |                                                      |       | 4                      |    | 144                 |     |                             |   | 65                |    | 213   |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|2007                   |                                                      |       | 5                      |    | 4                   |     |                             |   |                   |    | 9     |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|2008                   | 641                                                  |       | 3                      |    | 2                   |     |                             |   |                   |    | 646   |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|2009                   |                                                      |       | 3                      |    | 2                   |     |                             |   |                   |    | 5     |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|2010                   |                                                      |       | 2                      |    | 3                   |     |                             |   |                   |    | 5     |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|Thereafter             | 368                                                  |       | 11                     |    | 20                  |     | 7                           |   |                   |    | 406   |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|Total
      borrowings | 1,009                                                |       | 28                     |    | 175                 |     | 7                           |   | 65                |    | 1,284 |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|                       | of which included in
      long term debt            | 1,009 |                        | 24 |                     | 31  |                             | 7 |                   |    |       | 1,071
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|                       | of which included in
      other current liabilities |       |                        | 4  |                     | 144 |                             |   |                   | 65 |       | 213  
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|(in €
      millions)  |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      
|                       |                                                      |       |                        |    |                     |     |                             |   |                   |    |       |      

The fair value of long
    term 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. On 5 December 2001, TNT
    N.V. issued a €1 billion Eurobond with an original maturity of seven
    years. The bond has a coupon of 5.125% and began paying interest annually
    in arrears on 5 December 2002. In May 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. The total €1,046
    million of Eurobonds will be measured at amortised cost of €1,011 million.
    A fair value adjustment of positive €2 million has been reflected in
    the amortised cost value to adjust the amortised cost value to the book value.
    The book value of the nominal €1,046 million of Eurobonds amounted to
    €1,009 million as at 31 December 2005. TNT has a total €500
    million (2004: 300) 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 €2
    million as at 31 December 2005 (2004: -1). In December 2005, 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. These
      interest rate swaps act as a hedge against the cash flow interest rate risk
      of the non-agreed upon additional funding to the 5.125% December 2008 Eurobond.
      Per 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 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 market
  value of this long term €100 million outstanding forward starting interest
  rate swap amounted to €5 million as at 31 December 2005 (2004: 0). As the
  forward starting swap has been designated as a cash flow hedge, the market value
  movement has been included in equity. Total borrowings include
    bank loans of €18 million (2004: 21), which are secured by property,
    plant and equipment. At 31 December 2005, committed facilities with domestic
    and international banks amounted to €1 billion. This undrawn revolving
    syndicated facility will mature in 2012. The facility was negotiated in 2005. We lease several aircraft
    for our express business. Furthermore, we lease several buildings, trucks
    and trailers for our mail and express business. None of the individual lease
    arrangements are deemed significant. O  14OTHER
    CURRENT LIABILITIES: 571 MILLION (2004: 507) At
          31 December2005
      2004Short term bank debt
      65
      
      36Current portion of
        long term debt
      148
      
      15Total current
        borrowings
      213
      
      51Taxes and social
        security contributions
      137
      
      273Expenses to be paid
      62
      
      44Other
      159
      
      139Total
      571
      
      507(in € millions)






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|142 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

As at 31 December 2004
    long term debt includes a €129 million bilateral loan agreement maturing
    in 2020 with fixed interest rate of 5.85%. In 2005, the loan agreement was
    changed to a bullet loan maturing in 2006 with a fixed interest of 2.54% and
    is included in current portion of long term debt. Included in the €159
    million, in another €17 million related to shares purchased under the
    share buy back programme. Other current liabilities
    also include a fair value of €31 million (2004: 8) of all outstanding
    short term foreign exchange forward contracts and a basis swap. A basis swap
    is a hedge on an inter-company loan receivable or payable. Of the €31
    million an amount of €0.4 million qualifies for hedge accounting and
    has been included directly in shareholders equity. The fair value has
    been calculated against the relevant market (forward) rates at 31 December
    2005. The notional principal amount of the outstanding foreign exchange forward
    contracts at 31 December 2005 is €794 million (2004: 359). The balance of 31 December
    2005 that is expected to be settled after 12 months is €70 million (2004:
    58). 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. O  15ACCRUED
    CURRENT LIABILITIES: 1,126 MILLION (2004: 1,308) At
          31 December2005
      2004Amounts received
        in advance
      99
      
      169Expenses to be paid
      669
      
      742Vacation/vacation
        payments
      177
      
      210Terminal dues
      79
      
      76Other accrued current
        liabilities
      102
      
      111Total
      1,126
      
      1,308(in € millions) Amounts received in advance
    include €59 million (2004: 67) for stamps which were sold but not yet
    used. The balance of the €1,126 million that is expected to be settled
    after 12 months is €45 million (2004: 12). 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 O  16NET
    SALES: 10,050 MILLION (2004: 9,077) The net sales of mail,
    express and freight management relate to the trading activities of all three
    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 33. O  17OTHER
    OPERATING REVENUES: 55 MILLION (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, aircraft maintenance and engineering income and custom clearance
    income. O  18OTHER
    INCOME: 38 MILLION (2004: 8) Other income in 2005
    mainly includes net proceeds from the sale of group companies of €12
    million and the sale of property, plant and equipment for €26 million
    (2004: 8). O  19SALARIES
    AND SOCIAL SECURITY CONTRIBUTIONS: 3,413 MILLION (2004: 3,248) Year
          ended at 31 December2005
      20041Salaries
      2,835
      
      2,625Share based payments
      8
      
      5Pension charges:Defined
          benefit plans
      149
      
      188Defined
          contribution plans
      26
      
      21Social security charges
      395
      
      409Total
      3,413
      
      3,248(in € millions) 1
      The
        numbers for 2004 have been adjusted for comparative purposes.  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.




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        Annual Report and Form 20-F |  | 143
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

|Labour
      force                                  |                            |        |         |       
|--------------------------------------------------- | -------------------------- | ------ | ------- | ------
|                                                    |                            | 2005   | 20041   |       
|                                                    |                            |        |         |       
|Employees
        at year end 2                     | 128,307                    |        | 130,262 |       
|                                                    |                            |        |         |       
|                                                    | Mail                       | 77,447 |         | 81,794
|                                                    |                            |        |         |       
|                                                    | Express                    | 48,574 |         | 46,151
|                                                    |                            |        |         |       
|                                                    | Freight
        management | 2,286  |         | 2,317 
|                                                    |                            |        |         |       
|Employees
        of joint ventures 3               | 6,315                      |        | 6,735   |       
|                                                    |                            |        |         |       
|Number
        of external agency staff at year end | 8,157                      |        | 3,469   |       
|                                                    |                            |        |         |       
|FTEs
        year average 4                        | 89,362                     |        | 89,265  |       
|                                                    |                            |        |         |       
|                                                    | Mail                       | 42,482 |         | 44,483
|                                                    |                            |        |         |       
|                                                    | Express                    | 44,636 |         | 42,522
|                                                    |                            |        |         |       
|                                                    | Freight
        management | 2,244  |         | 2,260 
|                                                    |                            |        |         |       
|FTEs
        of joint ventures 2                   | 4,940                      |        | 5,336   |       
|                                                    |                            |        |         |       

|1 | The numbers
      for 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 | 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 2005, 6,315
    people (2004: 6,735) were employed by joint ventures, of whom 4,562 (2004:
    4,964) were on the payroll of Dutch companies, primarily Postkantoren B.V.,
    and 1,753 (2004: 1,771) were on the payroll of companies outside the Netherlands. In 2005 the average number
    of average full-time employee equivalents in the mail division was 42,482.
    This was a decrease of 4.5% compared to last year and was mainly caused by
    restructuring plans and natural attrition in the Netherlands. The 5% increase of average
    full-time employee equivalents in express was mainly caused by organic growth. The number of external
    agency staff increased by 8,157 (2004: 3,469), mainly due to the flexible
    work force programme in the mail segment.




The total number of employees
    in our 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 2005, the accrued remuneration of the current members of the Supervisory
    Board, excluding VAT, amounted to €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                                                                           | 52,100                    |  | 5,067                             |  | 57,167                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|R.J.N. Abrahamsen                                                                       | 42,100                    |  | 27,134                            |  | 69,234                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|J.M.T. Cochrane                                                                         | 42,100                    |  | 10,567                            |  | 52,667                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|R. Dahan                                                                                | 42,100                    |  | 14,067                            |  | 56,167                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|V. Halberstadt                                                                          | 42,100                    |  | 22,567                            |  | 64,667                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|W. Kok                                                                                  | 42,100                    |  | 9,067                             |  | 51,167                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|S. Levy                                                                                 | 42,100                    |  | 12,567                            |  | 54,667                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|G. Monnas                                                                               | 42,100                    |  | 11,134                            |  | 53,234                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|R.W.H. Stomberg                                                                         | 42,100                    |  | 8,134                             |  | 50,234                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|Total current members
      of the Supervisory Board                                    | 388,900                   |  | 120,304                           |  | 509,204                    | 
|                                                                                        |                           |  |                                   |  |                            | 
|M. Tabaksblat                                                                           | 15,126                    |  | 567                               |  | 15,693                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|Total former members
      of the Supervisory Board                                     | 15,126                    |  | 567                               |  | 15,693                     | 
|                                                                                        |                           |  |                                   |  |                            | 
|Total Supervisory
      Board compensation                                              | 404,026                   |  | 120,871                           |  | 524,897                    | 
|                                                                                        |                           |  |                                   |  |                            | 
|( in €
      )                                                                          |                           |  |                                   |  |                            | 
|1   Payments
      relating to number of Supervisory Board committee meetings attended. |                           |  |                                   |  |                            | 








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|144 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

No options or shares were
    granted to members of the Supervisory Board and none of the members of the
    Supervisory Board accrued any pension rights with our company. Remuneration of members
    of the Board of ManagementDuring 2005, the Board of Management consisted of five members. The Board
    of Management remained unchanged during 2005. TOTAL REMUNERATION
    In 2005, the remuneration, including pension and social security contributions,
    of the current and the former members of the Board of Management amounted
    to €9,784,714 (2004: 7,956,604).




The pension contribution
    for the defined benefit pension plan of Dave Kulik is on a non-funded pension
    scheme, meaning that the liability for a future pension exists, but the money
    is not actually transferred to a fund. Marie-Christine Lombard
    received a special incentive award of €150,000 for her contribution to
    the discontinuation of logistics France. The severance payments for Jan Haars
    amounted to €1,794,706 in the severance conditions as disclosed in 2005.
    There was no accrual for the special incentive of Dave Kulik in 2005. The remuneration of the
    individual members of the Board of Management is set out in the table below:


|Compensation &
        benefitsBoard
        of Management | Base
        salary |  | Other
        
        periodic paid compensation 1 |  | Accrued
        profit share and bonus |  | Accrual
        for long term equity incentive |  | Severance
      payments | Pension
        contributions for future payments |  | 2005
        Total |  | 2004
        Total | 
|---------------------------------------------------------- | ------------------- |  | --------------------------------------------------- |  | -------------------------------------- |  | ---------------------------------------------- |  | ------------------------ | ------------------------------------------------- |  | ------------------ |  | ------------------ | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Peter Bakker                                               | 900,000             |  | 74,083                                              |  | 543,997                                |  | 262,974                                        |  |                          | 130,734                                           |  | 1,911,788          |  | 1,894,993          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Jan Haars                                                  | 500,000             |  | 34,923                                              |  | 302,751                                |  | 136,233                                        |  | 1,794,706                | 206,371                                           |  | 2,974,984          |  | 1,141,772          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Harry Koorstra                                             | 600,000             |  | 43,760                                              |  | 409,561                                |  | 136,233                                        |  |                          | 239,941                                           |  | 1,429,495          |  | 1,275,211          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Dave Kulik                                                 | 600,000             |  | 60,398                                              |  | 399,312                                |  | 126,193                                        |  |                          | 605,973                                           |  | 1,791,876          |  | 2,075,253          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Marie-Christine Lombard                                    | 600,000             |  | 340,300                                             |  | 430,078                                |  | 126,193                                        |  |                          | 180,000                                           |  | 1,676,571          |  | 1,234,714          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Total current members
      of the Board of Management     | 3,200,000           |  | 553,464                                             |  | 2,085,699                              |  | 787,826                                        |  | 1,794,706                | 1,363,019                                         |  | 9,784,714          |  | 7,621,943          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Total former members
      of the Board of Management      |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  | 334,661            | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 
|Total Board of Management                                  | 3,200,000           |  | 553,464                                             |  | 2,085,699                              |  | 787,826                                        |  | 1,794,706                | 1,363,019                                         |  | 9,784,714          |  | 7,956,604          | 
|                                                           |                     |  |                                                     |  |                                        |  |                                                |  |                          |                                                   |  |                    |  |                    | 

|(in €)
|------
|1     



BASE SALARY
    Details of the base salary and the other periodic paid compensation elements
    of the current members of the Board of Management are set out below. For 2005 the Board of
    Management has not received a general increase in base salary. In 2006 the
    Board of Management again will not receive a general increase in base salary.
    The base salary of Marie-Christine Lombard was aligned to the salary of the
    other group managing directors in the Board of Management at €600,000.
    The country of residence component in the base salary for Dave Kulik and Marie-Christine
    Lombard consisted of €500,000 for Dave Kulik and €300,000 for Marie-Christine
    Lombard. SHORT TERM INCENTIVES
    Since 2002, we account for bonus payments on the basis of the accrued bonuses
    for the performance of the year reported. In 2005, an amount of €2,288,333
    was paid to the members of the Board of Management for performance over 2004.
    In the table below the amount of €1,772,279 and €150,000 reflects




the accrued bonuses for
    performance over 2005 and the amount of €163,420 reflects the accrued
    costs for the rights on matching shares that were granted in 2005, 2004 and
    2003. The economic profit targets
    for 2005 were met for express and mail. The economic profit targets for logistics
    were not met. The 2005 earnings per share performance target was between minimum
    and target. The earnings per share target and performance for 2005 included
    the logistics operations.




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        Annual Report and Form 20-F |  | 145
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

The 2005 profit share
    and bonus amounts for the members of the Board of Management are accrued as
    set out below:






|Profit shares &
        bonuses 
        Board of Management | Accrued
        for 2005 performance |  | 2005
        bonus as percentage of base pay |  | Other
        bonus/accrued special incentive |  | Accrued
        for matching shares |  | Profit
        share and bonus | 
|------------------------------------------------------------ | ------------------------------------ |  | -------------------------------------------- |  | --------------------------------------------- |  | ----------------------------------- |  | ------------------------------ | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Peter Bakker                                                 | 498,140                              |  | 55%                                          |  |                                               |  | 45,857                              |  | 543,997                        | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Jan Haars                                                    | 276,744                              |  | 55%                                          |  |                                               |  | 26,007                              |  | 302,751                        | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Harry Koorstra                                               | 364,465                              |  | 61%                                          |  |                                               |  | 45,096                              |  | 409,561                        | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Dave Kulik                                                   | 268,465                              |  | 45%                                          |  |                                               |  | 34,847                              |  | 303,312                        | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Marie-Christine Lombard                                      | 364,465                              |  | 61%                                          |  | 150,000                                       |  | 11,613                              |  | 526,078                        | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|Total                                                        | 1,772,279                            |  |                                              |  | 150,000                                       |  | 163,420                             |  | 2,085,699                      | 
|                                                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 
|(in €, except
      percentages)                             |                                      |  |                                              |  |                                               |  |                                     |  |                                | 



SHARE MATCHING SCHEME
    In 2005, the amount of €2,288,333 in relation to company results was
    paid to the members of the Board of Management. Of this amount, 75% (€1,762,250)
    was paid in cash and 25% ( €572,083) was paid in shares. 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 and none of the acquired shares were
    sold during their membership of the Board of Management. Their current matching
    entitlement is set out in the following table:




|                                                               | Number
        of matching rights on shares
|-------------------------------------------------------------- | -------------------------------------------
|                                                               |                                            
|Bonus-related
      matching rights Board of 
      Management | Year                                       
|                                                               |                                            
|Peter Bakker                                                   | 2003                                       
|                                                               |                                            
|                                                               | 2004                                       
|                                                               |                                            
|                                                               | 2005                                       
|                                                               |                                            
|Jan Haars                                                      | 2003                                       
|                                                               |                                            
|                                                               | 2004                                       
|                                                               |                                            
|                                                               | 2005                                       
|                                                               |                                            
|Harry Koorstra                                                 | 2003                                       
|                                                               |                                            
|                                                               | 2004                                       
|                                                               |                                            
|                                                               | 2005                                       
|                                                               |                                            
|Dave Kulik                                                     | 2003                                       
|                                                               |                                            
|                                                               | 2004                                       
|                                                               |                                            
|                                                               | 2005                                       
|                                                               |                                            
|Marie-Christine Lombard                                        | 2003                                       
|                                                               |                                            
|                                                               | 2004                                       
|                                                               |                                            
|                                                               | 2005                                       
|                                                               |                                            
|Current members
      of the Board of Management               |                                            
|                                                               |                                            
|Total Board of Management                                      |                                            
|                                                               |                                            

|1 | using 25% of bonus
      earned before the appointment as member of the Board of Management.
|- | --------------------------------------------------------------------------------------------



LONG TERM INCENTIVES
    The maximum number 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).








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|146 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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  to Contents





|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

LONG TERM INCENTIVE/SHARE
      OPTION SCHEME
      The table below summarises the status of the number of outstanding options
      of our ordinary shares granted to the members of the Board of Management:








|                                                   |      
|-------------------------------------------------- | -----
|Options Board of
      Management                  |      
|                                                   | Year 
|                                                   |      
|Board
        of Management 1                      |      
|                                                   |      
|Peter
        Bakker                               | 2000 
|                                                   |      
|                                                   | 2001 
|                                                   |      
|                                                   | 2002 
|                                                   |      
|                                                   | 2003 
|                                                   |      
|                                                   | 2004 
|                                                   |      
|Jan
        Haars                                  | 2002 
|                                                   |      
|                                                   | 2003 
|                                                   |      
|                                                   | 2004 
|                                                   |      
|Harry
        Koorstra                             | 2000 
|                                                   |      
|                                                   | 2001 
|                                                   |      
|                                                   | 2002 
|                                                   |      
|                                                   | 2003 
|                                                   |      
|                                                   | 2004 
|                                                   |      
|Dave
        Kulik                                 | 2003 
|                                                   |      
|                                                   | 2004 
|                                                   |      
|Marie-Christine
        Lombard                    | 2004 
|                                                   |      
|Current
        members of the Board of Management | Total
|                                                   |      
|Former
        members of the Board of Management  | 2000 
|                                                   |      
|Former
        members of the Board of Management  | Total
|                                                   |      
|Total
        Board of Management                  |      
|                                                   |      

|1 | The options of the
      (former) members of the Board of Management only include the options granted
      as of the year of appointment to the Board of Management.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Granted before the
      appointment as member of the Board of Management.                                                                                           
|3 | 150% of base allocation
      being the maximum number of options exercisable under the performance schedule.                                                        

No member of the Board
  of Management has exercised options.

LONG TERM INCENTIVE/PERFORMANCE
    SHARE SCHEMEThe table below summarises
    the status of the rights awarded under the performance share scheme to the
    members of the Board of Management:








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        Annual Report and Form 20-F |  | 147
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

|Rights
      on performance shares Board of Management | Number
      of rights on performance shares | 
|------------------------------------------------------ | -------------------------------------------- | 
|                                                       |                                              | 
|                                                       | Year                                         | 
|                                                       |                                              | 
|Peter Bakker                                           | 2003                                         | 
|                                                       |                                              | 
|                                                       | 2004                                         | 
|                                                       |                                              | 
|                                                       | 2005                                         | 
|                                                       |                                              | 
|Jan Haars                                              | 2003                                         | 
|                                                       |                                              | 
|                                                       | 2004                                         | 
|                                                       |                                              | 
|                                                       | 2005                                         | 
|                                                       |                                              | 
|Harry Koorstra                                         | 2003                                         | 
|                                                       |                                              | 
|                                                       | 2004                                         | 
|                                                       |                                              | 
|                                                       | 2005                                         | 
|                                                       |                                              | 
|Dave Kulik                                             | 2004                                         | 
|                                                       |                                              | 
|                                                       | 2005                                         | 
|                                                       |                                              | 
|Marie-Christine Lombard                                | 2004                                         | 
|                                                       |                                              | 
|                                                       | 2005                                         | 
|                                                       |                                              | 
|Total                                                  |                                              | 
|                                                       |                                              | 

|1 | 120% of base allocation
      being the maximum number of rights on performance shares that can vest under
      the performance schedule.
|- | ------------------------------------------------------------------------------------------------------------------------------------------

Our relative total shareholder
    return over the period from 1 January 2002 through 31 December 2005 governs
    the share option grant and performance share grant for 2002. 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.




If the granted share
    options and rights on performance shares were to vest on 31 December 2005,
    the following share options would have vested based on the total shareholders
    return vesting percentages.


|Vesting per year
      end according to TSR performance schedules |      |  | Share
      options                                    |  | Performance
      shares           | 
|----------------------------------------------------------------- | ---- |  | ------------------------------------------------------ |  | ---------------------------------- | 
|                                                                  | Year |  | Vesting
        % relating to TSR performance schedule |  | Vesting
        as per 31 Dec 2005 | 
|                                                                  |      |  |                                                        |  |                                    | 
|Peter Bakker                                                      | 2002 |  | 75%                                                    |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2003 |  | 75%                                                    |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2004 |  | 100%                                                   |  | 60,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2005 |  |                                                        |  |                                    | 
|                                                                  |      |  |                                                        |  |                                    | 
|Jan Haars                                                         | 2002 |  | 75%                                                    |  | 15,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2003 |  | 75%                                                    |  | 15,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2004 |  | 100%                                                   |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2005 |  |                                                        |  |                                    | 
|                                                                  |      |  |                                                        |  |                                    | 
|Harry Koorstra                                                    | 2002 |  | 75%                                                    |  | 15,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2003 |  | 75%                                                    |  | 15,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2004 |  | 100%                                                   |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2005 |  |                                                        |  |                                    | 
|                                                                  |      |  |                                                        |  |                                    | 
|Dave Kulik                                                        | 2003 |  | 75%                                                    |  | 9,000                              | 
|                                                                 
|                                                                  | 2004 |  | 100%                                                   |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2005 |  |                                                        |  |                                    | 
|                                                                 
|Marie-Christine Lombard                                           | 2004 |  | 100%                                                   |  | 30,000                             | 
|                                                                  |      |  |                                                        |  |                                    | 
|                                                                  | 2005 |  |                                                        |  |                                    | 
|                                                                  |      |  |                                                        |  |                                    | 
|Total                                                             |      |  |                                                        |  | 309,000                            | 
|                                                                 

The table above shows
    the actual vesting of the 2002 and 2003 share options as well as the 2003
    performance shares on 31 December 2005.




For the grants after
    2003, it shows what would vest if the performance period ended on 31 December
    2005.




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|148 |  | 2005 Annual Report
      and Form 20-F
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  to Contents



|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

VARIABLE COMPENSATIONIn the table below the total variable compensation granted
    in 2005 to the members of the Board of Management is expressed as a percentage
    of base salary. For this purpose the value 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.




|Percentage
      variable compensation Board of Management | Bonus
        for 2005 performance |  | Rights
        on matching shares accrued |  | Share
        options granted in 2003-2005 |  | Rights
        on performance shares granted in 2003-2005 |  | Other
        bonus/accrued special incentive |  | Total
        variable compensation |  | Base
        salary |  | Total
        variable compensation as % of base pay |  
|---------------------------------------------------------- | ---------------------------------- |  | ----------------------------------------- |  | ------------------------------------------ |  | --------------------------------------------------------- |  | --------------------------------------------- |  | ----------------------------------- |  | ------------------- |  | ---------------------------------------------------- | -
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Peter Bakker                                               | 498,140                            |  | 45,857                                    |  | 127,803                                    |  | 135,171                                                   |  |                                               |  | 806,971                             |  | 900,000             |  | 90                                                   | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Jan Haars                                                  | 276,744                            |  | 26,007                                    |  | 63,901                                     |  | 72,332                                                    |  |                                               |  | 438,984                             |  | 500,000             |  | 88                                                   | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Harry Koorstra                                             | 364,465                            |  | 45,096                                    |  | 63,901                                     |  | 72,332                                                    |  |                                               |  | 545,794                             |  | 600,000             |  | 91                                                   | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Dave Kulik                                                 | 268,465                            |  | 34,847                                    |  | 53,861                                     |  | 72,332                                                    |  |                                               |  | 429,505                             |  | 600,000             |  | 72                                                   | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Marie-Christine Lombard                                    | 364,465                            |  | 11,613                                    |  | 53,861                                     |  | 72,332                                                    |  | 150,000                                       |  | 652,271                             |  | 600,000             |  | 109                                                  | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  
|Total                                                      | 1,772,279                          |  | 163,420                                   |  | 363,327                                    |  | 424,499                                                   |  | 150,000                                       |  | 2,873,525                           |  | 3,200,000           |  | 90                                                   | %
|                                                           |                                    |  |                                           |  |                                            |  |                                                           |  |                                               |  |                                     |  |                     |  |                                                      |  

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

PENSIONS
    Peter Bakker, Jan Haars and Harry Koorstra are participants in a defined benefit
    scheme, which provides an annual benefit of 70% of pensionable salary, assuming
    35 years of service. Dave Kulik participates in a defined benefit scheme with
    a normal retirement benefit accrual of 1.75% per year and a 401(k) scheme
    (defined contribution). Marie-Christine Lombard




participates in a defined
    contribution pension scheme. The pensionable age of Peter Bakker and Harry
    Koorstra is 65; the pensionable age of Jan Haars is 60 years of age. The foreseen
    pensionable age of Dave Kulik is 60. 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 2005 | Type
        of pension scheme 1 | Transfer/fund
        value of accrued benefits at 31 Dec 2004 2 |           | Defined
        benefit obligation at 31 Dec 2005 3
|                                                                              |    |                                     |                                  |                                                                  |           |                                                    
|Peter
        Bakker                                                          | 44 | DB                                  | 1,503,243                        |                                                                  | 2,606,519 |                                                    
|                                                                              |    |                                     |                                  |                                                                  |           |                                                    
|Jan
        Haars                                                             | 54 | DB                                  | 2,374,951                        |                                                                  | 4,114,537 |                                                    
|                                                                              |    |                                     |                                  |                                                                  |           |                                                    
|Harry
        Koorstra                                                        | 54 | DB                                  | 2,845,674                        |                                                                  | 4,783,845 |                                                    
|                                                                              |    |                                     |                                  |                                                                  |           |                                                    
|Dave
        Kulik 5                                                          | 57 | DB                                  | 3,096,986                        |                                                                  | 4,843,875 |                                                    
|                                                                              |    |                                     |                                  |                                                                  |           |                                                    

|1 | DB = Defined
      benefit.                                                                                                                                                                                                                                                                                                                      
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | The accrued
      benefits are as disclosed in 2004.                                                                                                                                                                                                                                                                                             
|3 | The defined
      benefit obligation is based on IAS19 requirements.                                                                                                                                                                                                                                                                             
|4 | The service
      costs are based on IAS19 requirements.                                                                                                                                                                                                                                                                                         
|5 | The service
      cost for Dave Kulik are calculated on a 5 year average final pay basis.
      The service cost for 2005 are impacted by the increase in compensation after
      his appointment in the Board of Management in 2003.The change in accrued
      benefits includes €46,327 due to the change in the foreign exchange
      rate.



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|2005
        Annual Report and Form 20-F |  | 149
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

Transfer values of the
    accrued benefits of our Dutch members of the Board of Management has been
    calculated on the basis of actuarial advice in accordance with the regulations
    from the Dutch Ministry of Social Affairs and Employment. The pension contribution
    for Dave Kulik is to a non-funded pension scheme, meaning that the liability
    for a future pension exists, but the money is not actually transferred to
    a fund. In addition, we contributed
    €14,521 for Dave Kulik and €180,000 for Marie-Christine Lombard
    under a defined contribution scheme. Performance Share
    Scheme
    The 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 2005 to about 1,000 managers in the current
        TNT group at a fair value of €14.11. 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 at the third anniversary of the grant (May 2008).
      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
        2005 is stated below.




|Rights on performance
      shares management | Number
      of rights on performance shares | 
|--------------------------------------------- | -------------------------------------------- | 
|                                              |                                              | 
|                                              | Year                                         | 
|                                              |                                              | 
|Management                                    | 2005                                         | 
|                                              |                                              | 

In the outstanding number
  of rights on performance shares in the table above, an estimated total of 329,000
  is related to our discontinued logistics business. Management
    option planNo options were granted in 2005. In 2005 the option plans 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. 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.


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|150 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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|                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------
|Statement of changes
      of outstanding options                                                                    
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Board of Management
      
      (incl former members)                                                               
|                                                                                                                     
|Management                                                                                                           
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Total                                                                                                                
|                                                                                                                     
|1 150%
      of base allocation being the maximum number of options exercisable under
      the performance schedule.



|Historic
      overview outstanding options                      | 2005                    |   | 2004                                        
|---------------------------------------------------------------- | ----------------------- | - | --------------------------------------------
|                                                                 |                         |   |                                             
|                                                                 | Number of
      options |   | Weighted
      average exercise  price(in )
|                                                                 |                         |   |                                             
|                                                                 |                         |   |                                             
|Balance
      at beginning of year                               | 10,717,990              |   | 19.07                                       
|                                                                 |                         |   |                                             
|Granted                                                          |                         |   |                                             
|                                                                 |                         |   |                                             
|Exercised                                                        | (1,101,545              | ) | 25.09                                       
|                                                                 |                         |   |                                             
|Forfeited                                                        | (2,320,397              | ) | 22.06                                       
|                                                                 |                         |   |                                             
|Balance
      at end of year                                     | 7,296,048               |   | 17.63                                       
|                                                                 |                         |   |                                             
|Exercisable
      at 31 December                                 | 1,446,794               |   | 22.80                                       
|                                                                 |                         |   |                                             
|Fair value
      of options (Black-Scholes) at grant date (in ) |                         |   |                                             
|                                                                 |                         |   |                                             
|Fair value
      of options (Monte Carlo) at grant date (in )1  |                         |   |                                             
|                                                                 |                         |   |                                             

|1 | This includes the value
      of marked-based performance conditions regarding total shareholder return.
|- | --------------------------------------------------------------------------------------------------------

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. In the outstanding total
    number of options in the table above an estimated total of 1.9 million options
    with a weighted average exercise price of €17.85 is related to our discontinued
    logistics business.




Bonus/matching plan
    for senior managementMembers of a select group of senior managers were paid 75% of their 2002,
    2003 and 2004 bonus in cash and 25% as a grant of TNT shares with an associated
    matching right in 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.




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|2005
        Annual Report and Form 20-F |  | 151
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

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 precedingfinancial
        year by the weighted average share price on the Euronext Amsterdam on
        the date the grant is made (2005: €20.55/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. The table below summarises
    the status of the number of outstanding rights on matching shares granted
    to senior managers in the current TNT group:


|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                
|-------------------------------------------------------- | ----------------------------------------- |  | -------------------------------------------------- |  | --------------------------------- |  | -------------------------------------------------------------- |  | ------------------------------------------------- |  | ---------------------------------------------------------------
|                                                         | Number
      of matching rights on shares | 
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   | 
|Bonus connecting
      matching rights 
      Management | Year                                      |  | Outstanding
        as
      at
        1 Jan 2005 |  | Granted
        during
      2005 |  | Exercised
        or
      forfeited
        during
      2005 |  | Outstanding
      as
        at 31 Dec
      2005 |  | Remaining
        years
      in
        contractual
      life
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                
|Management                                               | 2003                                      |  | 46,739                                             |  |                                   |  | 1,780                                                          |  | 44,959                                            |  | 0.3                                                            
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                
|                                                         | 2004                                      |  | 97,707                                             |  |                                   |  | 2,921                                                          |  | 94,786                                            |  | 1.3                                                            
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                
|                                                         | 2005                                      |  |                                                    |  | 117,399                           |  | 3,095                                                          |  | 114,304                                           |  | 2.3                                                            
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                
|                                                         |                                           |  | 144,446                                            |  | 117,399                           |  | 7,796                                                          |  | 254,049                                           |  |                                                                
|                                                         |                                           |  |                                                    |  |                                   |  |                                                                |  |                                                   |  |                                                                



In the outstanding number
    of matching rights on shares in the table above, an estimated total of 43,000
    is related to our discontinued logistics business. 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: 2005
      2004Share
        price (in )
      20.71
      
      18.44Volatility
        (%)
      28.35
      
      32.39Vesting
        period (in years)
      3
      
      3Risk
        free rate  (%)
      2.39
      
      4.09Dividend
        yield (%)
      3.13
      
      2.90 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 2005, 2004 and 2003 we purchased
    no shares for hedging purposes.




At 31 December 2005, we
    held a total of 33,251,915 (2004: 12,579,942) shares of which 3,791,438 shares
    were held to cover share schemes (2004: 4,979,942), purchased at a weigthed
    average price per share of €22.06 (2004: 21.92).  O  20DEPRECIATION,
    AMORTISATION AND IMPAIRMENTS: 320 MILLION (2004: 303) Year
          ended at 31 December2005
      2004Amortisation of other
        intangibles
      65
      
      53Depreciation and
        impairment
      255
      
      250property, plant and
        equipmentTotal
      320
      
      303(in € millions) Impairment costs for
    property, plant and equipment of €9 million (2004: 11) are included in
    the depreciation expense.  O  21OTHER OPERATING
    EXPENSES: 647 MILLION (2004: 548) The other operating expenses
    in mail in 2005 were €267 million (2004: 261), in express €271 million
    (2004: 251) and in freight management €38 million (2004: 12). Total advertising
    expenses incurred in 2005 amounted to €15 million (2004: 42), €2
    million in mail and €13 million in express.




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|152 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

Included within other
    operating expenses are costs incurred for services provided by our group statutory
    auditors, PricewaterhouseCoopers Accountants N.V. Included in the table
    is approximately €3 million in 2005 and €3 million in 2004 related
    to fees for services provided relating to our discontinued logistics business. The fees for their services
    can be divided into the following categories: TNT Group
      Year
          ended at 31 December2005
      2004Audit fees
      13
      
      12Audit related fees
      5
      
      3Tax advisory fees
      0
      
      0Other fees
      1
      
      1Total
      19
      
      16(in € millions) Fees for audit services
    include the audit of TNTs annual financial statements, 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, transition to IFRS and consultation
    concerning financial accounting and reporting matters not classified as audit.
    Audited 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, general
    training support for accounting and audit of corporate sustainability reports. O  22NET FINANCIAL INCOME AND EXPENSES Interest and similar
    income: 115 million (2004: 99)
    Interest and similar income in 2005 of €115 million mainly relates to
    interest income on funding our discontinued logistics business of €72
    million, interest of €21 million relating to an income tax refund, interest
    income on loans and deposits of €12 million and other interest income
    relating to outstanding hedges. Interest and similar
    income in 2004 of €99 million mainly relates to interest income on funding
    our discontinued business of €66 million, interest income on loans and
    deposits of €12 million, a one-off gain of €11 million on the unwind
    of a US dollar 435 million swap and other interest income relating to outstanding
    hedges.




Interest and similar
    expenses: 121 million (2004: 117) Year
          ended at 31 December2005
      2004Interest on long
        term liabilities
      54
      
      61Interest added to
        provisions
      2
      
      1Interest on short
        term liabilities
      11
      
      8Foreign currency
        swaps - fair value hedges
      23
      
      9Net foreign exchange
        transaction gains/losses
      2
      
      2Other financial expenses
      29
      
      36Total
      121
      
      117(in € millions) Interest and similar
    expense in 2005 of €121 million mainly relates to interest expense on
    long term borrowings of €54 million and fair value adjustments on the
    outstanding fair value hedges of €23 million. Other financial expenses
    of €29 million mainly relates to interest expense on funding from our
    discontinued logistics business of €21 million. Interest and similar
    expense in 2004 of €117 million mainly relates to interest expense on
    long term borrowing of €61 million and amortisation of expenses relating
    to hedging instruments and of €9 million. Other financial expenses of
    €36 million mainly relates to interest expense on funding from our discontinued
    logistics business of €18 million. O  23INCOME TAXES: 379 MILLION (2004: 375) Income taxes in the statement
    of income of 2005 amount to €379 million (2004: 375), or 32.9% (2004:
    34.2%) of income before income taxes. Of the €379 million, €99 million
    of our total income taxes related to tax authorities outside the Netherlands. Year
          ended at 31 December2005
      2004Dutch statutary income
        tax rate:
      31.5
      
      34.5Adjustment regarding
        effective income tax rates other countries
      (0.9
      )
      (1.9
      )Permanent differences:Non and partly deductible
        costs
      1.4
      
      0.9Exempt income
      (0.4
      )Other
      1.3
      
      0.7Effective income
        tax rate
      32.9
      
      34.2(in percentages)




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        Annual Report and Form 20-F |  | 153
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

Income taxes differ from
    the amount calculated by multiplying the Dutch statutory corporate income
    tax rate with the income before income taxes. In 2005, the effective income
    tax rate was 32.9% (2004: 34.2%), which is higher than the statutory corporate
    income tax rate of 31.5% in the Netherlands (2004: 34.5%). The decline of
    the effective tax rate compared to 2004 is predominantly the result of a decrease
    in the Dutch statutory income tax rate. Income tax expense consists
    of the following: Year
          ended at 31 December2005
      2004Current tax expense
      338
      
      345Changes in deferred
        taxes (excluding acquisitions / foreign exchange effects)
      41
      
      30Total income taxes
      379
      
      375(in € millions)  At
          31 December2005
      2004Income tax receivable
      78
      
      162Income tax payable
      (233
      )
      (130
      )Netted current
        income tax positions
      (155
      )
      32(in € millions) In 2005, the current
    tax expense amounted to €338 million (2004: 345). 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. The following table shows
    the movements in deferred tax assets in 2005: Deferred
          tax assets at 31 December 2004
      253Transfers to assets
        held for sale
      (46
      )Changes credited
        directly to equity
      5Other changes
      (28
      )(De)consolidation/foreign
        exchange effects
      4Deferred tax assets
        at 31 December 2005
      188(in € millions) Deferred tax assets as
    at 31 December 2005 include €36 million related to our discontinued logistics
    business and is included in assets held for sale. €46 million included
    in the table on deferred tax assets 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 assets arise
    because of the following differences: At
          31 December2005
      2004Differences between
        valuation for book and tax purposes of:Provisions
      18
      
      46Property, plant and
        equipment
      6
      
      5Losses carried forward
      71
      
      98Other
      93
      
      104Total deferred
        tax assets
      188
      
      253(in € millions) 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 €93 million (2004: 104) an amount of €42
    million (2004: 45) relating 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 2005 amounted to €662
    million (2004: 627). With these losses carried forward, future tax benefits
    of €211 million could be recognised (2004: 202). 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
    in the foreseeable future. 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 legislative changes.
    As a result we have not recognised €140 million (2004: 123) of the potential
    future tax benefits and have recorded net deferred tax assets of €71
    million at the end of 2005 (2004: 79). The expiration of total
    accumulated losses is presented in the table below: 2006
      102007
      62008
      122009
      112010 and thereafter
      137Indefinite
      486Total
      662(in € millions)




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The following table shows
    the movements in deferred tax liabilities in 2005: Deferred tax liabilities
        at 31 December 2004
      236Transfers to liabilities
        related to assets classified as held for sale
      (20
      )Changes
      17Deferred tax liabilities
        at 31 December 2005
      233(in € millions) Deferred tax liabilities
    as at 31 December 2005 include €30 million related to our discontinued
    logistics business and are included in liabilities related to assets classified
    as held for sale. €20 million included in the table on deferred tax liabilities
    as transferred to liabilities related to assets classified as held for sale
    represents the balance as at 1 January 2005 and does not reflect the movements
    during 2005. Deferred tax liabilities
    arise because of the following differences: At
          31 December2005
      2004Differences between
        valuation for book and tax purposes of:Provisions
      153
      
      122Property, plant and
        equipment
      62
      
      73Other
      18
      
      41Total deferred
        tax liabilities
      233
      
      236(in € millions) Multinational 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.




NOTES
    TO THE CONSOLIDATED CASH FLOW STATEMENTS O  24NET CASH FROM OPERATING ACTIVITIES: 984 MILLION (2004: 708) In 2005, net cash provided
    by operating activities was €984 million, which is an increase of 39%
    compared to 2004 ( €708 million). Profit before income taxes contributed
    €1,151 million or €1,471 million if adjusted for the non-cash impact
    of depreciation, amortisation and impairments, an increase of €72 million
    or 5% compared to last year (€1,399 million). The changes in pension
    liabilities of €123 million (2004: 254) reflects the total non-cash charges
    for the defined benefit pension schemes of €141 million, offset by our
    total cash contributions of €166 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 €168 million lower than
    last year, mainly due to contributions of €142 million related to the
    Personal Seniors Arrangement in 2004 and due to €32 million lower contributions
    as prescribed by the minimum funding requirements of De Nederlandsche Bank
    (DNB), which amounted to €59 million in 2005 (2004: 91). 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 €180 million in 2005 as compared to a decrease of €21 million
    in 2004. Most of the increase of the accounts receivable position related
    to an increase of trade receivables that moved unfavourably by €165 million
    (2004: 77), due to a combination of additional revenue and increased debtor
    days. Trade payables negatively impacted the cash flow by €77 million
    as a result of a decrease of creditor days compared to last year. Other current
    liabilities moved favourably by €66 million, including higher accruals
    for subcontractors and claims. Interest and similar
    expenses amounted to €121 million, including non-cash hedge results of
    €21 million. The cash outflow for interest paid totalled €84 million.
    Income taxes paid was €130 million (2004: 404). 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 a decrease of the Dutch statutory tax rate from 34.5% in
    2004 to 31.5% in 2005.




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|O  25NET CASH USED IN INVESTING ACTIVITIES: (265) MILLION (2004:-268)
      In 2005, the total
        payments for acquisitions of group companies amounted to €36 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
        Limited (€ 6 million) and the assets of Rheinkurier GmbH ( €3
        million). Express acquired for a total amount of €6 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 acquisitions were fully discharged
        by means of cash. The investments in associated companies primarily related
        to additional capital contributions in one of our associates of €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 Postal Preference Service Limited in
        the mail segment and Mistral Air in the express segment.
      In 2005, capital expenditures
        on property, plant and equipment amounted to €233 million (2004:
        225). Of this amount, €80 million (2004: 75) related to mail, €143
        million (2004: 144) to express (including freight management of €3
        million for 2005 and €1 million for 2004) 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: 21), 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).
      Capital 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 ( €98 million). 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,
        most of which were less than €1 million individually and included
        building refurbishments mainly in the Netherlands, renewal of IT equipment
        and software, operational equipment and various other capital expenditures.
      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. |  | Capital expenditure
        on property, plant and equipment and other intangible assets by our express
        division (including freight management) totalled €197 million in
        2005, which was an increase of 9% compared to 2004 ( €180 million).
      During 2005, capital
        expenditures on other intangible assets totalled €54 million (2004:
        36) and related primarily to the development of financial systems (e-back
        office) software (€22 million) and further enhancements to our international
        shared systems.
      Some of the more
        significant express capital expenditures 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). Capital expenditures
        on property, plant and equipment and other intangible assets by our our
        freight management operations amounted to €3 million (2004: 8).
      The net cash generated
        by other changes in financial fixed assets totalled €18 million (2004:
        164) and is mainly attributable to settling net balances relating to our
        disposal of Global Collect B.V. Interest and similar income amounted to
        €115 million of which €72 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.
      O  26NET CASH USED IN FINANCING ACTIVITIES: (779) MILLION (2004:
        -284)
      A final cash dividend
        for 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.
      In 2005, a cash outflow
        of €259 million has been 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 €29 million (2004:
        outflow of 62).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 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The total proceeds from
    long term borrowing of €35 million (2004: 16) consist mainly of a €14
    million additional issuance of the 3.875% 2015 Eurobond, a €13 million
    increase in bank loans, and a €7 million (2004: 11) non-cash income from
    finance leases. A total of €6 million (2004: 78) of repayments to long
    term borrowings related, amongst others to a €4 million (2004: 9) scheduled
    payment on aircraft leases and other leases and to a €2 million (2004:
    69) of repayments of bank loans. The 2004 repayments of bank loans, mainly
    relates to the bank loans granted to TNT Freight Management (€53 million)
    and to various other movements in non-interest bearing liabilities.




Movements in short term
    liabilities resulted in a net cash outflow of €55 million (2004: 48).
    The total repayments to short term borrowings mainly relates to repayments on aircraft
    leases and other leases of €47 million and a cash outflow of €20
    million (2004: 8) regarding hedge transactions partly offset by cash inflow
    relating to short term liabilities of €14 million (2004: 8). In 2004
    short term liabilities also decreased due to the repayment of short term bank
    loans in TNT Freight Management of €20 million and because of various
    other repayments of loans within our express and mail divisions.


ADDITIONAL
  NOTES

O  27BUSINESS COMBINATIONS

|Summary
      of principal acquisitions in the year        |        
|---------------------------------------------------------- | -------
|                                                           |        
|Company
      name                                         | Segment
|                                                           |        
|Euro Mail B.V.                                             | Mail   
|                                                           |        
|Circular Distributors
      Limited (remaining shares)     | Mail   
|                                                           |        
|Door-to-door d.o.o./Asinus
      d.o.o.                    | Express
|                                                           |        
|Rheinkurier GmbH                                           | Mail   
|                                                           |        
|Other acquisitions
      (including some remaining shares) |        
|                                                           |        
|Total                                                      |        
|                                                           |        
|(in € millions)                                            |        



Additions in 2005 include
    €26 million (2004: 169) 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 2005 have generally
    centred on addressing our long term strategic plans by, amongst others, the
    direct marketing mailing activities for small and medium-sized enterprises.




The pre-acquisition balance
    sheet and the opening balance sheet of the acquired businesses is summarised
    in the table below:




|                                   | Year
        ended at 31 December 2005          |  
|---------------------------------- | ----------------------------------------------- | -
|                                   |                                                 |  
|                                   | Pre-acquisition
        
        balance sheets |  
|                                   |                                                 |  
|Goodwill                           | 0                                               |  
|                                   |                                                 |  
|Other non-current assets           | 4                                               |  
|                                   |                                                 |  
|Total non-current assets           | 4                                               |  
|                                   |                                                 |  
|Total current assets               | 5                                               |  
|                                   |                                                 |  
|Total assets                       | 9                                               |  
|                                   |                                                 |  
|                                   |                                                 |  
|Equity                             | (15                                             | )
|                                   |                                                 |  
|Non-current liabilities            | 6                                               |  
|                                   |                                                 |  
|Current liabilities                | 18                                              |  
|                                   |                                                 |  
|Total liabilities
      and equity | 9                                               |  
|                                   |                                                 |  
|(in € millions)                    |                                                 |  

Other non-current assets
    include an amount of approximately€6
    million relating to separately identified intangible assets with respect to
    2005 acquisitions.









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Pro-forma resultsThe following represents the pro-forma results of TNT for 2005 and 2004
    as though the acquisitions had taken place on 1 January 2004. These pro-forma
    results do not necessarily




reflect the results that
    would have arisen had these acquisitions actually taken place on 1 January
    2004, nor are they necessarily indicative of the future performance of TNT.
    This calculation also includes the impact of amortisation.




|                                                       | Year
        ended at 31 December,    |     
|------------------------------------------------------ | ------------------------------------- | ----
|                                                       |                                      
|                                                       | Pro-forma
        results (unaudited) |     
|                                                       |                                      
|                                                       | 2005                                  | 2004
|                                                       |                                       |     
|Total revenues                                         | 10,124                                |     
|                                                       |                                       |     
|Profit for the period
      from continuing operations | 773                                   |     
|                                                       |                                       |     
|Profit attributable
      to the shareholders          | 660                                   |     
|                                                       |                                       |     
|Earnings per ordinary
      share(in € cents)          | 145.3                                 |     
|                                                       |                                       |     
|Earnings per diluted
      ordinary share (in € cents) | 144.6                                 |     
|                                                       |                                       |     
|(in € millions,
      except per share figures)        |                                       |     



O  28
    COMMITMENTS AND CONTINGENCIES (No corresponding financial
    statement number) At
          31 December2005
      2004**Commitments
        relating to:**Financial guarantees
      191
      
      240Operating guarantees
      76
      
      110Rent and operating
        lease
      1,251
      
      1,675Capital expenditure
      16
      
      33Repurchases own shares
      769
      
      259Purchase commitments
      100
      
      84(in € millions) Commitments and contingencies
    as at 31 December 2005 related to our discontinued logistics business amounts
    to €706 million. See further analysis in note 8. Of the total commitments
    indicated above, €359 million are of a short term nature (2004: 593). Financial and operating
    guaranteesTotal financial guarantees at 31 December 2005 were €267 million
    (2004: 350) of which €99 million (2004: 164) amounted to corporate guarantees.
    These guarantees were mainly issued in connection with our obligations under
    lease contracts, custom duty deferment and local credit lines. The increase
    of corporate guarantees to banks new mainly related to local credit lines. Furthermore, banks and
    other financial institutions have issued guarantees to cover obligations of
    group companies up to an amount of €147 million (2004: 127). These guarantees
    were mainly issued in connection with our obligations under lease contracts,
    customs duty deferment and local credit lines. The obligations under the guarantees
    issued by banks and other financial institutions have been secured by our
    company or by our subsidiaries. The €21 million (2004: 59) of remaining
    guarantees in 2005 relates to bank guarantees issued locally by group companies.




Rent and operating
    lease contractsIn 2005 operational lease expenses (including rental) in the consolidated
    statements of income amounted to €380 million (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 December**Payable in
        the period**
      2005
      2004Less than 1 year
      229
      
      393Between 1 and 2 years
      210
      
      331Between 2 and 3 years
      182
      
      256Between 3 and 4 years
      140
      
      192Between 4 and 5 years
      105
      
      145Thereafter
      385
      
      358Total
      1,251
      
      1,675Of which guaranteed
        by a third 
        party/customers
      3
      
      98(in € millions) Capital expenditureCommitments in connection with capital expenditure are €16 million
    (2004: 33), of which €14 million is related to property, plant and equipment
    and €2 million related to intangible assets. These commitments primarily
    related to projects within the operations of the mail division. These projects
    include sequence sorting and tray cart unloading. Repurchase of sharesOn 6 December 2005, we announced to return capital to our shareholders
    by repurchasing ordinary shares. This share buy back programme started on
    6 December 2005 and is expected to end four months after 6 December 2005 unless
    prior to such date: (a) the aggregate value of shares acquired would exceed
    €1 billion; (b) 10% of the outstanding ordinary shares have been repurchased,
    including any ordinary shares already held by the company; or (c) if a cash
    or exchange offer with respect to the shares of TNT is publicly launched through
    the publication of an offer document.


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As at 31 December 2005,
    we repurchased 9,020,000 of our ordinary shares for a total amount of €231
    million. Note 40 includes a table summarising our repurchases during December
    2005. Under this repurchase programme we anticipate purchasing additional
    shares with a value of €769 million. It is our intention to cancel the
    ordinary shares and intend to request for such cancellation to be approved
    by our shareholders. On 7 April 2005, TNTs
    shareholders meeting mandated the Board of Management to repurchase
    ordinary shares for a period of eighteen months. Given the share buy back
    value of €1.0 billion, the approximate number of ordinary shares to be
    repurchased under the repurchase programme is approximately 42.6 million,
    calculated on the basis of the last trade prior to commencement of the repurchase
    programme. Purchase commitmentsAt 31 December 2005 we had unconditional purchase commitments of €100
    million (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 2005, TNT continued
    to investigate and analyse its global tax position. As a result we currently
    estimate the realistic range to reflect our total contingent liability in
    this regard is between 150 million and 550 million. 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. The 2004
    investigation, concluded that not all relevant details in connection with
    these tax matters were adequately disclosed to the UK tax authorities and
    PricewaterhouseCoopers. In addition to this investigation, in 2004 our audit
    committee, with the assistance of external legal and tax advisors, conducted
    a review of other UK tax matters that arose from the same period. 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 will cover UK tax matters that were not the
    subject of the original investigation. We are in continuing discussions with
    the UK tax authorities in this connection, and we do not expect that these
    matters will be resolved with the UK tax authorities before the end of 2006. 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, we have
    determined that no provision or contingent liability is required as a result
    of this investigation. We have also analysed and
    continue to analyse the tax positions of some of our subsidiaries with respect
    to other countries. Our investigations and analyses,
    which are ongoing, concern, 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. Some of these
    structures which were set up in consultation with outside advisors, have been,
    or might be, challenged by various tax authorities. An item that will be addressed
    in the addendum to our report to the UK tax authorities concerns whether some
    of our subsidiaries might have been resident in the United Kingdom prior to
    the acquisition of TNT Limited in December 1996 and, if so, whether tax on
    capital gains would have been due when the tax residency of those subsidiaries
    later may have moved to another European country. We are still investigating
    the residency of the relevant subsidiaries, but even if they were UK resident,
    we believe that the imposition of such a tax on capital gains would be impermissibly
    discriminatory under EU law. The addendum will also
    deal among other things, with certain transfer pricing issues in respect of
    which on 9 February 2005 we made a payment on account to the UK tax authorities
    of 22 million. We charged this payment against a tax accrual that we
    recorded in 2004 in connection with this issue. As part of a pilot publicly
    announced to the Dutch parliament to which the Dutch Ministry of Finance and
    the Confederation of Netherlands Industry and Employers (VNO-NCW) are committed,
    we recently signed a compliance covenant with the Dutch tax authorities 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




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take a clear position
    on such issues swiftly. An example of what we expect to discuss is the group-wide
    finance structure we have applied in the past and the structure we intend
    to apply in the future. From the extensive review
    to date of our global tax position, on the basis of the facts and circumstances
    as currently known and advice received from external advisors, we currently
    believe that it is unlikely that we will incur an additional liability beyond
    what we have accrued to date, and thus we have not made any further provision
    in connection with these matters in our financial statements for 2005. To
    date no assessments relating to the items under investigation or analysis
    have been raised, and it is difficult to assess if and when, and if so, for
    what amount, any particular assessment might be raised. Our interpretation
    of past facts and circumstances and relevant tax laws and regulations may
    be open to challenge. 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. Although we currently believe
    that it is unlikely that we will incur an additional liability beyond what
    we have accrued to date, we estimate that the realistic range to reflect our
    total contingent liability in this regard, including potential penalties and
    interest, is between 150 million and 550 million. This estimate
    incorporates our current assessment of the matters underlying the contingent
    liability disclosure in our audited financial statements for 2004. This estimate
    is based on a probability-weighted assessment of our estimated total theoretical
    liability. It has been tested against possible settlement negotiation scenarios.
    Altogether this estimate represents 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, 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 of the realistic
    range of the total contingent liability of 150-550 million 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 assessments 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. Contingent legal liabilitiesORDINARY
    COURSE LITIGATION
    We 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 FRANCE
    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. A ruling of the court
    of Bordeaux which was in our favour in first instance, ordering the release
    of our French express subsidiaries from all charges, was upheld by the court
    of appeal in Bordeaux by judgement of 27 January 2004. In another case the court
    of appeal in Paris ruled against TNT Express International SNC and its regional
    operations director, and imposed on both TNT Express International SNC and
    the regional operations director being sentenced to fines. TNT Express International
    SNC has decided to take the case to the French supreme court, who rejected
    our request. We have sent a letter to the French Public Ministry, and at this
    moment we are still waiting for a response. In the case before the
    tribunal correctional of Toulouse (hearing on 17 May 2005) in which all defendants
    were acquitted on 18 October 2005, no appeal by the French Public Ministry
    was lodged against the judgment so this case is now closed. There is one case pending
    in a court against French Express subsidiaries, some of its board members
    and/or depot managers. The case before the tribunal
    correctional of St Etienne who had pronounced a decision of discharges on
    26 May 2005. On 6 June 2005, the French Public Ministry appealed this decision.
    We are still waiting for the decision of the court of appeals of Lyon in 2006. Finally, a case is pending
    before the tribunal correctional of Bobigny regarding TNT Express International
    SNC, which could be ruled on before the third quarter of 2006. LIÈGE COURT
    CASE
    Judicial proceedings and claims were launched before the courts of Liège
    by people living around Liège airport to stop night flights and seek
    indemnification from the Walloon Region, Liege airport and the operators (including
    TNT). These proceedings were rejected in June 2004 by the Liège court
    of appeal. The court considered the obligations of the defendants (notably
    the Walloon Government, the Airport Authority and TNT) under the various applicable
    international and national conventions and regulations and concluded that
    there was no violation of any of these by the defendants. The plaintiffs have appealed
    this decision to the Belgian supreme court. The defendants, including TNT,
    have filed


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|160 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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their response briefs
      with the same court. The final decision is not expected before the first
      half of 2006 at the earliest. The arguments developed in the appeal are
      technical, since the supreme court may only examine pure points of law or
      procedural items, and not facts. Each of the legal arguments invoked before
      the supreme court were already extensively developed before the Liège
      court of appeal, which rejected each and all of them with a substantiated
      legal reasoning in its decision of June 2004. A successful appeal would
      entail that the matter be sent to another Belgian court of appeal for a
      new exchange of briefs, pleadings and ruling. The outcome of this case is
      hard to predict.




O  29EARNINGS 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. There
    were 7,296,048 stock options outstanding as at 31 December 2005 (2004: 10,080,990).
    There was no difference in the income attributable to shareholders in computing
    our basic and diluted earnings per share. The following table to
    summarise our computation related to earnings per share and diluted earnings
    per share:






|Year
        averages and numbers at 31 December                                    |            
|----------------------------------------------------------------------------------- | -----------
|                                                                                    | 2005       
|                                                                                    |            
|Number of issued and
      outstanding ordinary shares                              | 479,999,999
|                                                                                    |            
|Shares held by the
      company to cover share plans                               | 3,791,438  
|                                                                                    |            
|Shares held by the
      company for cancellation                                   | 29,460,477 
|                                                                                    |            
|                                                                                    |            
|                                                                                    |            
|Average number of ordinary
      shares per year                                    | 454,367,662
|                                                                                    |            
|Diluted number of ordinary
      shares per year                                    | 1,992,957  
|                                                                                    |            
|Average number of
      ordinary shares per year on fully diluted basis in the year | 456,360,619
|                                                                                    |            

O  30JOINT 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. Key pro rata information regarding those
    joint ventures in which we have joint decisive influence over operations is
    set forth below and includes balances at 50%: Our only significant joint
    venture as at 31 December 2005 is the 50% interest in Postkantoren B.V. with
    Postbank N.V. to operate post offices in the Netherlands. Our 50% interest in a
    joint venture with Shanghai Automotive Industry Sales Corporation called AnjiTNT
    Automotive Logistics Company Limited is part of the discontinued logistics
    business.




Year
          ended at 31 December2005
      2004Non-current assets
      62
      
      56Current assets
      200
      
      202Equity
      64
      
      60Non-current liabilities
      113
      
      119Current liabilities
      85
      
      79Net sales
      408
      
      377Operating income
      16
      
      15Profit attributable
        to the shareholders
      12
      
      9Net cash provided
        by operating activities
      26
      
      14Net cash used in
        investing activities
      (19
      )
      (9
      )Net cash used in
        financing activities
      (7
      )
      (22
      )**Changes in
        cash and cash equivalents**
      0
      
      (17
      )(in € millions)








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        Annual Report and Form 20-F |  | 161
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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O  31RELATED PARTY WITH THE STATE OF THE NETHERLANDS
    (No corresponding financial statement number) The State of the Netherlands
    as shareholder
    On 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,
    representing approximately 16% in our company. By the sale and transfer the
    State of the Netherlands reduced
      its ownership in our capital from 34.8% to 18.6% and it has been further
      reduced to approximately 10% in July 2005 (see below). We repurchased 20.7
      million of the total amount of shares sold by the State of the Netherlands.
      Transfer of the repurchased ordinary shares took place in two tranches.
      The 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 43.3 million ordinary shares in a placement to ABN Amro Holding N.V.
      and Citigroup Inc. The sale by the State of the Netherlands reduced the
      holding of the State of the Netherlands in our company to approximately
      10% as at 31 December 2005. Special shareThe State of the Netherlands holds a special share that gives it the
      right to approve decisions that lead to fundamental changes in our group
      structure. The State of the Netherlands has committed itself to exercising
      the rights attached to the special share only to safeguard the general interest
      in having an efficiently operating postal system in the Netherlands and
      also to protect its financial interest as a shareholder. The State of the
      Netherlands may not exercise its special share to protect us from unwanted
      shareholder influence. The State of the Netherlands may not transfer or
      encumber the special share without the approval of our Board of Management
      and Supervisory Board. Ownership of the special share gives the State of
      the Netherlands the right to approve certain actions, 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 TPG 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
          TPG Post B.V., including any amendment to the articles of association
          with respect to–
      a modification
        of the objects clause that relates to performance of the concession obligations,–
      the
        creation of new classes of shares, profit sharing certificates or other
        securities entitling the holder thereof to the earnings and/or shareholders
        equity of the company,–
      the
        cancellation of the special share,




–
      the
        cancellation of the preference shares B,–
      the
        transfer of the special share, and–
      the
        amendment of the rights attached to the special share. No change is currently
    proposed to the status of the special share owned by the State of the Netherlands.
    However, as part of its intention to reduce its involvement in our affairs,
    the State of the Netherlands is considering the possibility of limiting the
    applicability of rights attached to the special share. 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 46 of our financial statements. O  32OTHER 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. In the year ended 31 December
    2005, sales made by TNT companies to its joint ventures amounted to €42million
    (2004: 24). Purchases of TNT from joint ventures amounted to €131 million
    (2004: 125). The net amounts due from joint venture entities amounted to €49
    million (2004: 49). As at 31 December 2005 loans receivable from investments
    in associates as disclosed in note 3 and 5 amounted to €3 million (2004:
    8). 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. O  33SEGMENT INFORMATION
    (No corresponding financial statement number) Until 2004 we presented
    our three divisions Mail, Express and Logistics as our reportable segments.
    In December 2005 we announced a strategy to focus on our core competency of
    providing delivery services by expertly managing delivery networks. Based
    on our refined strategy we will now manage our business through two divisions:
    mail and express, with the express division including two reportable segments:
    express and freight management.




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|162 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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The majority of our former
  logistics division is reported as discontinued operations/assets held for sale.
  Our network related logistics business has been transferred to the express division. The mail business provides
  services for collecting, sorting, transporting and distributing domestic and
  international mail. The express business provides demand door-to-door express
  delivery services for customers sending documents, parcels and freight. The
  freight management services comprise primarily air and sea freight transportations
  by acquiring cargo space from airline and shipping firms. We have transferred
  our innight activities to
    the express segment and have restated the comparable prior year numbers.




Net
          sales per geographic region
      Year
          ended at 31 December2005
      2004EuropeThe
        Netherlands
      3,727
      
      3,659United
        Kingdom
      1,271
      
      1,191Italy
      701
      
      658Germany
      827
      
      739France
      651
      
      616Sweden
      306
      
      102Rest
        of Europe
      1,247
      
      1,011AmericasUSA
        and Canada
      135
      
      120South
        & Middle America
      86
      
      49Africa & the
        Middle East
      94
      
      67Australia & Pacific
      483
      
      426AsiaChina
        and Taiwan
      290
      
      233Rest
        of Asia
      232
      
      206Total net sales
      10,050
      
      9,077(in € millions)


|2005                                                       | Mail   |   | Express |   | Freight
        management |   | Inter-company |   | Non-allocated |   | **Total** |  
|---------------------------------------------------------- | ------ | - | ------- | - | -------------------------- | - | ------------- | - | ------------- | - | --------- | -
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Net sales                                                  | 3,950  |   | 5,290   |   | 780                        |   |               |   | 30            |   | 10,050    |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Inter-company sales                                        | 9      |   | 14      |   | 9                          |   | (32           | ) |               |   |           |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Other operating revenues                                   | 25     |   | 30      |   |                            |   |               |   |               |   | 55        |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Total operating
      revenues                             | 3,984  |   | 5,334   |   | 789                        |   | (32)          |   | 30            |   | 10,105    |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Other income                                               | 26     |   |         |   |                            |   |               |   | 12            |   | 38        |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Depreciation/impairment
      property, plant and          | (108   | ) | (139    | ) | (3                         | ) |               |   | (5            | ) | (255      | )
|equipment                                                  |        |   |         |   |                            |   |               |   |               |   |           |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Amortisation/impairment
      other intangibles            | (20    | ) | (31     | ) | (14                        | ) |               |   |               |   | (65       | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Total operating income                                     | 777    |   | 474     |   | 11                         |   |               |   | (103          | ) | 1,159     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Net financial income/(expense)                             |        |   |         |   |                            |   |               |   |               |   | (6        | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Results from investments
      in associates               |        |   |         |   |                            |   |               |   |               |   | (2        | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Income tax                                                 |        |   |         |   |                            |   |               |   |               |   | (379      | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Profit/(loss) from
      discontinued operations           |        |   |         |   |                            |   |               |   |               |   | (111      | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Profit/loss attributable
      to minority interests       |        |   |         |   |                            |   |               |   |               |   | (2        | )
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Profit/loss attributable
      to the shareholders         |        |   |         |   |                            |   |               |   |               |   | 659       |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Goodwill paid in the
      year                            | 21     |   | 5       |   |                            |   |               |   |               |   | 26        |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Intangible assets                                          | 264    |   | 1,358   |   | 213                        |   |               |   | 3             |   | 1,838     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Capital expenditure
      on property, plant and equipment | 80     |   | 140     |   | 3                          |   |               |   | 10            |   | 233       |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Property, plant and
      equipment                        | 702    |   | 825     |   | 9                          |   |               |   | 16            |   | 1,552     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Investments in associates                                  |        |   |         |   | 3                          |   |               |   | 44            |   | 47        |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Accounts receivable                                        | 395    |   | 923     |   | 127                        |   |               |   | 26            |   | 1,471     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Total assets 1                                             | 2,120  |   | 3,492   |   | 406                        |   |               |   | 2,378         |   | 8,396     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Total liabilities 2                                        | 1,457  |   | 1,048   |   | 156                        |   |               |   | 2,456         |   | 5,117     |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|Number of employees                                        | 77,447 |   | 48,574  |   | 2,286                      |   |               |   |               |   | 128,307   |  
|                                                           |        |   |         |   |                            |   |               |   |               |   |           |  
|(in €
      millions, except employees)                   

|1 | Identifiable assets
      also used for the segments have been allocated on the basis of estimated
      usages. The impact of our discontinued operations is included in the non-allocated
      segment.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Includes all liabilities
      (non-current, current). The impact of our discontinued logistics operations
      is included in the non-allocated segment.                                                





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        Annual Report and Form 20-F |  | 163
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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The basis of allocation
    of net sales by geographical areas is the country or region in which the entity
    recording the sales is located. Total assets of our company
    at 31 December 2005 and the capital expenditures in property, plant and equipment
    in 2005 were located as follows:




Location of total assets
  (excluding held for sale) at 31 December 2005 and geographic build-up capital
  expenditures 2005

|                               |                                | Intangible
        assets |       | Property,
        plant and equipment |     | Financial
        fixed assets |       | Current
        assets |       | Total |     | Capital
        expenditures PPE | 
|------------------------------ | ------------------------------ | ------------------------- | ----- | ------------------------------------- | --- | ------------------------------ | ----- | ---------------------- | ----- | ----- | --- | -------------------------------- | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                  | 
|Europe                         |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | The
        Netherlands 1      | 980                       |       | 756                                   |     | 99                             |       | 789                    |       | 2,624 |     | 90                               | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | United
        Kingdom         | 163                       |       | 400                                   |     | 1                              |       | 323                    |       | 887   |     | 49                               | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | Italy                          | 34                        |       | 32                                    |     | 40                             |       | 254                    |       | 360   |     | 9                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | Germany                        | 73                        |       | 57                                    |     | 85                             |       | 113                    |       | 328   |     | 7                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | France                         | 288                       |       | 62                                    |     | 3                              |       | 141                    |       | 494   |     | 12                               | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | Sweden                         | 212                       |       | 13                                    |     | 4                              |       | 53                     |       | 282   |     | 6                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | Rest
        of Europe         | 61                        |       | 128                                   |     | 12                             |       | 343                    |       | 544   |     | 31                               | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                  | 
|Americas                       |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | USA
        and Canada         | 1                         |       | 3                                     |     | 2                              |       | 41                     |       | 47    |     | 2                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                  | 
|                               | South
        & Middle America |                           |       | 2                                     |     | 1                              |       | 28                     |       | 31    |     | 1                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|Africa &
      the Middle East |                                |                           | 3     |                                       |     |                                | 31    |                        | 34    |       | 2   |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|Australia
      & Pacific      | 20                             |                           | 74    |                                       | 19  |                                | 67    |                        | 180   |       | 12  |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|Asia                           |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | China
        and Taiwan       | 4                         |       | 11                                    |     |                                |       | 97                     |       | 112   |     | 7                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|                               | Rest
        of Asia           | 2                         |       | 11                                    |     | 7                              |       | 75                     |       | 95    |     | 5                                | 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|Total                          | 1,838                          |                           | 1,552 |                                       | 273 |                                | 2,355 |                        | 6,018 |       | 233 |                                 
|                               |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 
|(in €
      millions)          |                                |                           |       |                                       |     |                                |       |                        |       |       |     |                                 

|1 | Including TNT goodwill
      which is not allocated to other countries or regions.
|- | ----------------------------------------------------------------------------------



|                                                                     |       |  |         |  |                            |  |               |  |           | 
|-------------------------------------------------------------------- | ----- |  | ------- |  | -------------------------- |  | ------------- |  | --------- | 
|Breakdown of property,
      plant and equipment at 31 December 2005 | Mail  |  | Express |  | Freight
        management |  | Non-allocated |  | **Total** | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|Land and buildings                                                   | 470   |  | 330     |  | 1                          |  | 4             |  | 805       | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|Plant and equipment                                                  | 176   |  | 137     |  |                            |  |               |  | 313       | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|Other                                                                | 43    |  | 327     |  | 8                          |  | 12            |  | 390       | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|Construction in progress                                             | 13    |  | 31      |  |                            |  |               |  | 44        | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|Total                                                                | 702   |  | 825     |  | 9                          |  | 16            |  | 1,552     | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|as
      % of total property, plant and equipment                    | 45.2% |  | 53.2%   |  | 0.6%                       |  | 1.0%          |  | 100.0%    | 
|                                                                     |       |  |         |  |                            |  |               |  |           | 
|(in € millions,
      except percentages)                            |       |  |         |  |                            |  |               |  |           | 



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|164 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

|Location of property,
      plant and equipment at
      31 December 2005 |  | Mail |  | Express |  | Freight
        management |  | Non-allocated |  | Total | 
|------------------------------------------------------------------------- |  | ---- |  | ------- |  | -------------------------- |  | ------------- |  | ----- | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Europe                                                                    |  |      |  |         |  |                            |  |               |  |       | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|The
      Netherlands                                                     |  | 657  |  | 85      |  | 2                          |  | 12            |  | 756   | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|United
      Kingdom                                                      |  | 12   |  | 387     |  | 1                          |  |               |  | 400   | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Italy                                                                     |  | 4    |  | 28      |  |                            |  |               |  | 32    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Germany                                                                   |  | 2    |  | 55      |  |                            |  |               |  | 57    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|France                                                                    |  |      |  | 62      |  |                            |  |               |  | 62    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Sweden                                                                    |  |      |  | 11      |  | 2                          |  |               |  | 13    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Rest
      of Europe                                                      |  | 25   |  | 101     |  | 2                          |  |               |  | 128   | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Americas                                                                  |  |      |  |         |  |                            |  |               |  |       | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|USA
      and Canada                                                      |  |      |  | 2       |  | 1                          |  |               |  | 3     | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|South
      & Middle America                                              |  |      |  | 2       |  |                            |  |               |  | 2     | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Africa
      & the Middle East                                            |  |      |  | 3       |  |                            |  |               |  | 3     | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Australia
      & Pacific                                                 |  |      |  | 73      |  | 1                          |  |               |  | 74    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Asia                                                                      |  |      |  |         |  |                            |  |               |  |       | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|China
      and Taiwan                                                    |  |      |  | 7       |  |                            |  | 4             |  | 11    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Rest
      of Asia                                                        |  | 2    |  | 9       |  |                            |  |               |  | 11    | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|Total                                                                     |  | 702  |  | 825     |  | 9                          |  | 16            |  | 1,552 | 
|                                                                          |  |      |  |         |  |                            |  |               |  |       | 
|(in € millions)                                                           |  |      |  |         |  |                            |  |               |  |       | 

|Location of employees
      at year end 1                                                                                      |  | Mail   |  | Express |  | Freight
        management |  | 2005    |  | 2004    | 
|------------------------------------------------------------------------------------------------------------------------------ |  | ------ |  | ------- |  | -------------------------- |  | ------- |  | ------- | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Europe                                                                                                                         |  |        |  |         |  |                            |  |         |  |         | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|The
      Netherlands                                                                                                          |  | 60,743 |  | 3,013   |  | 172                        |  | 63,928  |  | 69,994  | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|United
      Kingdom                                                                                                           |  | 1,011  |  | 10,846  |  | 118                        |  | 11,975  |  | 11,820  | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Italy                                                                                                                          |  | 1,162  |  | 3,055   |  |                            |  | 4,217   |  | 4,353   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Germany                                                                                                                        |  | 12,828 |  | 5,151   |  | 39                         |  | 18,018  |  | 16,145  | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|France                                                                                                                         |  | 25     |  | 4,639   |  | 43                         |  | 4,707   |  | 4,571   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Sweden                                                                                                                         |  | 5      |  | 352     |  | 374                        |  | 731     |  | 650     | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Rest
      of Europe                                                                                                           |  | 1,296  |  | 8,426   |  | 448                        |  | 10,170  |  | 7,619   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Americas                                                                                                                       |  |        |  |         |  |                            |  |         |  |         | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|USA
      and Canada                                                                                                           |  | 209    |  | 769     |  | 288                        |  | 1,266   |  | 1,487   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|South
      & Middle America                                                                                                   |  | 19     |  | 519     |  | 151                        |  | 689     |  | 852     | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Africa & the Middle
      East                                                                                                 |  | 6      |  | 1,039   |  | 57                         |  | 1,102   |  | 1,387   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Australia & Pacific                                                                                                            |  |        |  | 4,928   |  | 219                        |  | 5,147   |  | 5,246   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Asia                                                                                                                           |  |        |  |         |  |                            |  |         |  |         | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|China
      and Taiwan                                                                                                         |  | 143    |  | 2,318   |  | 236                        |  | 2,697   |  | 2,486   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Rest
      of Asia                                                                                                             |  |        |  | 3,519   |  | 141                        |  | 3,660   |  | 3,652   | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|Total                                                                                                                          |  | 77,447 |  | 48,574  |  | 2,286                      |  | 128,307 |  | 130,262 | 
|                                                                                                                               |  |        |  |         |  |                            |  |         |  |         | 
|1     
      Including temporary employees on our payroll. The 2004 numbers have been
      adjusted for comparative purposes.



|                                     | Year
        ended at 31 December |     
|------------------------------------ | --------------------------------- | ----
|Non-allocated operating
      income |                                   | 2005
|                                     |                                   |     
|Non-core disposals                   |                                   | 12  
|                                     |                                   |     
|Business initiatives                 |                                   | (61 
|                                     |                                   |     
|World Food Programme                 |                                   | (9  
|                                     |                                   |     
|Other costs                          |                                   | (45 
|                                     |                                   |     
|Total                                |                                   | (103
|                                     |                                   |     
|(in € millions)                      |                                   |     



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|2005
        Annual Report and Form 20-F |  | 165
|---------------------------------------- |  | ---

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  to Contents





|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

In 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, 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).


|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | - | ----------------- | - | -------------------------- | - | ------------- | - | ------------- | - | ------- | -
|2004                                                                                                                                  |  | Mail   |   | Express
        1 |   | Freight
        management |   | Inter-company |   | Non-allocated |   | Total   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Net sales                                                                                                                             |  | 3,881  |   | 4,893             |   | 279                        |   |               |   | 24            |   | 9,077   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Inter–company
      sales                                                                                                             |  | 6      |   | 6                 |   |                            |   | (12           | ) |               |   |         |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Other operating revenues                                                                                                              |  | 5      |   | 24                |   |                            |   |               |   |               |   | 29      |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Total operating
      revenues                                                                                                        |  | 3,892  |   | 4,923             |   | 279                        |   | (12           | ) | 24            |   | 9,106   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Other income                                                                                                                          |  | 8      |   |                   |   |                            |   |               |   |               |   | 8       |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Depreciation/impairment
      property, plant and                                                                                     |  | (111   | ) | (134              | ) | (1                         | ) |               |   | (2            | ) | (248    | )
|equipment                                                                                                                             |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Amortisation/impairment
      other intangibles                                                                                       |  | (19    | ) | (29               | ) | (6                         | ) |               |   | (1            | ) | (55     | )
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Total operating income                                                                                                                |  | 806    |   | 375               |   | 6                          |   |               |   | (71           | ) | 1,116   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Net financial income/(expense)                                                                                                        |  |        |   |                   |   |                            |   |               |   |               |   | (18     | )
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Results from investments
      in associates                                                                                          |  |        |   |                   |   |                            |   |               |   |               |   | (2      | )
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Income tax                                                                                                                            |  |        |   |                   |   |                            |   |               |   |               |   | (375    | )
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Profit/(loss) from
      discontinued operations                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   | 31      |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Profit/(loss) attributable
      to the shareholders                                                                                  |  |        |   |                   |   |                            |   |               |   |               |   | 752     |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Capital expenditure
      on property, plant and                                                                                      |  | 75     |   | 143               |   | 1                          |   |               |   | 6             |   | 225     |  
|equipment                                                                                                                             |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Number of employees
      2                                                                                                           |  | 81,794 |   | 46,151            |   | 2,317                      |   |               |   |               |   | 130,262 |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Balance sheet information
      3                                                                                                     |  | Mail   |   | Express           |   | Logistics                  |   | Inter-company |   | Non-allocated |   | Total   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Goodwill paid in the
      year                                                                                                       |  | 12     |   | 2                 |   | 155                        |   |               |   |               |   | 169     |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Intangible assets                                                                                                                     |  | 237    |   | 1,281             |   | 1,121                      |   |               |   | 4             |   | 2,643   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Capital expenditure
      on property, plant and                                                                                      |  | 75     |   | 140               |   | 69                         |   |               |   | 6             |   | 290     |  
|equipment                                                                                                                             |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Property, plant and
      equipment                                                                                                   |  | 744    |   | 812               |   | 357                        |   |               |   | 11            |   | 1,924   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Investments in associates                                                                                                             |  | 5      |   | 2                 |   | 43                         |   |               |   | 34            |   | 84      |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Accounts receivable
      (incuding income tax receivable)                                                                            |  | 347    |   | 764               |   | 789                        |   |               |   | 189           |   | 2,089   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Total assets 4                                                                                                                        |  | 2,189  |   | 3,230             |   | 2,810                      |   |               |   |               |   | 8,229   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Total liabilities 5                                                                                                                   |  | 1,297  |   | 947               |   | 1,362                      |   |               |   | 1,279         |   | 4,885   |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|Number of employees
      2                                                                                                           |  | 81,794 |   | 44,933            |   | 40,581                     |   |               |   |               |   | 167,308 |  
|                                                                                                                                      |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|(in € millions,
      except employees)                                                                                               |  |        |   |                   |   |                            |   |               |   |               |   |         |  
|1  Figures
      have been adjusted to reflect the transfer of innight services from our
      logistics business to express in 2005.
|2  The
      numbers have been adjusted for comparative purposes.                                                                    
|3  In
      accordance with IFRS 5 balance sheet information as at 31 December 2004
      has not been adjusted.                     
|4  Identifiable
      assets also used for the segments have been allocated on the basis of estimated
      usages.                  
|5  Includes
      all liabilities (non-current, current).                                                                            



---

|166 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

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  to Contents





|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

O 34  DIFFERENCES
  BETWEEN IFRS AND US GAAP
  (No corresponding financial statement number)  Profit for the period
    and shareholders equity reconciliation statements
    Our consolidated financial statements are prepared in accordance with IFRS,
    which differ in certain respects from generally accepted accounting principles
    in the United States (US GAAP). 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:


|Profit attributable
      to the shareholders                                                         | Year
        ended at 31 December |      
|----------------------------------------------------------------------------------------------------- | --------------------------------- | -----
|                                                                                                      |                                   | 2005 
|                                                                                                      |                                   |      
|Profit attributable
      to the shareholders under IFRS                                              |                                   | 659  
|                                                                                                      |                                   |      
|Adjustments for:                                                                                      |                                   |      
|                                                                                                      |                                   |      
|Employee benefits                                                                                     |                                   | (16  
|                                                                                                      |                                   |      
|Employment schemes:
      cancellation of contract                                                    |                                   |      
|                                                                                                      |                                   |      
|Employment schemes
      and group reorganisation                                                     |                                   |      
|                                                                                                      |                                   |      
|Real estate sale                                                                                      |                                   |      
|                                                                                                      |                                   |      
|Depreciation and amortisation
      related to our discontinued logistics business                    |                                   | (8   
|                                                                                                      |                                   |      
|Other                                                                                                 |                                   | (11  
|                                                                                                      |                                   |      
|Tax effect of adjustments                                                                             |                                   | 8    
|                                                                                                      |                                   |      
|Profit attributable
      to the shareholders under US GAAP                                           |                                   | 632  
|                                                                                                      |                                   |      
|of
      which related to discontinued operations                                                     |                                   | (152 
|                                                                                                      |                                   |      
|of
      which related to continuing operations                                                       |                                   | 784  
|                                                                                                      |                                   |      
|Earnings per ordinary
      share/ADS under US GAAP 1 (in € cents)                                    |                                   | 139.1
|                                                                                                      |                                   |      
|Earnings per diluted
      ordinary share/ADS under US GAAP 2 (in € cents)                            |                                   | 138.5
|                                                                                                      |                                   |      
|(in € millions,
      except per share figures)                                                       |                                   |      
|1 In 2005 based on
      an average of 454,367,662 of ordinary shares/ADS (2004: 469,955,054)         |                                   |      
|2 In 2005 based on
      an average of 456,360,619 of diluted ordinary shares/ADS (2004: 470,547,635) |                                   |      

|Equity for the equity
      holders of the parent                                  |  | At
        31 December |  
|---------------------------------------------------------------------------------- |  | ---------------------- | -
|                                                                                   |  | 2005                   |  
|                                                                                   |  |                        |  
|Total equity                                                                       |  | 3,279                  |  
|                                                                                   |  |                        |  
|Minority interest                                                                  |  | (17                    | )
|                                                                                   |  |                        |  
|Equity for the equity
      holders of the parent under IFRS                       |  | 3,262                  |  
|                                                                                   |  |                        |  
|Adjustments for:                                                                   |  |                        |  
|                                                                                   |  |                        |  
|Employee benefits                                                                  |  | 18                     |  
|                                                                                   |  |                        |  
|Other long lived intangible
      assets                                           |  | 43                     |  
|                                                                                   |  |                        |  
|Other intangible assets
      amortisation                                         |  | (10                    | )
|                                                                                   |  |                        |  
|Repurchase of shares                                                               |  |                        |  
|                                                                                   |  |                        |  
|Minimum pension liability                                                          |  | (587                   | )
|                                                                                   |  |                        |  
|Depreciation and amortisation
      related to our discontinued logistics business |  | (8                     | )
|                                                                                   |  |                        |  
|Other                                                                              |  | (6                     | )
|                                                                                   |  |                        |  
|Deferred taxes on adjustments                                                      |  | 45                     |  
|                                                                                   |  |                        |  
|Equity for the equity
      holders of the parent under US GAAP                    |  | 2,757                  |  
|                                                                                   |  |                        |  
|(in € millions)                                                                    |  |                        |  

---

|2005
        Annual Report and Form 20-F |  | 167
|---------------------------------------- |  | ---

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  to Contents



|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

---

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 €10 million under US GAAP than under IFRS. 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. Employment schemes
    In the past, we recognised a liability for future wage guarantees, which did
    not qualify as a liability under US GAAP. This difference resulted in a 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
    statement 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 unwounded 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 statement of income in 2004 of 20 million caused
    by the fact that for certain real estate transactions in prior years, the
    legal ownership has not been 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 2005. Discontinued operations
As a result of our December 2005 announcement to focus on our core competency
of providing delivery services, we have presented assets and liabilities
of our discontinued logistics business as long lived assets to be disposed of
by sale and have 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.
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 the
    following criteria: •
      the asset or disposal
        group must be available for immediate sale in its present condition,•
      the sale must
        be highly probable, which requires appropriate level of management be
        committed to a plan to sell the assets or disposal
        group,•
      an active programme
        to locate a buyer and complete the plan must have been initiated,•
      the asset or disposal
        group must be actively marketed for sale at a price that is reasonable
        in relation to its current fair value,•
      the sale should
        be expected to qualify for recognition as a completed sale within one
        year from the date of classification and actions required to complete the plan should indicate
        that it is unlikely that significant changes to the plan will be made
        or that the plan will be withdrawn. We have met all the criteria
as required under IFRS 5. Our Board of Management is committed to a plan to sell
the assets and as defined in the Dutch Civil Code, it can legally represent the
company even in the event the general meeting of shareholders may not grant approval
to certain resolutions. Furthermore, the Dutch Civil Code states that when a Board
of Management commits a company in legally valid matters, the




---

|168 |  | 2005 Annual Report
      and Form 20-F
|--- |  | --------------------------------------

---



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  to Contents





|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

|Balance sheets US
      GAAP       | At
        31 December | 
|---------------------------------- | ---------------------- | 
|                                   | 2005                   | 
|                                   |                        | 
|Non-current assets                 | 5,064                  | 
|                                   |                        | 
|Current assets                     | 3,334                  | 
|                                   |                        | 
|Assets held for sale               | 12                     | 
|                                   |                        | 
|Total assets                       | 8,410                  | 
|                                   |                        | 
|                                   |                        | 
|                                   |                        | 
|Equity                             | 2,757                  | 
|                                   |                        | 
|Minority interest                  | 17                     | 
|                                   |                        | 
|Non-current liabilities            | 2,396                  | 
|                                   |                        | 
|Current liabilities                | 3,240                  | 
|                                   |                        | 
|Total equity and
      liabilities | 8,410                  | 
|                                   |                        | 
|(in € millions)                    |                        | 

|Statements of income
      US GAAP                     | Year
        ended 31 December |  
|------------------------------------------------------ | ------------------------------ | -
|                                                       | 2005                           |  
|                                                       |                                |  
|Total revenues                                         | 13,341                         |  
|                                                       |                                |  
|Total operating expenses                               | (12,072)                       |  
|                                                       |                                |  
|Operating income                                       | 1,269                          |  
|                                                       |                                |  
|Net financial (expense)
      income                   | (73                            | )
|                                                       |                                |  
|Results from investments
      in associates           | (2                             | )
|                                                       |                                |  
|Profit before income
      taxes                       | 1,194                          |  
|                                                       |                                |  
|Income taxes                                           | (408)                          |  
|                                                       |                                |  
|Profit for the period
      from continuing operations | 786                            |  
|                                                       |                                |  
|Profit/(loss) from
      discontinued operations       | (152                           | )
|                                                       |                                |  
|Profit for the period                                  | 634                            |  
|                                                       |                                |  
|Attributable to:                                       |                                |  
|                                                       |                                |  
|Minority interest                                      | 2                              |  
|                                                       |                                |  
|Shareholders                                           | 632                            |  
|                                                       |                                |  
|(in € millions)                                        |                                |  

company is bound towards
    a third party. The logistics business is available for immediate sale in its
    present condition and we believe the sale of the business is highly probable. The position of the SEC
    is that in the event shareholder approval is required, management is not considered
    having authority.Accordingly,
    under US GAAP the criteria management having the authority to approve
    the action, commits to a plan to sell the asset is not met. The French
    logistics business meets all criteria and has been presented as discontinued
    operations and the remainder of the logistics business has presented as part
    of continuing operations. Depreciation and amortisation
    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 8
    million and is included as a reconciling item between IFRS and US GAAP. Condensed consolidated
    balance sheets and condensed consolidated statements of income as at and for
    the years ended 31 December 2005 and 31 December 2004 are




presented below. These
    statements present consolidated financial data in accordance with US GAAP
    and include our discontinued logistics business, other than the French activities
    sold, as business from continuing operations. Other long lived intangible
    assets and business combinations and impairment of goodwill
    As 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. 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.


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        Annual Report and Form 20-F |  | 169
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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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 €28 million
    and the accumulated




amortisation was €10
    million. As at 31 December 2005, we had no separately identified intangible
    assets with indefinite useful lives. The changes in the carrying
    amount of goodwill for the year ended 31 December 2005, are as follows:


|                                     |  | Mail |   | Express |  | Freight
        management |   | Total |  
|------------------------------------ |  | ---- | - | ------- |  | -------------------------- | - | ----- | -
|                                     |  |      |   |         |  |                            |   |       |  
|Balance as at 1
      January 2005   |  | 233  |   | 1,278   |  | 150                        |   | 1,661 |  
|                                     |  |      |   |         |  |                            |   |       |  
|Additions                            |  | 20   |   | 5       |  | 1                          |   | 26    |  
|                                     |  |      |   |         |  |                            |   |       |  
|Disposals                            |  | (2   | ) |         |  |                            |   | (2    | )
|                                     |  |      |   |         |  |                            |   |       |  
|Internal transfers/reclassifications |  |      |   | 60      |  |                            |   | 60    |  
|                                     |  |      |   |         |  |                            |   |       |  
|Exchange rate differences            |  | 15   |   | 2       |  | (5                         | ) | 12    |  
|                                     |  |      |   |         |  |                            |   |       |  
|Balance as of 31
      December 2005 |  | 266  |   | 1,345   |  | 146                        |   | 1,757 |  
|                                     |  |      |   |         |  |                            |   |       |  
|(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 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,
    have been accounted for in the balance sheet as a debit against equity. Related
    transactioncosts
    ( €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. Mimumum pension liabilityUnder US GAAP we are
    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. Under IFRS, such a minimum
    pension liability is not required. 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. Sharebased payments
    Statement of Financial Accounting Standards no. 123, Accounting for Stock-based
    Compensation (SFAS 123), encourages, but does 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. 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:


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      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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Year
          ended at 31 December2004Profit attributable
        to the shareholdersAs reported
      
      752As adjusted
      
      744Earnings per ordinary
        share and per ADSAs reported (in €
        cents)
      
      158.9As adjusted (in €
        cents)
      
      157.2Earnings per diluted
        ordinary share and per ADSAs reported (in €
        cents)
      
      158.7As adjusted (in €
        cents)
      
      157.0(in € millions,
        except per share figures)  Year
          ended at 31 December2004Risk free
        interest rate (%)
      3.07Dividend (in €
        cents per share)
      
      57.0Volatility (%)
      
      21.7Life of
        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.
    As 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. Effective 1 January 2005,
    our share based payments have been measured using the Monte Carlo fair value
    measurement method.




Other differencesSALE 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 financings.
  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.
  Difference 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.
  LONG TERM CONTRACT INCENTIVES
    Under 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 totalling 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 the
    current year to reflect the reversal of the related annual charge to the income
    statement recorded under IFRS.


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        Annual Report and Form 20-F |  | 171
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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FINANCIAL INSTRUMENTS
    Effective 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 2005 we had no significant differences between
    IFRS and US GAAP, in accounting for our derivative instruments. GUARANTEES
    We have provided guarantees in 2005, none of which are within the scope of
    FASB Interpretation No. 45, Guarantors Accounting and Disclosure
    Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
    of Others. These guarantees are outside the scope of FIN 45 because they
    are guarantees of our own performance. OTHER
  Under 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 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. 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
    were not permitted as we were not legally obligated to make these payments
    at year end 2004. However, a provision under US GAAP was permitted in 2005
    and accordingly there is no longer a difference in shareholders equity
    related to this as at 31 December 2005. 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. 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 in the
    foreseeable future. Accordingly, we have established valuation allowances
    of €140 million (2004: 123) and recorded as at 31 December 2005 net




deferred tax assets of
    €71 million (2004: 79). 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 rollforward of the equity, comprehensive income and accumulated
  other comprehensive income is included in the following tables:







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      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

---

|                                                                                    |  |                      |  
|----------------------------------------------------------------------------------- |  | -------------------- | -
|                                                                                    |  | Total
        equity |  
|                                                                                    |  |                      |  
|Equity for the equity
      holders of the parent under US GAAP at 31 December 2003 |  | 3,146                |  
|                                                                                    |  |                      |  
|Profit attributable
      to shareholders over 2004 under US GAAP                   |  | 714                  |  
|                                                                                    |  |                      |  
|Final dividend 2003
      and interim dividend 2004                                 |  | (237                 | )
|                                                                                    |  |                      |  
|Translation adjustment
      IFRS                                                   |  | (29                  | )
|                                                                                    |  |                      |  
|Translation adjustment
      on US GAAP reconciling items                           |  | (113                 | )
|                                                                                    |  |                      |  
|Stock options exercised                                                             |  | 3                    |  
|                                                                                    |  |                      |  
|Repurchase 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                                                                               |  | 1                    |  
|                                                                                    |  |                      |  
|Equity for the equity
      holders of the parent under US GAAP at 31 December 2004 |  | 2,622                |  
|                                                                                    |  |                      |  
|Profit attributable
      to shareholders over 2005 under US GAAP                   |  | 632                  |  
|                                                                                    |  |                      |  
|Final dividend 2004
      and interim dividend 2005                                 |  | (268                 | )
|                                                                                    |  |                      |  
|Translation adjustment
      IFRS                                                   |  | 8                    |  
|                                                                                    |  |                      |  
|Translation adjustment
      on US GAAP reconciling items                           |  | 86                   |  
|                                                                                    |  |                      |  
|Stock options exercised                                                             |  | 41                   |  
|                                                                                    |  |                      |  
|Additional minimum
      liability for defined benefit plans                        |  | (133                 | )
|                                                                                    |  |                      |  
|Repurchase of shares
      2005 plan                                                |  | (231                 | )
|                                                                                    |  |                      |  
|Equity for the equity
      holders of the parent under US GAAP at 31 December 2005 |  | 2,757                |  
|                                                                                    |  |                      |  
|(in € millions)                                                                     |  |                      |  

|Comprehensive income                                            | Year
        ended at 31 December |     
|--------------------------------------------------------------- | --------------------------------- | ----
|                                                                |                                   |     
|                                                                |                                   | 2005
|                                                                |                                   |     
|Profit attributable
      to the shareholders under US GAAP     |                                   | 632 
|                                                                |                                   |     
|Unrealised forex gains/(losses)
      IFRS                      |                                   | 8   
|                                                                |                                   |     
|Unrealised forex gains/(losses)
      US GAAP reconciling items |                                   | 86  
|                                                                |                                   |     
|Minimum liability for
      defined benefit plans               |                                   | (133
|                                                                |                                   |     
|Gains/(losses) on foreign
      currency hedges                 |                                   | 0   
|                                                                |                                   |     
|Other                                                           |                                   | 0   
|                                                                |                                   |     
|Comprehensive income
      under US GAAP                        |                                   | 593 
|                                                                |                                   |     
|(in € millions)                                                 |                                   |     

|Accumulated other
      comprehensive income, net of related income taxes (under US GAAP) | Year
        ended at 31 December |     
|----------------------------------------------------------------------------------------- | --------------------------------- | ----
|                                                                                          |                                   | 2005
|                                                                                          |                                   |     
|Opening accumulated
      comprehensive income                                            |                                   | (783
|                                                                                          |                                   |     
|Unrealised forex gains/(losses)
      IFRS                                                |                                   | 8   
|                                                                                          |                                   |     
|Unrealised forex gains/(losses)
      US GAAP reconciling items                           |                                   | 86  
|                                                                                          |                                   |     
|Additional minimum
      liability for defined benefit plans                              |                                   | (133
|                                                                                          |                                   |     
|Gains/(losses) on foreign
      currency hedges                                           |                                   | 0   
|                                                                                          |                                   |     
|Other                                                                                     |                                   | 0   
|                                                                                          |                                   |     
|Total accumulated
      other comprehensive income, net of taxes (US GAAP)                |                                   | (822
|                                                                                          |                                   |     
|(in € millions)                                                                           |                                   |     

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        Annual Report and Form 20-F |  | 173
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|Chapter
        12 | Financial
        statements
|------------------ | ----------------------------

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The total accumulated
    other comprehensive income, net of taxes, of €822 million mainly includes
    a minimum pension liability of €587 million, and the rest consist of
    unrealised gains and losses on foreign currency translations. Recent
    US GAAP accounting pronouncementsThe Financial Accounting Standards Board in the United States 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 December 2004, the
    FASB issued a revised version of SFAS 123, Sharebased 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 statement supersedes APB Opinion No. 25, Accounting for
    Stock issued to Employees. The provisions of this statement were effective
    1 January 2006. As permitted by FASB Statement No. 148, Accounting for
    Stock-Based Compensation  Transition and Disclosure, we have elected,
    effective I January 2005, to measure our share based payments using a fair
    value method under SFAS 123 using the transition provisions of SFAS 148. Accordingly,
    we do not expect the adoption of SFAS 123(R) to have a material impact on
    our financial statements. Emerging Issues Task
    Force (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 are required to adopt this pronouncement effective 1 January 2006 and do
    not expect the adoption the EITF 05-6 to have a material impact on our financial
    statements.




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|174 |  | 2005 Annual Report
      and Form 20-F
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|Financial
        statements | Chapter
        12
|---------------------------- | ------------------

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TNT
  N.V. CORPORATE BALANCE SHEETS
Before proposed appropriation
  of profit
At
        31 DecemberTNT N.V.
    
    2005
    %
        variance
    
    2004ASSETSO 35
    Non-current
        assetsInvestments
        in group companies
    
    4,811
    
    
    
    4,172Investments
        in associates
    
    43
    
    
    
    32Deferred
        tax assets
    
    5Prepayments
        and accrued income
    
    
    
    
    
    3Total
        non-current assets
    
    4,859
    
    15.5
    
    4,207Current
        assetsAccounts
        receivable from group companies
    
    
    
    
    
    228Other
        accounts receivable
    
    16
    
    
    
    18Prepayments
        and accrued income
    
    
    
    
    
    1Cash
        and cash equivalents
    
    8
    
    
    
    5Total
        current assets
    
    24
    
    (90.5
    )
    252Total
        assets
    
    4,883
    
    9.5
    
    4,459LIABILITIES
        AND SHAREHOLDERS' EQUITYO 36
    Shareholders
        equityO 37
    Issued
        share capital
    
    230
    
    
    
    230O 38
    Additional
        paid in capital
    
    1,421
    
    
    
    1,421O 39
    Cumulative
        translation adjustment
    
    (16
    )
    
    
    (35
    )O 40
    Fair
        value and other reserves
    
    1,068
    
    
    
    1,052O 41
    Unappropriated
        profit
    
    559
    
    
    
    657Total
        shareholders equity
    
    3,262
    
    (1.9
    )
    3,325Non-current
        liabilitiesO 13
    Euro
        Bonds
    
    1,009
    
    
    
    1,000Other
        long term liabilities
    
    
    
    
    
    129Total
        non-current liabilities
    
    1,009
    
    (10.6
    )
    1,129Current
        liabilitiesAccounts
        payable to group companies
    
    418Other
        current liabilities
    
    182Accrued
        liabilities
    
    12
    
    
    
    5Total
        current liabilities
    
    612
    
    12,140.0
    
    5Total
        liabilities and shareholders' equity
    
    4,883
    
    9.5
    
    4,459(in
        € millions, except percentages)   The
        figures#Oin 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.
TNT
  N.V. CORPORATE STATEMENTS OF INCOME
Year
        ended at 31 December2005
    2004Results
      from continuing operations
    
    851
    
    748Results
      from discontinued operations
    
    (111
    )
    31Results from investments
      in group companies after taxes
    
    740
    
    779Other income and expenses
      after taxes
    
    (81
    )
    (27
    )Profit attributable
      to the shareholders
    
    659
    
    752(in € millions)2005
        Annual Report and Form 20-F
    
    175

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  to Contents

Chapter
        12
    Financial
        statementsNOTES
    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 2005 have been prepared in accordance
    with part 9, 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.
  Until 2004, these statements
    were prepared under Dutch GAAP. 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. For details we refer to
    our note on Transition to International Financial Reporting Standards as adopted
    by the European Union in our consolidated financial statements. 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 as disclosed in our note to the
    consolidated financial statements, Adoption of IAS 32 and IAS 39.
  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.

O 35 NON-CURRENT ASSETS: 4,859 MILLION (2004: 4,207)
Investments
        in group companies
    
    Investments
        in associates
    
    Other
        loans receivable
    
    Deferred
        tax assets
    
    Prepayments
        & accrued income
    
    TotalBalance at 31 December
      2003
    
    3,405
    
    25
    
    
    
    
    
    7
    
    3,437First time adoption
      IFRS
    
    12
    
    
    
    
    
    
    
    
    
    12Balance at 1 January
      2004
    
    3,417
    
    25
    
    
    
    
    
    7
    
    3,449Changes in 2004Results
    
    779
    
    (2
    )
    
    
    
    
    
    
    777Acquisitions/additions
    
    
    
    10
    
    
    
    
    
    
    
    10Disposals/decreases
    
    
    
    
    
    
    
    
    
    (4)
    
    (4
    )Withdrawals/repaymentsExchange rate differences
    
    (32
    )
    
    
    
    
    
    
    
    
    (32
    )Other changes
    
    8
    
    (1
    )
    
    
    
    
    
    
    7Total changes
    
    755
    
    7
    
    
    
    
    
    (4)
    
    758Balance at 31 December
      2004
    
    4,172
    
    32
    
    
    
    
    
    3
    
    4,207Adoption IAS 32/39
    
    (9
    )
    
    
    
    
    
    
    (3
    )
    (12
    )Balance at 1 January
      2005
    
    4,163
    
    32
    
    
    
    
    
    
    
    4,195Changes in 2005Results
    
    740
    
    (2
    )
    
    
    
    
    
    
    738Acquisitions/additions
    
    
    
    13
    
    
    
    5
    
    
    
    18Disposals/decreases
    
    (111
    )
    
    
    
    
    
    
    
    
    (111
    )Withdrawals/repaymentsExchange rate differences
    
    19
    
    
    
    
    
    
    
    
    
    19Other changesTotal changes
    
    648
    
    11
    
    
    
    5
    
    
    
    664Balance at 31 December
      2005
    
    4,811
    
    43
    
    
    
    5
    
    
    
    4,859(in € millions)Investments in group companies
    includes our investments in our discontinued logistics business.

176
    
    2005 Annual Report
      and Form 20-F

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Financial
        statements
    Chapter
        12O 36 SHAREHOLDERS EQUITY: 3,262 MILLION (2004: 3,325)
Issued
        share capital
    
    Additional
        paid in capital
    
    Cumulative
        translation adjustment
    
    Fair
        value and other reserves
    
    Unappropriated
        profits
    
    Total
        shareholders' equityBalance at 1 January
      2004
    
    230
    
    1,421
    
    
    
    1,115
    
    215
    
    2,981Profit for the period
    
    
    
    
    
    
    
    
    
    752
    
    752Currency translation
      adjustment
    
    
    
    
    
    (35
    )
    6
    
    
    
    (29
    )Other
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Total recognised
      income for the year
    
    
    
    
    
    (35
    )
    3
    
    752
    
    720Final dividend previous
      year
    
    
    
    
    
    
    
    
    
    (142
    )
    (142
    )Appropriation of net
      income
    
    
    
    
    
    
    
    73
    
    (73
    )Interim dividend current
      year
    
    
    
    
    
    
    
    
    
    (95
    )
    (95
    )Repurchase of shares
    
    
    
    
    
    
    
    (151
    )
    
    
    (151
    )Share based compensation
    
    
    
    
    
    
    
    6
    
    
    
    6Other
    
    
    
    
    
    
    
    6
    
    
    
    6Total direct changes
      in equity
    
    
    
    
    
    
    
    (66
    )
    (310
    )
    (376
    )Balance at 31 December
      2004
    
    230
    
    1,421
    
    (35
    )
    1,052
    
    657
    
    3,325Effect on adoption
      of IAS 32/39
    
    
    
    
    
    
    
    (268
    )
    
    
    (268
    )Balance at 1 January
      2005
    
    230
    
    1,421
    
    (35
    )
    784
    
    657
    
    3,057Profit for the period
    
    
    
    
    
    
    
    
    
    659
    
    659Gains/(losses) on cash
      flow hedges, net ot tax
    
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Currrency translation
      adjustment
    
    
    
    
    
    19
    
    
    
    
    
    19Total recognised
      income for the year
    
    
    
    
    
    19
    
    (12
    )
    659
    
    666Final dividend previous
      year
    
    
    
    
    
    
    
    
    
    (168
    )
    (168
    )Appropriation of net
      income
    
    
    
    
    
    
    
    489
    
    (489
    )Interim dividend current
      year
    
    
    
    
    
    
    
    
    
    (100
    )
    (100
    )Repurchase of shares
    
    
    
    
    
    
    
    (231
    )
    
    
    (231
    )Share based compensation
    
    
    
    
    
    
    
    10
    
    
    
    10Other
    
    
    
    
    
    
    
    28
    
    
    
    28Total direct changes
      in equity
    
    
    
    
    
    
    
    296
    
    (757
    )
    (461
    )Balance at 31 December
      2005
    
    230
    
    1,421
    
    (16
    )
    1,068
    
    559
    
    3,262(in € millions)
O 37 ISSUED SHARE CAPITAL: 230 MILLION (2004: 230)
  Issued share capital
    amounted to €230 million at 31 December 2005 (2004: 230). The number
    of authorised, issued and outstanding shares by class of share at 31 December
    2005 and 31 December 2004 is as follows:



Ordinary
    
    Preference
        B
    
    Special
        shareAuthorised
    
    1,200,000,000
    
    1,199,999,999
    
    1Issued and outstanding
    
    479,999,999
    
    0
    
    1of
      which held by the company to cover share plans
    
    3,791,438
    
    0
    
    0of
      which held by the company for cancellation
    
    29,460,477
    
    0
    
    0
2005
        Annual Report and Form 20-F
    
    177

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  to Contents

Chapter
        12
    Financial
        statementsOur ordinary and preference
    shares have a nominal value of €0.48. We 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. During the year we purchased ordinary shares as part
    of our management and personnel share option plan. Furthermore, we purchased
    13.1 million ordinary shares in January 2005 thereby completing our repurchase
    of 20.7 million ordinary shares sold by the State of the Netherlands. On 7
    April 2005, the annual general meeting of shareholders resolved to cancel
    these shares. The cancellation of 259,523 of these shares became effective
    on 16 June 2005. The cancellation of the remaining 20,440,477 shares shall
    become effective as per the date on which a proposed amendment of our articles
    of association to decrease our authorised capital, to be submitted to an extraordinary
    general meeting of shareholders to be held on 27 February 2006, shall become
    effective. Upon effectuation of this amendment of the articles of association,
    our authorised capital shall amount to 864 million nominal value, divided
    into 900,000,000 ordinary shares, 1 special share and 899,999,999 preference
    shares B. Finally, we commenced a share buy back of 1 billion on 6 December
    2005. We therefore owned and held for cancellation 29,460,477 ordinary shares
    at 31 December 2005 (2004: 4,979,942) and held 3,791,438 to cover share plans.
  The State of the Netherlands
    is the holder of the special share. At 31 December 2005, the State of the
    Netherlands held approximately 10% of the ordinary shares. We may not vote
    on shares we hold in our own capital.
  The 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.
  O 38 ADDITIONAL PAID IN CAPITAL: 1,421 MILLION (2004: 1,421)
  Additional paid in capital
    is exempt for Dutch tax purposes.
  O 39 CUMULATIVE TRANSLATION ADJUSTMENT: (16) MILLION (2004: -35)
  Currency translation
    gains and losses on converting foreign subsidiaries of TNT N.V. into euros
    are charged or credited to the cumulative translation adjustment, net of taxation.
    As permitted by a change in the Dutch law, we have elected to set the previously
    accumulated cumulative translation adjustment at zero as at 1 January 2004.
  O 40 FAIR VALUE AND OTHER RESERVES: 1,068 MILLION (2004: 1,052)
  In connection with our
    announcement on 29 September 2004 we repurchased 20.7 million of the shares
    sold by the State of the Netherlands. The first tranche of 7,6 million shares
    was transferred to us on 4 October 2004. The first tranche was repurchased
    for €151 million (including transaction costs) and is deducted from other
    reserves.The second tranche was transferred to us on 5 January 2005 for an
    amount of €259 million and is reflected in the table below.
  Losses on cash flow hedges
    resulting from the fair value movement on the €500 million of forward
    starting swaps, net of taxes amounted to €12 million (2004: 3).
  The
    other movement of €28 million includes the share grants of 2004 and exercise
    rights of options plans of prior years.

Total
        number of 
        shares purchased1
    
    Average
        price 
        paid per share 
        (in €)
    
    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)Repurchased
      in January 2005
    
    13,100,000
    
    19.74
    
    13,100,000
    
    0Repurchased
      in December 2005
    
    9,020,000
    
    25.60
    
    9,020,000
    
    769Total
    
    22,120,000
    
    22.13
    
    22,120,000
    
    7691  Between
      1 February and 30 November 2005 we purchased no shares
178
    
    2005 Annual Report
      and Form 20-F

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Financial
        statements
    Chapter
        12O 41 UNAPPROPRIATED PROFIT: 559 MILLION (2004: 657)
  The profit for 2005 has
    been calculated as the net income for 2005 of TNT N.V. and all its subsidiaries.
    The 2005 unappropriated component is €559 million (2004: 657), containing
    the net profit of €659 million (2004: 752) and the paid interim dividend
    2005 of €100 million (2004: 95). Subject to the approval of the general
    meeting of shareholders, the Board of Management proposes to add €396
    million (2004: 489) to other reserves and to pay €172 million (2004:168)
    as final dividend.
  O 42 WAGES AND SALARIES
    (No corresponding financial statement number)
  TNT N.V. does not have
    any employees. Hence no salary, social security or pension costs were incurred.
  O 43 COMMITMENTS NOT INCLUDED IN THE BALANCE SHEET
    (No corresponding financial statement number)
  Declaration of joint
    and several liability
    As at 31 December 2005 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
        TPG Post B.V.
      TNT
        Holdings B.V.
      TNT
        Logistics Holdings B.V.
      TNT
        Express Holdings B.V.
      TNT
        Headoffice B.V.Fiscal unity in the
    Netherlands
    TNT 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.
  Guarantees
    Parental 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 billion commercial paper
    programme, €250 million cash pooling credit facility and for various
    international swaps and derivatives association (ISDA) agreements.
  In addition, we have 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.

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.
  O 44 SUBSIDIARIES AND ASSOCIATED COMPANIES AT 31 DECEMBER 2005
    (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.
  O 45 SUBSEQUENT EVENTS
  Acquisition Trespertrans
    S.L.
    On 18 January 2006, we completed the acquisition of the 100% shares in Trespertrans
    S.L., which is the holding company of 100% shares in TG Plus Transcamergomez
    S.A.U., a domestic express company in Spain. The transaction was announced
    on 6 December 2005 and the acquisition price was approximately 48 million,
    goodwill is expected to be approximately 26 million, and intangible
    assets (customer list only) are expected to be approximately 5 million,
    with the intangible assets being amortised over the estimated useful life.
    These amounts are subject to our final purchase price allocations.
  Sale of remaining
    logistics activities in France
    On 27 January 2006, we announced an agreement for the sale of our Logistiques
    Nicolas activities to the French cargo transport operator Malherbe. On 10
    February 2006, we announced an agreement for the sale of the activities of
    Transports Pierre Mendy and Mendy Ltda to PierreMichel Mendy/Groupe
    Lapegue.
  These transactions, together
    with the transactions announced on 1 December 2005 and 2 January 2006, completes
    the sale of our logistics France business unit.
  Repurchase programmeUnder the repurchase programme we announced on 6 December 2005, we have
    purchased as at 22 February 2006, an additional 12,988,752 number of shares
    since 31 December 2005 for a total amount of €352 million. It is our
    intention to cancel the ordinary shares and request for such cancellation
    to be approved by our shareholders.
  Launch
    of domestic express service in IndiaOn 1 February 2006, we announced that we will make an investment of approximately
    €100 million into the Indian

2005
        Annual Report and Form 20-F
    
    179


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Chapter
        12
    Financial
        statementsmarket over the next five
    years, further reinforcing our commitment to the booming Indian economy. This
    launch makes us the first multinational brand in India to offer international
    and domestic services using an integrated air and road network.
  Delisting London and
    Franfurt stock exchanges
    On 20 February 2006, we announced our intention to delist from the London
    and Frankfurt stock exchanges in the first half of 2006, as the costs and
    requirements for these listings are not justified by the low trading volume
    in our shares at these stock exchanges.
  O 46 POSTAL 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 TPG 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 Postal Concession
  MANDATORY POSTAL SERVICES
    The 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 AND OTHER FINANCIAL
    OBLIGATIONS
    Our 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


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|Chapter
        12 | Financial
        statements
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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 wecan 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 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 PROVISION 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
    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 evaluated in 2002. On 18 November 2002, the Ministry of Economic Affairs
    decided that tariffs controlled by the current price cap system should be
    frozen




until the end of 2006.
    The Ministry of Economic Affairs indicated that in the event postal services
    became subject to value added tax between 1 January 2003 and 1 January 2007,
    a change of the frozen tariffs corresponding with the resulting tax burden
    would be allowed. On 19 June 2003, when the tariff freeze was discussed in
    parliament, the duration of the freeze was limited to 1 January 2005, awaiting
    the vision of the Minister of Economic Affairs on the future regulation of
    the postal sector. The Minister of Economic Affairs proposed in his postal
    vision sent to parliament on 1 April 2004 that the temporary tariff freeze
    would be extended until year end 2006. On 17 November 2003
    we lodged an appeal against the administrative decision to freeze the tariffs.
    Following the grant of the formal appeal, the temporary tariff freeze decision
    was declared void in June 2004 and we 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. The prices for mandatory postal services
    to business customers that are covered by the price control system will increase
    in 2006, but the increase will be kept below the rate of wage inflation for
    2004 and 2005. On 16 December 2004
    the Minister of Economic Affairs discussed his vision for the postal market
    with the members of parliament. During this meeting parliament gave its support
    to the vision, giving clarity to the following issues: 
      full
        liberalisation of the Dutch postal market in 2007 (conditional on full
        market liberalisation in the United Kingdom and Germany, i.e. the condition
        of a level playingfield).
        The vision foresees the possibility of an emergency




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        Annual Report and Form 20-F |  | 181
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|Chapter
        12 | Financial
        statements
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brake
      procedure that allows for the date of the introduction of liberalisation
      to be shifted to a later stage should delayed factual liberalisation of
      the German and UK postal markets call for this,
    the intention
      to maintain the price of a stamp for consumers at €0.39 in 2004, 2005
      and 2006, from 2007, rates for services provided under the universal service
      obligation will be regulated using a price cap system linked to inflation,
    non-discrimination
      is applicable to our mail services. Competitors and customers must be treated
      equally in terms of rates and conditions,
    there
      is a clearer distinction between general and sector specific competition
      monitoring. OPTA is charged with monitoring universal service and non discrimination
      requirements,
    a reduction,
      yet to be fully defined, in the scope of the mandatory postal services,
      and
    from 2007,
      the Minister of Economic Affairs will assess whether our obligation to deliver
      bulk mail letters up to 50 grammes will remain mandatory for an undefined
      transitional period, without any rights for us to offset this obligation.




The
  postal vision, as the officially adopted governmental policy, is the basis for
  the development of new postal legislation. Based on the postal vision, a new
  Dutch Postal Act was drafted in 2005. As part of the normal process of drafting
  an act, the Minister of Economic Affairs in December 2005 has sent this draft
  to the Counsel of State to advise on this. Further discussions in parliament
  will take place in 2006. We recognise that the
    postal vision provides clarity on the most important aspects of postal regulation
    and gives a long term framework for the development of the postal market in
    the Netherlands. In particular, 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 2007 respectively. In 2005, the Dutch government commissioned
    a study to investigate this issue. This study is expected to be repeated in
    2006 to see if any changes in the market situation have taken place since
    the first study. Amsterdam, 24 February
  2006


---



|Board
      of Management    |  | Supervisory
        Board     
|---------------------------- |  | ------------------------------
|M.P. Bakker
      (Chairman) |  | J.H.M.
      Hommen (Chairman)
|J.G. Haars                   |  | R.J.N.
      Abrahamsen       
|H.M. Koorstra                |  | J.M.T.
      Cochrane         
|D.G. Kulik                   |  | R. Dahan                      
|M.C. Lombard                 |  | V. Halberstadt                
|                             |  | W. Kok                        
|                             |  | S. Levy                       
|                             |  | G. Monnas                     
|                             |  | R.W.H.
      Stomberg         
|                             |  |                               
|                             |  | TNT
      N.V.                
|                             |  | Neptunusstraat
      41-63    
|                             |  | 2132 JA
      Hoofddorp       
|                             |  | P.O. Box
      13000          
|                             |  | 1100 KG
      Amsterdam       
|                             |  | The Netherlands               



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Back
    to Contents  Financial
          statements
      Chapter
          12  INTENTIONALLY LEFT
    BLANK  2005
          Annual Report and Form 20-F
      
      183    Back
    to Contents  Chapter
          12
      Financial
          statements  OTHER
      INFORMATION EXTRACT
      FROM THE ARTICLES OF ASSOCIATION ON APPROPRIATION OF PROFIT Under our articles
      of association, a dividend of 7% of €0.48 ( €0.032) will be paid
      on the special share (article 35, paragraph 1). The dividend specified in
      article 35, paragraph 1 will be paid on preference shares B. Preference
      shares B have not been issued. Subject to the approval of our Supervisory
      Board, our Board of Management will determine which part of 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). APPROPRIATION
      OF PROFIT Subject to the adoption
      of our financial statements, the proposed 2005 dividend has been set at
      €0.63 in cash per ordinary share of €0.48 par value. After adjusting
      for the interim dividend of €0.22 per ordinary share paid out in August
      2005, the final dividend will be €0.41 per ordinary share.
   Appropriation
          of profit
      2005Profit attributable
        to the shareholders
      659Appropriation in
        accordance with the articles of association:Dividend on special
          share (article 35, par. 1) €0.032
      0Reserves adopted
        by the Board of Management and approved by the Supervisory Board (article
        35, par.2)
      (387
      )Dividend on ordinary
        shares
      272Interim dividend
        paid
      100Final dividend
      172(in € millions)  SPECIAL
      CONTROL RIGHTS UNDER THE ARTICLES OF ASSOCIATION OF SPECIAL SHARE The State of the Netherlands
      holds a special share that gives it the right to approve decisions that
      lead to fundamental changes in our group structure, see for these decisions
      note 31. OTHER
      ARRANGEMENTS WITH THE STATE OF THE NETHERLANDS We have agreed with
      the State of the Netherlands that we may issue ordinary shares, subject
      to the approval of the State of the Netherlands, in its capacity as holder
      of the special share, and the Supervisory Board. The State of the Netherlands
      has agreed that it will withhold its approval only if: 
        the
          proposed share issuance is scheduled to take place, or our intention
          to make the issuance would be made public by us, within nine months
          prior to any offer of our ordinary shares by the State of the Netherlands,
          and
        the
          State of the Netherlands in its reasonable opinion expects that the
          proposed issuance would be detrimental to its interests in any later
          offerings of our ordinary shares by it.However, we may within such nine-month period make a public announcement
          of our intention to issue ordinary shares, if:
        ordinary
          shares would be issued exclusively or almost exclusively in exchange
          for the shares of one or more companies with which we or any of our
          group companies have concluded a co-operation, merger or acquisition
          agreement, or
  
        the
          announcement is made in relation to a private issuance (other than an
          issuance referred to above), provided that the State of the Netherlands
          in its reasonable opinion determines that the announcement would not
          be detrimental to its interests in any future offerings by it. The State of the Netherlands
      is otherwise required to give its approval within eight business days upon
      written request to that effect, if the financial conditions of the issuance
      reasonably can not be regarded by the State of the Netherlands as adversely
      affecting the interests of shareholders in general. In issuing shares,
      we have agreed to consider the long term financial interests of the State
      of the Netherlands as the holder of a substantial interest in us.
    184
      
      2005 Annual Report
        and Form 20-F




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|           
|-----------
|REGULATORY 
|           
|ENVIRONMENT
|           



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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 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. 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. 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 did not enter into the REIMS II agreement because
    we felt it did not contain a strong incentive/penalty system that would guarantee
    improvement of the quality of service. Instead, we concluded commercially
    oriented bilateral agreements with most of the European postal operators. Most of the 10 countries
    who 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 TPG Post B.V. and postal operators
    of the accession countries.




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 50 grammes per item of correspondence at a price of less than
    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 EU Postal Directive
    delays full liberalisation of the EU postal market until at least 2009, depending
    on the results of a study on the effects of liberalisation that is to be finalised
    by 31 December 2006. 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 TPG 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




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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 contains the following key elements: 
      full liberalisation
        of the Dutch postal market in 2007 (conditional on full market liberalisation
        in the United Kingdom and Germany, i.e. the condition of a level playing
        field). The vision foresees
        the possibility of an emergency brake procedure that allows
        for the date of the introduction of liberalisation to be shifted to a
        later stage should delayed factual liberalisation of the German and UK
        postal markets call for this,
      the intention to maintain
        the price of a stamp for consumers at €0.39 in 2004, 2005 and 2006,
        from 2007, rates for services provided under the universal service obligation
        will be regulated using a price cap system linked to inflation,
      non-discrimination
        is applicable to our mail services. Competitors and customers must be
        treated equally in terms of rates and conditions,
      there is a clearer
        distinction between general and sector specific competition monitoring.
        The OPTA is charged with monitoring universal service and non-discrimination
        requirements,
      a reduction, yet to
        be fully defined, in the scope of the mandatory postal services, and
      from 2007, the Minister
        of Economic Affairs will assess whether our obligation to deliver bulk
        mail letters up to 50 grammes will remain mandatory for an undefined transitional
        period, without any rights for us to offset this obligation. The postal vision, as
    the officially adopted governmental policy, is the basis for the development
    of new postal legislation. Based on the postal vision, a new Dutch Postal
    Act was drafted in 2005. As part of the normal process of drafting an act,
    the Minister of Economic Affairs in December 2005 has sent this draft to the
    Counsel of State to advise on this. Further discussions in parliament will
    take place in 2006. We recognise that the
    postal vision provides clarity on the most important aspects of postal regulation
    and gives a long-term framework for the development of the postal market in
    the Netherlands. In particular, 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 2007 respectively. In 2005, the Dutch government commissioned
    a study to investigate this issue. This study is expected to be repeated in
    2006 to see if any changes in the market situation have taken place since
    the first study.




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




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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 smallusers
    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:  The price cap system
    was evaluated in 2002. On 18 November 2002, the Ministry of Economic Affairs
    decided that tariffs controlled by the current price cap system should be
    frozen until the end of 2006. The Ministry of Economic Affairs indicated that
    in the event postal services became subject to value added tax between 1 January
    2003 and 1 January 2007, a change of the frozen tariffs corresponding with
    the resulting tax burden would be allowed. On 19 June 2003, when the tariff
    freeze was discussed in parliament, the duration of the freeze was limited
    to 1 January 2005, awaiting the vision of the Minister of Economic Affairs
    on the future regulation of the postal sector. The Minister of Economic Affairs
    proposed in his postal vision sent to parliament on 1 April 2004 that the
    temporary tariff freeze would be extended until year end 2006. On 17 November 2003 we
    lodged an appeal against the administrative decision to freeze the tariffs.
    Following the grant of the formal appeal, the temporary tariff freeze decision
    was




declared void in June
    2004 and we 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. The pricesfor
    mandatory postal services to business customers that are covered by the price
    control system will increase in 2006, but the increase will be kept below
    the rate of wage inflation for 2004 and 2005. Reserved postal services
    Under 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.




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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. COMPETITION LAWEuropean
    competition lawOur businesses
    are subject to competition rules in the jurisdictions in which they operate.
    The 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.
    Since 1 May 2004, 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 EFTA Surveillance 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 Dutch Competition Authority.




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|           
|-----------
|ADDITIONAL 
|           
|INFORMATION
|           





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|Additional
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SHARE
    CAPITAL
  Under our articles of
    association, our authorised share capital amounts to €1,152 million nominal
    value. Our authorised share capital consists of: •
      1,200,000,000 ordinary
        shares,•
      1 special share,
        and•
      1,199,999,999 preference
        shares B. We have called an extraordinary
    general meeting of shareholders for 27 February 2006 at which we will propose
    to amend our articles of association in order to decrease the authorised share
    capital. Upon effectuation of this amendment to the articles of association,
    our authorised share capital would amount to €864 million nominal value.
    Our authorised share capital would then consist of: •
      900,000,000 ordinary
        shares,•
      1 special share,
        and•
      899,999,999 preference
        shares B. Each of the above shares
    has a nominal value of €0.48. As at the date of this
    annual report 479,999,999 ordinary shares and one special share were issued.
    No preference shares B were issued. REPURCHASE OF SHARE/SHARE
    BUY BACK PROGRAMME




The State of the Netherlands
    is the holder of the special share. See for further information on the special
    share page 162. Our ordinary shares are
    issued in bearer or registered form, at the option of the shareholder. Ordinary
    shares in bearer form may be converted into registered form, and vice versa,
    at any time without charge. The special share and the preference shares B
    are registered shares. During the year we completed
    the repurchase of 20.7 million ordinary shares sold by the State of the Netherlands.
    On 7 April 2005, the annual general meeting of shareholders resolved to cancel
    these shares. The cancellation of 259,523 of these shares became effective
    on 16 June 2005. The cancellation of the remaining 20,440,477 shares shall
    become effective on the same date as the proposed decrease of our authorised
    share capital becomes effective. On 6 December 2005, we
    commenced a share buy back programme of €1 billion worth of shares. On 31 December 2005,
    480,000,000 shares were outstanding (one special share and 479,999,999 ordinary
    shares). On 31 December 2005, 3,791,438 of the outstanding ordinary shares
    were held by us to cover share plans, and 29,460,477 of the outstanding ordinary
    shares were held by us for cancellation.


|                                   | Total
        number of shares purchased1 |  | Average
        price paid per share
        (in €) |  | 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) | 
|---------------------------------- | ----------------------------------------- |  | --------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                   |                                           |  |                                                     |  |                                                                                      |  |                                                                                                                                                | 
|Repurchased in January
      2005  | 13,100,000                                |  | 19.74                                               |  | 13,100,000                                                                           |  | 0                                                                                                                                              | 
|                                   |                                           |  |                                                     |  |                                                                                      |  |                                                                                                                                                | 
|Repurchased in December
      2005 | 9,020,000                                 |  | 25.60                                               |  | 9,020,000                                                                            |  | 769                                                                                                                                            | 
|                                   |                                           |  |                                                     |  |                                                                                      |  |                                                                                                                                                | 
|Total                              | 22,120,000                                |  | 22.13                                               |  | 22,120,000                                                                           |  | 769                                                                                                                                            | 
|                                   |                                           |  |                                                     |  |                                                                                      |  |                                                                                                                                                | 

|  |                                                                             
|- | ----------------------------------------------------------------------------
|1 | Between 1 February
      2005 and 30 Novemebr 2005 we repurchased no shares.



On 29 September 2004,
    we announced that we would repurchase 20.7 million ordinary shares from the
    State of the Netherlands. Transfer of the repurchased shares took 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, both at a share price of €19.74. On 6 December 2005, we
    announced a programme to repurchase €1 billion worth of ordinary shares.
    In December 2005, we repurchased 9,020,000 shares under this programme at
    an average price of €25.60 per share.




The programme will end
    6 April 2006 unless prior to such date: •
      the aggregate value
        of shares acquired would exceed €1.0 billion,•
      10% of the outstanding
        ordinary shares have been repurchased, including any ordinary shares already
        held by the company, or•
      if a cash or exchange
        offer with respect to our shares is publicly launched through the publication
        of an offer document.




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The maximum consideration
    to be paid per ordinary share under this repurchase programme is the higher
    of the price of the last independent trade in our shares and the highest current
    independent bid price on the trading venues where the purchase is carried
    out. Furthermore, this price will not exceed the normal trade price plus 10%.
    The normal trade price is the average closing price during the five trading
    days prior to the day of purchase. Not more than 25% of the average daily
    volume of the ordinary shares will be repurchased in any one day on the regulated
    market on which the purchase is carried out. The average daily volume figure
    is based on the average daily volume traded in the 20 trading days preceding
    the date of purchase. In 2005, we did not repurchase
    any of our shares other than those shares repurchased pursuant to the above
    publicly announced programmes. MAJOR SHAREHOLDERS
    AND 
    RELATED PARTY TRANSACTIONS GENERALTo our knowledge, no one, except for the State of the Netherlands,
    owns 5% or more of our shares and there are no arrangements the operation
    of which might result in a change in our control. The State of the Netherlands
    sold part of its ordinary shares in 2005 and owns on 22 February 2006 46,073,810
    ordinary shares, representing approximately 10% of our outstanding ordinary
    shares. Furthermore, the State of the Netherlands owns 1 special share. There
    are no others holding special shares. The State of the Netherlands announced
    that it has agreed with ABN Amro-Rothschild, Citigroup and the purchasing
    parties in July 2005, to not sell any of its shares in TNT until July 2006
    (standstill agreement). For information as to
    the portion of each class of shares held in the United States and the number
    of record holders in the United States, see chapter 15. THE OWNERSHIP INTERESTS
    OF THE STATE OF THE 
    NETHERLANDSOverviewAn effectively operating postal system is of great importance
    to Dutch society for various reasons, including economic, strategic and national
    security reasons, and is therefore of general interest to the State of the
    Netherlands. For certain important postal services we are the exclusive holder
    of the Postal Concession granted by the State of the Netherlands (see chapter
    13). As a result, we are crucial to the maintenance ofan
    effectively operating postal system in the Netherlands. The State of the Netherlands
    holds approximately 10% of our ordinary shares.In addition to being a
    significant holder of ordinary shares, the State of the Netherlands has influence
    on




us and our affairs through
    corporate governance mechanisms, its ownership of a special share and a longer
    term equity interest. Special shareThe State of the Netherlands holds a special share. For more
    information on the special share see note 31 of the consolidated financial
    statements on page 162. Pending changes to
    relation with the State of the 
    NetherlandsThe European Commission
    sent the State of the Netherlands a formal request to give up the special
    share the State of the Netherlands holds in us. The State of the Netherlands
    has reacted that it has no intention of giving up its special share in our
    company. The State of the Netherlands is, however, considering the possibility
    of transferring the Postal Concession from TNT N.V. to Royal TPG Post B.V.,
    our subsidiary for postal services, and limiting the applicability of the
    rights attached to the special share to apply only to that subsidiary. On
    17 December 2003 the European Commission has brought this matter before the
    European Court of Justice to compel the State of the Netherlands to give up
    the special rights conferred by the special share. ARTICLES OF ASSOCIATION Following is a brief
    description of certain provisions of our articles of association as last amended
    on 11 April 2005, pertaining to the rights and restrictions applicable to
    our ordinary shares. A description pertaining to the powers and restrictions
    applicable to members of the Board of Management and members of the Supervisory
    Board can be found in chapter 7 and chapter 9. These descriptions do not purport
    to be complete and are qualified in their entirety by reference to our articles
    of association, book 2 of the Dutch Civil Code and other Dutch laws. Copies
    of our articles of association are available on our website and upon request
    from us and have been filed with the SEC. We have called an extraordinary
    general meeting of shareholders for 27 February 2006 at which we will propose
    to amend our articles of association in order to decrease the authorised share
    capital. The proposed amendment will not bring any changes to the rights and
    restrictions applicable to our ordinary shares as described in this chapter,
    nor to the powers and restrictions applicable to members of the Board of Management
    and members of the Supervisory Board as described in chapters 7 and 9. The amendment of our
    articles of association that was effected on 11 April 2005 served to bring
    the articles of association further in line with the act on amendment of book
    2 of the Dutch Civil Code in respect of the amendment of the Dutch large company
    rules that entered into force as per 1 October 2004. These amendments pertain
    to the provisions on appointment of members of the Supervisory Board,




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approval of resolutions
    of the Board of Management by the general meeting of shareholders and the
    fact that the financial statements are adopted by the general meeting of shareholders
    and no longer by the Supervisory Board. Furthermore, the name of our company
    was changed from TPG N.V. into TNT N.V. and some technical amendments were
    implemented. GENERALPursuant 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. Under these rules, subject to
    statutory exceptions, the supervisory board, rather than the general meeting
    of shareholders, •
      has the right to
        nominate members of the supervisory board for appointment by the general
        meeting of shareholders,•
      appoints and dismisses
        members of the board of management, and•
      must approve certain
        resolutions by the board of management. See for further information
    on the applicable rules on the large company regime page 66. We have our corporate
    seat in Amsterdam, the Netherlands. We are registered in the Commercial Register
    in Amsterdam under number 27168968. CORPORATE PURPOSEArticle 4 of our articles of association provides that our
    business activity shall be, among other things: •
      to conduct holding
        activities in enterprises that, among other things, operate in the field
        of the transportation, distribution and delivery of letters, messages,
        parcels and goods, as well as the storing, converting and transmitting
        of information, the management and disposal of information, the providing
        of logistics services and the providing of money transactions,•
      to permit our subsidiaries
        to carry out the concessions or licences granted by the Dutch government
        for the activities described above, and•
      to conduct other
        holding and financing activities. ISSUANCE OF ORDINARY
    SHARESWe may issue ordinary shares and grant rights to subscribe
    for ordinary shares, including options and warrants, pursuant to a resolution
    of the Board of Management, subject to the approval of the Supervisory Board
    and the holder of the special share. The scope and duration of this authority
    of the Board of Management is to be determined by the general meeting of shareholders.
    Under our articlesof
    association as they currently read, we may issue up to a maximum of 1,200,000,000
    ordinary shares. Provided that the proposed amendment of our articles of association,
    that will be submitted to the extraordinary general meeting of




shareholders to be held
    on 27 February 2006, is effectuated, we may then issue up to a maximum of
    900,000,000 ordinary shares. On 7 April 2005, the annual general meeting of
    shareholders extended the current authority of the Board of Management to
    issue ordinary shares, up to a maximum of 10% of the issued share capital
    and an additional 10% of the issued share capital in case an issuance takes
    place in relation to a merger or acquisition. This authority will terminate
    on 7 October 2006. The general meeting of shareholders can, in accordance
    with our articles of association and subject to approval of the holder of
    the special share, extend this authority for a period not exceeding five years
    or extend this authority by amending our articles of association to that effect.
    If no such extension is given, the issuance of ordinary shares or rights to
    subscribe for ordinary shares requires a resolution of the general meeting
    of shareholders, upon a proposal of the Board of Management approved by the
    Supervisory Board. Such resolution of the general meeting of shareholders
    also requires the approval of the holder of the special share. RIGHTS ATTACHED TO
    EACH CLASS OF SHARESVoting rights and general meetings of 
    shareholdersWe 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. Other general meetings of shareholders are held
    as often as the Board of Management or the Supervisory Board deem necessary,
    subject to applicable provisions of Dutch law. One or more shareholders representing
    at least 10% of our issued share capital may, upon their request, be authorised
    by the president of the court to call a general meeting of shareholders. The
    president will only give this authorisation if these shareholders have a reasonable
    interest in a general meeting of shareholders being held, if these shareholders
    have requested our Board of Management and our Supervisory Board in writing
    to call a general meeting of shareholders, stating their proposed agenda in
    detail, and our Board of Management and our Supervisory Board have not taken
    steps to ensure that a general meeting of shareholders can be held within
    six weeks after their request. General meetings of shareholders are convened
    by 15 days prior notice published in a nationally distributed daily
    newspaper and in the Official Price List of Euronext Amsterdam N.V. There
    are no quorum requirements applicable to general meetings of shareholders,
    unless otherwise required by Dutch law. General meetings of shareholders may
    only be held in Amsterdam, The Hague, Hoofddorp or in the municipality of
    Haarlemmermeer (Schiphol). One or more shareholders
    holding shares representing at least 1% of our issued share capital or representing
    according to the Official Price List a value of €50 million 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




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Supervisory Board in
    writing, at least sixty days before the date of the general meeting of shareholders. Each shareholder has
    the right to attend general meetings of shareholders, either in person or
    by written or electronic proxy, to address the meeting and to exercise voting
    rights, subject to the provisions of our articles of association, provided
    that such shareholder has the aforementioned rights on the applicable record
    date set by the Board of Management, which date may not in any event be earlier
    than seven days prior to the date of the meeting. Holders of shares in registered
    form must notify us in writing of their intention to attend, in each case
    by the date specified in the notice of the meeting, which date may not in
    any event be earlier than seven days prior to the date of the meeting. Holders
    of shares in bearer form must request their relevant associated institution
    within the meaning of the Dutch Securities Bank Giro Transfer Act (Wet
    giraal effectenverkeer) to deliver a written statement, to the address
    specified in the notice of the meeting and in each case by the date specified
    in the notice of the meeting, which date may not in any event be earlier than
    seven days prior to the date of the meeting, stating that the relevant holder
    of shares is entitled to a given number of shares in bearer form on the record
    date. Instruments of proxy must be delivered to us no later than on the date
    specified in the notice of the meeting, which date may not in any event be
    earlier than seven days prior to the date of the meeting. 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. Dividend rightsOur articles of association provide that within five months
    after the end of our financial year, the Board of Management must prepare
    financial statements accompanied by an annual report, to be adopted by the
    general meeting of shareholders. Within this same period, the Supervisory
    Board shall prepare a report that shall be added to the financial statements
    and the annual report. The general meeting of shareholders can extend this
    period of five months by a maximum of six months on account of special circumstances. We 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. We first have to pay dividends
    on the special share equal to 7% of its nominal value each year. 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 such preference shares




B, 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,
    depending on prevailing market conditions, over the financial year to which
    the distribution relates. After payment of dividends
    on the special share and the preference shares B, the Board of Management
    may then determine, with the approval of the Supervisory Board, to appropriate
    part of the remaining profits to reserves. The profits remaining after appropriation
    to reserves are 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
    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 State of the Netherlands, in its capacity as holder
    of the special share, has agreed with us that it will give any such approval
    within a period of two business days after a written request from us. The
    State of the Netherlands will give this approval without prejudice to the
    option, if such option is made available to holders of ordinary shares, of
    the State of the Netherlands in its capacity as holder of ordinary shares
    to choose between a dividend paid in cash or in ordinary shares. 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. In accordance with article
    35, paragraph 6 of the articles of association, no dividend shall be paid
    on shares held by us in our own capital. Shares we hold in our own capital
    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. Our policy 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) at the time of determination
    and in the event of any change and the resolution to determine and pay dividends
    shall be dealt with and explained as a separate agenda item at the annual
    general meeting of shareholders. The policy on additions to reserves and on
    dividends 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 expensesare
    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.




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Redemption provisionNone of our ordinary shares is subject to any redemption provisions.
  Sinking fund provisionNone of our ordinary shares is subject to any sinking fund
    provisions under our articles of association or as a matter of Dutch law.
  Liability to further
    calls or assessmentsAll of our outstanding shares are fully paid and non-assessable.
  Discriminatory provisionsThere are no discriminatory provisions against any of our shareholders
    as a result of owning a substantial number of shares. Pre-emptive rightsExcept for issuances of ordinary shares for non-cash consideration
    and issuances to our employees, holders of ordinary shares have pre-emptive
    rights to subscribe for new issuances of ordinary shares in proportion to
    their shareholdings. These rights may be restricted or excluded by a resolution
    of the Board of Management, subject to the approval of the Supervisory Board
    and the holder of the special share. The State of the Netherlands, in its
    capacity as holder of ordinary shares and the special share, has agreed with
    us that it will vote in favour of any proposal submitted annually to the general
    meeting of shareholders by the Board of Management to extend the authority
    of the Board of Management to restrict or exclude the pre-emptive rights of
    holders of ordinary shares. On 7 April 2005, the annual general meeting of
    shareholders extended the current authority of the Board of Management to
    restrict or exclude the pre-emptive rights of holders of ordinary shares,
    up to a maximum of 10% of the issued share capital and an additional 10% of
    the issued share capital in case an issuance takes place in relation to a
    merger or acquisition. The authority will terminate on 7 October 2006. Holders
    of ADSs may not be able to exercise preemptive rights granted to holders of
    ordinary shares. ACQUISITION BY US
    OF OUR OWN SHARESWe may acquire our own shares, subject to the requirements
    of Dutch law and our articles of association, if: •
      our shareholders
        equity less the payment required to make the acquisition does not fall
        below the sum of paid-up capital and any reserves required by Dutch law
        or the articles of association, and•
      after the share acquisition,
        we would not hold shares with an aggregate nominal value exceeding one-tenth
        of our issued share capital. We cannot vote on shares
    held by us in our own capital. An acquisition by us
    of shares in our own capital may be effected by the Board of Management, subject
    to the approval of the Supervisory Board and, if the acquisition amounts to




more than 1% of the issued
    ordinary shares, the approval of the holder of the special share. We may only
    acquire shares in our own capital if the general meeting of shareholders has
    granted the Board of Management the authorisation to effect such acquisitions.
    Such an authorisation may apply for a maximum period of 18 months 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.
    The current authorisation expires on 7 October 2006. Under this authorisation,
    the maximum number of ordinary shares that can be acquired cannot exceed the
    maximum amount authorised by law (currently 10%) of the issued ordinary shares
    at the time of the acquisition, for a price per ordinary share not less than
    €0.01 and not exceeding the average of the closing prices of the ordinary
    shares as published in the Official Price List for the five trading days prior
    to the day of acquisition, plus 10% of such average. We may acquire our own
    shares for the purpose of transferring those shares to our employees pursuant
    to any arrangements applicable to such employees, subject to the requirements
    of Dutch law, provided however, that our Board of Management shall not require
    authorisation by the general meeting of shareholders for such acquisitions. REDUCTION OF CAPITALUpon a proposal of the Board of Management, which proposal
    must be approved by the Supervisory Board, the general meeting of shareholders
    may reduce our outstanding share capital by cancellation of shares or by reducing
    the nominal value of shares subject to the provisions of the articles of association. CHANGES IN CAPITALThe conditions imposed by our articles of association for changes
    in capital are described above under Issuance of ordinary shares
    (page 195), Pre-emptive rights (page 197), Acquisition by
    us of our own shares (page 197) and Reduction of capital
    (page 197). The following conditions
    for changes in capital are more stringent than required under Dutch law: •
      resolutions
        of the general meeting of shareholders to extend the authorisation of
        the Board of Management to issue shares and to restrict or exclude pre-emptive
        rights of holders of ordinary shares are subject to the approval of the
        holder of the special share,•
      resolutions
        of the general meeting of shareholders to reduce the issued capital can
        only be adopted upon a proposal of the Board of Management, and•
      resolutions
        of the Board of Management to issue shares, to restrict or exclude the
        pre-emptive rights of holders ofordinary
        shares and to have the company acquire/alienate more than 1% of the issued
        capital in the form of ordinary shares are subject to the approval of
        the holder of the special share.




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RELEASE FROM LIABILITIESAt the annual general meeting of shareholders, the general
    meeting of shareholders is, after the adoption of the financial statements,
    requested to adopt resolutions, releasing the members of the Board of Management
    and the members of the Supervisory Board respectively from actual or potential
    liabilities in connection with the execution of their duties during the financial
    year. The release from liability obtained by the members of the Board of Management
    and the members of the Supervisory Board is limited to the facts reflected
    in the financial statements or otherwise disclosed to the general meeting
    of shareholders prior to the adoption of the financial statements. However,
    the scope of a release from liability is subject to limitations by virtue
    of the law.
  INDEMNITYThe company indemnifies the members of the Board of Management
    and of the Supervisory Board against any and all liabilities incurred by the
    relevant member as a result of any action brought by any party other than
    the company itself or its group companies, in relation to acts or omissions
    related to his/her capacity as a member of the Board of Management or of the
    Supervisory Board. The company reimburses any expenses incurred by such member
    in connection with such actions, but only upon receipt of a written undertaking
    by that member that the member will repay such expenses if a competent court
    determines that the member is not entitled to be indemnified. This indemnity
    does not apply to claims relating to the gaining of personal profits, advantages
    or remuneration to which the member was not legally entitled, or if the relevant
    member is adjudged to be liable for willful misconduct (opzet) or intentional
    recklessness (bewuste roekeloosheid). The indemnity does not cover
    liability of a member of the Board of Management or of the Supervisory Board
    toward the company itself. Nor does the indemnity apply to the extent claims
    and expenses are reimbursed by insurers.
  REMUNERATION POLICY
    FOR THE BOARD OF 
    MANAGEMENT/SUPERVISORY BOARDThe general meeting of shareholders adopts the remuneration
    policy for the Board of Management. The remuneration itself is determined
    by the Supervisory Board.
  The general meeting of
    shareholders determines the remuneration of the members of the Supervisory
    Board.
  AMENDMENTS TO THE
    ARTICLES OF ASSOCIATION, 
    STATUTORY MERGER AND DISSOLUTIONA resolution of the general meeting of shareholders to amend
    the articles of association (including with respect to changing the rights
    of holders of our ordinary shares), to enter into a statutory merger or demerger
    within the meaning of part 7, book 2 of the Dutch Civil Code or to dissolve
    us may only beadopted upon a proposal of the Board of Management that has been approved
    by the Supervisory Board. The holder of the special share must approve the
    resolutions of the general meeting of shareholders as described on page 194
    under The ownership interests of the State of the Netherlands.




CHANGE IN CONTROL
    PROVISIONSNone of our shares is subject to any change in control provision. LARGE COMPANY REGIMEPursuant to the Enabling Act as currently in force, we are
    subject to the full large company regime. APPOINTMENT OF MEMBERS
    OF SUPERVISORY BOARD 
    UNDER LARGE COMPANY REGIMEUnder the provisions of the large company regime, the members
    of the Supervisory Board are appointed by the general meeting of shareholders
    following nomination by the Supervisory Board. Both the general meeting of
    shareholders and the central works council may make recommendations and must
    be informed about this right as well as of the profile of vacancies. Nominations
    by the Supervisory Board must be reasoned against the Supervisory Board profile,
    which will be made available and must be discussed with the general meeting
    of shareholders and the central works council at the time of determination
    and in the event of any change. The central works council
    has a special right of recommendation for one-third of the total number of
    members of the Supervisory Board. The only circumstances in which the Supervisory
    Board may decide not to put a person on the nomination as recommended by the
    central works council are if the nominee is considered unsuitable to fulfil
    the function of a member of the Supervisory Board or if, upon acceptance,
    the Supervisory Board would not be composed properly. The Dutch Enterprise
    Chamber is the competent court to decide on disputes between the central works
    council and the Supervisory Board in this respect. The transitional arrangement
    of the provisions of Dutch law on the large company regime obligates the Supervisory
    Board to grant the special right of recommendation to the central works council
    on every second vacancy until one-third of the members of the Supervisory
    Board has been appointed accordingly. The general meeting of
    shareholders may reject a nomination by the Supervisory Board with a majority
    of votes representing one-third of the issued share capital. If the general
    meeting of shareholders resolves by majority of votes to reject the nomination,
    but the quorum is not met, a new meeting should be convened, in which case
    the quorum requirement is not applicable. The general meeting of
    shareholders can dismiss the Supervisory Board as a whole, with a majority
    of votes representing one-third of the issued share capital. APPROVAL GENERAL MEETING
    OF SHAREHOLDERSPursuant to article 107a, book 2 of the Dutch Civil Code, certain
    resolutions of the Board of Management entailing a significant change in the
    identity or character of TNT or its business are subject to the approval of
    the general meeting of shareholders.


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When the Board of Management
    represents the company in a matter described in article 107a, book 2 of the
    Dutch Civil Code whilst the general meeting of shareholders has not approved
    the underlying resolution of the Board of Management, the company will be
    bound towards the third party involved. The approval of the general meeting
    of shareholders is not indispensable for the Board of Management to effectuate
    its resolution. RESTRICTION ON NON-DUTCH
    SHAREHOLDERS RIGHTSUnder our articles of association there are no limitations
    on 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. OBLIGATIONS OF SHAREHOLDERS
    
    TO DISCLOSE HOLDINGS The Act on Disclosure
    of Holdings in Listed Companies 1996 (Wet melding zeggenschap in ter beurze
    genoteerde vennootschappen 1996) applies to any person who, directly or
    indirectly, acquires or disposes of an interest in the voting rights and/or
    the capital of a public limited liability company incorporated under Dutch
    law with an official listing on a stock exchange within the European Economic
    Area, if as a result of such acquisition or disposal the interest falls within
    a different percentage range. The percentage ranges referred to in the Act
    on Disclosure of Holdings in Listed Companies 1996 are 0-5, 5-10, 10-25, 25-50,
    50-66.6 and over 66.6. Failure to comply with
    the Act on Disclosure of Holdings in Listed Companies 1996 constitutes an
    economic offence. In addition, a civil court can issue sanctions against any
    person who fails to notify, or incorrectly notifies us and the Authority Financial
    Markets in accordance with the Act on Disclosure of Holdings in Listed Companies
    1996. Possible court sanctions include the suspension of voting rights with
    respect to the ordinary shares held by such person.




MATERIAL CONTRACTS On 23 June 1998, we entered
    into an agreement with the State of the Netherlands. The terms of this agreement
    were modified, subject to the approval of the Dutch parliament, by a letter
    agreement dated 9 March 2001, between us and the State of the Netherlands.
    For a description of certainterms
    of this agreement, see page 194  The ownership interests
    of the State of the Netherlands. EXCHANGE CONTROLS 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. SIGNIFICANT SUBSIDIARIES TNT N.V. is the parent
    company of the group. The following table sets forth, as at 31 December 2005,
    the name and jurisdiction of incorporation of our significant subsidiaries. Significant subsidiariesCompany
      Country
      
      Equity
        InterestRoyal TPG Post B.V.
      Netherlands
      
      100
      %TNT Express Holdings
        B.V.
      Netherlands
      
      100
      %TNT Logistics Holdings
        B.V.
      Netherlands
      
      100
      %TNT Holdings (UK)
        Ltd.
      United
        Kingdom
      
      100
      %TNT Newco Ltd.
      United
        Kingdom
      
      100
      %TNT Headoffice B.V.
      Netherlands
      
      100
      %TNT Finance B.V.
      Netherlands
      
      100
      %TNT Holdings B.V.
      Netherlands
      
      100
      %TNT Holdings (Deutschland)
        GmbH
      Germany
      
      100
      % 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. PROPERTY, PLANTS AND
    
    EQUIPMENT We use 1,554 buildings,
    not including buildings used by our discontinued operations. In general, we
    believe that our facilities are significantly utilised and we believe they
    contain sufficient capacity for next years business forecast.


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      14
    Additional informationMAILOur mail division uses 546 sorting centres and distribution depots in
    the Netherlands. No material portion of our mail properties is subject to
    any encumbrances. The principal mail facilities are as follows:


Mail facilitiesLocation
    Owned/leased
    
    Principal
      use
    
    Site areaAmsterdam-Schiphol,
      the Netherlands
    Leased
    
    Sorting
      centre (international mail)
    
    13,125
      sq. metresAmsterdam, the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    48,970
      sq. metress Hertogenbosch,
      the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    49,460
      sq. metresThe Hague, the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    48,110
      sq. metresNieuwegein, the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    57,530
      sq. metresRotterdam, the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    40,240
      sq. metresZwolle, the Netherlands
    Owned
    
    Sorting
      centre (letters)
    
    56,560
      sq. metresAmsterdam, the Netherlands
    Owned
    
    Sorting
      centre (parcels)
    
    31,460
      sq. metresDordrecht, the Netherlands
    Owned
    
    Sorting
      centre (parcels)
    
    28,250
      sq. metresZwolle, the Netherlands
    Owned
    
    Sorting
      centre (parcels)
    
    32,210
      sq. metresArnhem, the Netherlands
    Owned
    
    Sorting
      centre (registered mail)
    
    48,920
      sq. metresEXPRESSOur express segment uses 882 depots, road and air hubs. The
    principal express facilities are as follows:


Express facilitiesLocation
    Owned/leased
    
    Principal
      use
    
    Site areaLiège, Belgium
    Leased
    
    International air hub
    
    100,528 sq. metresWiesbaden, Germany
    Owned
    
    Sorting centre and
      road hub
    
    65,500 sq. metresArnhem, the Netherlands
    Owned
    
    International road
      hub
    
    120,930 sq. metresBrussels, Belgium
    Leased
    
    Sorting centre and
      road hub
    
    67,150 sq. metresNo material portion of
    our properties is subject to any encumbrances.
  FREIGHT MANAGEMENTFreight management uses 126 offices and warehouses, representing
    in total approximately 175,000 square metres, all of which are leased and
    none of which are considered principle facilities.
  EMPLOYEES
  For the number of employees
    and full-time equivalents see note 19 of our consolidated financial statements
    on page 144.
  LABOUR RELATIONSEuropean regionA significant number of our employees in Europe is presently
    represented by trade unions. Our labour relations in Europe have been good
    and we have not experienced any material

work stoppages in recent
    years. In 2004 there was a four day stoppage at Turin TNT Automotive Logistics
    and there was a 22-day stoppage in one plant due to issues related to a customer.
    During 2005, there were stoppages in Italy amounting to a total of 4,643 hours
    (covering 3,800 blue collar workers in 17 locations), and in France limited
    action also took place (two day stoppage at one site for 100 workers).
  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.

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    Chapter
        14Employees 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 approval from one
    or more of the works councils before proceeding with a course of action. Under
    Dutch law, our central works council may make recommendations for candidates
    to fill vacancies on our Supervisory Board. For further information on the
    recommendation rights of the central works council, see page 198. Furthermore,
    we are obliged to apprise the European works council of activities that affect
    our workforce in Europe.
  Other regionsExcept for our employees in Australia and those of our discontinued
    logistics business in the United States, our employees outside Europe are
    generally neither represented by trade unions nor employed pursuant to collective
    labour agreements. Trade unions represent less than 50% of our employees in
    Australia and fewer than 50% within our discontinued logistics operations
    in the United States. Labour relations have been good and we have not, apart
    from certain labour disputes and some small (1/2  1 day) work stoppages
    in 2004 in Australia, experienced any material work stoppages in recent years.
  LEGAL PROCEEDINGS
  For an overview of the
    legal proceedings, see chapter 12, page 160.
  TAXATION
  GENERALThe following is a summary of the material Dutch and US tax
    consequences of the ownership of ordinary shares or American Depositary Shares
    (ADSs), in particular by US holders (as defined below). The summary does not
    purport to be a comprehensive description of all of the tax considerations
    that may be relevant to a decision to purchase ordinary shares or ADSs, and
    prospective investors should consult their professional advisors as to the
    tax consequences of their purchase, ownership and disposition of the ordinary
    shares and ADSs, including the consequences under applicable federal, state,
    local and foreign law. In particular, the summary does not address US holders
    that do not hold the shares or ADSs as capital assets and the tax treatment
    of holders subject to special tax rules, such as banks, insurance companies
    and dealers in securities, investors liable for alternative minimum tax or
    investors who hold ordinary shares or ADSs as part of a straddle or a hedging
    or conversion transaction, some of which may be subject to special rules.
    This summary should not be read as extending by implication to matters not
    specifically discussed herein. Additional rules may apply to holders who themselves
    or through affiliates actually or constructively own 10% or more of the voting
    power or value of the ordinary shares or ADSs as determined by US Federal
    income tax law.

The
    Dutch rules applying to holders of a substantial interest, in
    broad terms, foreign 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
    – are not addressed in this summary other than in general terms. With
    respect to US holders, this discussion generally applies only to such holders
    who hold ordinary shares or ADSs as a portfolio investment. This summary does
    not take into account the specific circumstances of any particular US holder
    although such circumstances might materially affect the general tax treatment
    of such US holder.
  For the purposes of this
    discussion, a US holder is a holder of ordinary shares or ADSs that is a person
    who is a citizen or resident of the United States or who holds ordinary shares
    or ADSs as assets effectively connected with a US trade or business. This
    discussion does not purport to be a complete analysis or listing of all potential
    tax consequences of the purchase, ownership and disposal of ordinary shares
    or ADSs.
  In general, for Dutch
    tax purposes, US holders of ADSs will be treated as the beneficial owners
    of the ordinary shares represented by such ADSs.
  It is assumed for purposes
    of this summary that a US holder is entitled to the benefits of the 1992 Treaty
    (as defined below). However, US holders should consult with their tax advisors
    regarding their status under the limitation of benefits article under the
    1992 Treaty. With respect to the applicable 1992 Treaty it is important to
    notice that during the year 2004 a new protocol to the 1992 Treaty was ratified
    by both the Dutch parliament (in June 2004) and the US senate (on 17 November
    2004). The protocol became effective for taxable periods beginning on or after
    1 January 2005. The provisions of the protocol relating to withholding taxes
    became effective for amounts paid or credited on or after 1 February 2005.
  DUTCH TAXATIONGeneralThe descriptions of the Dutch tax laws and practices set forth
    below are based on the statutes, regulations, rulings, judicial decisions
    and other authorities in force and applied in practice on 1 January 2006,
    all of which are subject to change (possibly with retroactive effect) and
    differing interpretations. In this description Dutch legal concepts are sometimes
    expressed in English terms and not in their original Dutch terms. These concepts
    may not be identical to the concepts designated by the same English term,
    as they exist under the laws of jurisdictions other than the Netherlands.
  In this chapter a distinction
    is made between residents of the Netherlands and non-residents of the Netherlands.
    Whether an investor qualifies as a resident of the Netherlands or as a non-resident
    of the Netherlands is based on facts, as well as on several fictions in Dutch
    tax legislation. In this section we will address the relevant Dutch dividend
    withholding tax, personal income tax, corporate income taxand
    gift, estate and

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      14
    Additional informationinheritance tax aspects
    of the ownership of ordinary shares or ADSs.
  Dutch withholding
    tax on dividendsDividends (or similar income derived from shares qualifying
    as such under the Dutch Dividend Withholding Tax Act 1965, hereinafter referred
    to as income) distributed by the company are in principle subject to tax at
    source at the current rate of 25%, which will be withheld and remitted by
    the company to the Dutch tax authorities.
  As regards US holders
    the following will apply. A US holder can only claim the benefits of the tax
    treaty for the avoidance of double taxation and the prevention of fiscal evasion
    with respect to taxes on income signed on 18 December 1992 between the State
    of the Netherlands and the United States, as modified by the protocol of 8
    March 2004 (together, the 1992 Treaty), if:
  •
      the person is a resident
        of the United States as defined in the 1992 Treaty,•
      the persons
        entitlement to these benefits is not limited by the limitations on benefits
        provisions of article 26 of the 1992 Treaty, and•
      the person can be
        considered to be the beneficial owner of the dividend. A person may not
        be considered to be the beneficial owner if a dividend would fall under
        the Netherlands anti-dividend stripping rules.Under the 1992 Treaty,
    dividends paid by the company to a resident of the United States, other than
    an exempt organisation or exempt pension trust, as described below, are generally
    eligible for a reduction of the 25% Dutch withholding tax to 15%, provided
    that the holder does not carry on an enterprise in the Netherlands through
    a permanent establishment, permanent representative or fixed base to which
    or to whom the ordinary shares or ADSs are attributable. If and to the extent
    the ordinary shares or ADSs are attributable to such a permanent establishment
    or representative, Dutch withholding tax will in principle amount to 25%.
    The 1992 Treaty provides for a complete exemption for dividends received by
    exempt pension trusts and exempt organisations, as defined in the 1992 Treaty.
    Except in the case of exempt organisations, this reduced dividend withholding
    rate can be applied for at source upon payment of the dividend; exempt organisations
    remain subject to the statutory dividend withholding tax rate of 25% and are
    required to file for a refund of this dividend withholding tax.
  A US holder other than
    an exempt organisation, generally may claim the benefits of a reduced withholding
    tax rate pursuant to the 1992 Treaty by submitting a Form IB 92 USA, which
    includes a bankers affidavit stating that the ordinary shares or ADSs
    are in the banks custody in the name of the applicant, or that the ordinary
    shares or ADSs have been exhibited to the bank as being the property of the
    applicant. If the Form IB 92 USA is submitted prior to the dividend payment
    date, the reduced withholding tax rate can be applied to the dividend.

A
    US holder unable to claim
    withholding tax relief in this manner can obtain a refund of excess tax withheld
    by filing a Form IB 92 USA and describing the circumstances that prevented
    a claim for dividend withholding tax relief at source.
  Qualifying exempt organisations
    other than exempt pension trusts may seek a refund of the tax withheld by
    submitting Form IB 95 USA, which also includes a bankers affidavit.
  Under the Dutch anti-dividend
    stripping rules the recipient of a dividend is not considered to be the beneficial
    owner if it is plausible that:
  •
      the recipient paid,
        directly or indirectly, a consideration, in cash or in kind, in connection
        with the dividend distribution, and the payment forms part of a sequence
        of related transactions,•
      an individual or
        a company benefited, in whole or in part, directly or indirectly, from
        the dividend, and that individual or company would have been entitled
        to a less favourable relief from Dutch dividend withholding tax than the
        recipient of the dividend distribution, and•
      that individual or
        company directly or indirectly retains or obtains a position in the shares
        that is comparable to its position in similar shares before the sequence
        of related transactions commenced.As described above, as
    of January 2005 the protocol of the 1992 Treaty became effective. With respect
    to withholding taxes the protocol became effective as of 1 February 2005.
    The new protocol, under strict conditions, provides for 0% Dutch dividend
    withholding tax on dividends paid to a US company owning shares that represent
    at least 80% of the voting power in a Dutch company. Furthermore shareholders
    that do not qualify for the 0% rate may, under certain conditions, qualify
    for a 5% withholding tax rate. In all other cases, as described above, a company,
    apart from those listed above, that can claim treaty benefits is entitled
    to a reduction of the Dutch withholding tax to 15%. In addition, as of 1 January
    2005, several changes apply to article 26, stipulating which shareholders
    can benefit from the 1992 Treaty.
  Personal income tax
    in respect of dividendsUnder the Personal Income Tax Act 2001, income is divided into
    three separate boxes each of which is governed by its own rules:
  •
      box I (work and private
        residence) includes business and employment income, income from receivables
        and income from assets made available to a company in which the individual
        holds a substantial shareholding and income from the main private residence,•
      box II (substantial
        interest) includes dividend income and capital gains from substantial
        shareholdings, and•
      box III (savings
        and investments) covers passive income from capital.

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        14Losses from one box can,
    in principle, not be offset against income from another box. The elements
    of income will be allocated to the spouse or partner that has received the
    income. A summary of the box system is described below in respect of the ordinary
    shares and ADSs.
  Personal income tax
    in respect of the
    ordinary shares or ADSsRESIDENT INDIVIDUALS OF THE NETHERLANDS AND
    CERTAIN NON-RESIDENT INDIVIDUALS THAT HAVE ELECTED
    TO BE TAXED AS A RESIDENT
  BOX I (WORK AND PRIVATE
    RESIDENCE)An individual Dutch shareholder, who holds the ordinary shares
    or ADSs that can be attributed to the business assets of an enterprise which
    is, in whole or in part, carried on for the account of this shareholder, is
    liable to income tax on the dividends derived from the ordinary shares or
    ADSs at the progressive rates of box I, the maximum rate being 52%. Income
    derived or gains realised that qualify as income from miscellaneous
    activities (resultaat uit overige werkzaamheden), which include
    activities with respect to the ordinary shares or ADSs that exceed regular,
    active portfolio management (normaal, actief vermogensbeheer),
    are also taxable at the progressive rates of box 1.
  BOX II (SUBSTANTIAL
    INTEREST)Income from substantial interests (broadly, shareholdings of
    at least 5% including rights to acquire such shareholdings) is taxed in box
    II. The tax rate amounts to 25%. Losses from a substantial interest may only
    be offset against income from a substantial interest and not against income
    from box I (work and private residence) or box III (savings and investments).
    There is a possibility for a credit for losses not compensated against the
    income tax liability of box II. Such tax credit is limited to 25% of the amount
    of the loss, and can only be claimed on condition that the holder of the substantial
    interest has sold all of that interest and holds no such interest in another
    entity. Interest related to the financing of a substantial interest is only
    deductible against the 25% rate. Income from loans to the company as well
    as income from other assets which are made available to the company are not
    taxable in box II, but in box I. Stock dividends received/derived will not
    be considered to form taxable income in box II at the moment of receipt. The
    purchase price of such stock dividend will in principle amount to zero.
  BOX III (SAVINGS AND
    INVESTMENTS)Income derived from capital (savings and investments) is taxed
    according to the regime of box III. Taxable income is determined annually
    on the basis of a fictitious – i.e. deemed – return on capital.
    This deemed return has been fixed at 4% of average net capital, assets less
    liabilities at market value, on 1 January and 31 December of any year. In
    this respect, assets and liabilities relating to income from box I and box
    II are not taken into account. The taxable income is computed without regard
    to the actual income and capital gains received. Thus, if actual income exceeds
    4%, tax will still only be levied on the

basis of 4%. On the other
    hand, there is no reduction in tax if the actual income is less than 4%. The
    deemed income is taxed at 30%.
  In principle, under the
    provisions of the Personal Income Tax Act 2001 the Dutch dividend tax can
    be credited, or refunded, for Dutch residents. This credit is also available
    against tax under box III. However, in case of dividend stripping transactions,
    the dividend withholding tax cannot be credited or refunded if the recipient
    cannot be considered to be the beneficial owner of the dividend. See the discussion
    on Dutch dividend withholding tax above.
  NON-NETHERLANDS RESIDENT
    INDIVIDUALSEU residents and residents of specified countries with which
    the Netherlands has concluded a tax treaty providing for the exchange of information
    who are liable for Netherlands taxation may elect to be taxed according to
    the rules applicable to resident taxpayers. They are then taxed as if they
    were a resident of the Netherlands (see above).
  Non-resident individual
    holders of the ordinary shares or ADSs will be taxable in the Netherlands
    in respect of income or gain from this shareholding if these shares:
  •
      are attributable
        to the business assets of a permanent establishment or permanent representative
        in the Netherlands (box I),generate
        income or gains that qualify as income from miscellaneous activities
        (resultaat uit overige werkzaamheden) in the Netherlands, which
        include activities in the Netherlands with respect to these shares that
        exceed regular, active portfolio management (normaal, actief
        vermogensbeheer) (box I), or•
      belong to a substantial
        interest of the shareholder in the company and this substantial interest
        does not form part of the business assets of an enterprise of the shareholder
        (box II).The right of the Netherlands
    to levy personal income tax on dividends received by non-resident individuals
    may be restricted under specific provisions of applicable tax treaties.
  Dutchcorporate income taxCOMPANIES RESIDENT IN THE NETHERLANDSUnder the Corporate Income Tax Act 1969, dividends received
    are in principle taxed at the ordinary Dutch rate. The ordinary corporate
    income tax rate in 2005 was 31.5% (reduced to 29.6% as of 1 January 2006),
    although the first €22,689 of taxable profit is taxed at 27% (reduced
    to 25.5% as of 1 January 2006). A legal entity or a similar entity qualifying
    as such under Dutch tax law (an entity) which is the beneficial owner of the
    ordinary shares or ADSs and who resides, or is deemed to reside, in the Netherlands,
    is, in principle, able to set off in full the dividend withholding tax withheld
    against its Dutch corporate income tax or claim a refund if it exceeds corporate
    income tax due. If, however, a Dutch resident company receives a dividend
    whichis exempt

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    Additional informationin the Netherlands (e.g.
    under the participation exemption) and tax has been withheld such tax cannot
    be credited against the corporate income tax due but will be refunded to the
    company receiving the dividend. An entity resident in the Netherlands which
    is not subject to Dutch corporate income tax can, under certain conditions,
    request a refund of the dividend tax withheld. An entity subject to Dutch
    corporate income tax for which the shareholding in the company qualifies for
    the participation exemption pursuant to article 13 of the Corporate Income
    Tax Act 1969 will not be subject to Dutch corporate income tax on income derived
    from the ordinary shares or ADSs and is entitled to an exemption from dividend
    tax. The participation exemption normally applies if a Dutch resident entity
    which is subject to corporate income tax at the ordinary rates holds an interest
    of at least 5% of the nominal paid-up share capital of the company. Under
    specific circumstances the participation exemption can also apply to interests
    of less than 5%.
  An entity subject to
    Dutch corporate income tax will not be subject to corporate income tax on
    income derived from the ordinary shares or ADSs if the participation exemption
    pursuant to article 13 of the Corporate Income Tax Act 1969 applies with respect
    to the shareholding in the company.
  COMPANIES NOT RESIDENT
    IN THE NETHERLANDSIf the ordinary shares are attributable to a permanent establishment
    or permanent representative in the Netherlands of a non-resident entity, the
    income distributed by the company will, in principle, be subject to corporate
    income tax at the rate of 31.5% (29.6% as of 1 January 2006), unless the participation
    exemption of article 13 of the Corporate Income Tax Act 1969 applies with
    respect to the shareholding in the company. Any dividend tax withheld can
    generally be set off against the Dutch corporate income tax due on this income,
    provided the recipient is the beneficial owner of the dividend.
  The State of the Netherlands
    has concluded tax treaties with Canada, the United States, Switzerland, Japan,
    all EU member states, Norway and a large number of other countries. Most tax
    treaties concluded by the State of the Netherlands provide for a reduced dividend
    withholding tax rate of 15% for portfolio investment.
  If the shares are not
    attributable to a Dutch permanent establishment or a permanent representative,
    dividends paid to non-resident entities which are shareholders of the company
    are in principle not subject to Dutch corporate income tax (other than the
    dividend withholding tax mentioned above), unless the non-resident shareholder
    holds a substantial interest in the company and the substantial interest does
    not form part of the business assets of an enterprise of the shareholder.
    The right of the Netherlands to tax the dividends may be restricted under
    specific provisions of applicable tax treaties.

Personal income tax
    and corporate income
    tax on capital gainsRESIDENTS OF THE NETHERLANDSIn principle, capital gains derived from the sale of the ordinary
    shares or ADSs by an individual shareholder who resides, or is deemed to reside,
    in the Netherlands are not subject to Dutch personal income tax provided that
    the ordinary shares or ADSs do neither form part of a substantial interest
    nor can be attributed to the enterprise of that individual nor do the capital
    gains realised qualify as income from miscellaneous activities,
    which include activities with respect to the ordinary shares or ADSs that
    exceed regular, active portfolio management. Capital gains realised
    on the disposal of ordinary shares or ADSs that form part of a substantial
    interest of an individual are subject to tax in box II at the special 25%
    rate. The capital gains are subject to personal income tax at the ordinary
    progressive rates of box I, currently up to 52%, if the ordinary shares or
    ADSs form part of the business assets of an enterprise carried on, in whole
    or in part, for the account of an individual or if the capital gains realised
    qualify as income from miscellaneous activities, which include
    activities with respect to the ordinary shares or ADSs that exceed regular,
    active portfolio management.
  If the ordinary shares
    or ADSs are held by a Dutch resident entity, any capital gains derived from
    the sale of the ordinary shares or ADSs are subject to corporate income tax
    at 31.5% (29.6% as of 1 January 2006), unless the shareholding in the company
    qualifies for the participation exemption of article 13 of the Corporate Income
    Tax Act 1969.
  NON-RESIDENTS OF THE
    NETHERLANDSCapital gains realised by non-resident individuals who, or
    non-resident entities which, are shareholders of the company are in principle
    not subject to Dutch personal income tax or Dutch corporate income tax, provided
    that these shareholders:
  •
      do not hold a substantial
        interest in the company, or•
      do not conduct a
        business, trade or other taxable activities, in whole or in part, through
        a permanent establishment or permanent representative in the Netherlands
        to which or to whom the ordinary shares or ADSs are attributable, or•
      if they are individuals,
        do not realise capital gains that qualify as income from miscellaneous
        activities in the Netherlands, which include the performance of
        activities in the Netherlands with respect to the shares that exceed regular,
        active portfolio management.If the ordinary shares
    or ADSs form part of a substantial interest, the capital gain on the disposal
    of the ordinary shares or ADSs is, in principle, subject to tax at a rate
    of 25% for individuals or 31.5% (29.6% as of 1 January 2006) for entities,
    unless the substantial interest forms part of the business assets of an enterprise
    of the shareholder.
  If the ordinary shares
    or ADSs are held by a non-resident entity and can be allocated to a permanent
    establishment or permanent representative in the Netherlands, the capital
    gains may be exempt if the participation exemption applies.

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    Chapter
        14Furthermore, the right
    of the Netherlands to tax the capital gain may be restricted under specific
    provisions of applicable tax treaties.
  Gift, estate or inheritance
    tax in the
    NetherlandsGenerally, gift, estate and inheritance tax will be due in
    the Netherlands with respect to the gift or inheritance of the ordinary shares
    or ADSs if the donor or deceased who owned the ordinary shares or ADSs is
    or was a resident or is or was deemed to be a resident of the Netherlands
    for purposes of Dutch gift and inheritance tax.
  No gift, estate or inheritance
    tax will arise in the Netherlands on a gift of the ordinary shares or ADSs
    by, or on the death of, a holder of the ordinary shares or ADSs who at the
    moment the gift is made is neither a resident nor deemed to be a resident
    of the Netherlands for purposes of Dutch gift and inheritance tax, provided
    that:
  •
      such holder does
        not die within 180 days after having made a gift, while being on the moment
        of his death a resident or a deemed resident of the Netherlands, and•
      such holder at the
        time of the gift, or at the time of his or her death did not have, an
        enterprise or an interest in an enterprise that is or was, in whole or
        in part, carried on through a permanent establishment or a permanent representative
        in the Netherlands and to which permanent establishment or a permanent
        representative, the ordinary shares or ADSs are or were attributable.If the donor or the deceased
    is an individual who holds the Dutch nationality, he will be deemed to be
    resident in the Netherlands for purposes of Dutch gift and inheritance tax
    if he has been resident in the Netherlands at any time during the 10 years
    preceding the date of the gift or his death. If the donor is an individual
    who does not hold the Dutch nationality he will be deemed to be resident in
    the Netherlands for purposes of Dutch gift tax if he has been resident in
    the Netherlands at any time during the 12 months preceding the date of the
    gift. The same twelve-month rule may apply to entities that have transferred
    their seat of residence out of the Netherlands.
  Furthermore, in exceptional
    circumstances, the donor or the deceased will be deemed to be resident in
    the Netherlands for purposes of Dutch gift and inheritance tax if the beneficiary
    of the gift, or all beneficiaries under the estate jointly, as the case may
    be, make an election to that effect.
  UNITED STATES TAXATIONThe following is a summary of certain US Federal income tax
    consequences of the purchase, ownership and disposition of ordinary shares
    as evidenced by ADSs. This summary does not purport to be a complete analysis
    of all potential US Federal income tax consequences of the purchase, ownership
    and disposal of ordinary shares or ADSs.

For purposes of this
    discussion, a US holder means an individual, citizen or resident of the United
    States for US Federal income tax purposes, a corporation, a partnership or
    other entity created or organised under the laws of the United States or any
    state thereof or the District of Columbia, or an estate or trust which is
    resident in the United States for US Federal income tax purposes, in each
    case who
  •
      is not also resident
        of, or ordinarily resident in the Netherlands for Dutch tax purposes,•
      is not engaged in
        a trade or business in the Netherlands through a permanent establishment,
        and•
      does not own, directly,
        indirectly or by attribution, 10% or more of the shares of the company
        (by vote or value).This summary is of a
    general nature only and does not discuss all aspects of the US and Dutch taxation
    that may be relevant to a particular investor. The summary deals only with
    ADSs held by US holders as capital assets and does not address special classes
    of purchasers, such as dealers in securities, traders in securities that elect
    to use a mark-to-market method of accounting for their securities holdings,
    persons that hold ordinary shares or ADSs as part of a straddle or a hedging
    or conversion transaction or as part of a synthetic security or
    other integrated transaction for US Federal income tax purposes, US holders
    whose functional currency is not the US dollar and certain US holders (including,
    but not limited to, insurance companies, tax-exempt organisations, financial
    institutions and persons subject to the alternative minimum tax) who may be
    subject to special rules. If a partnership holds shares or ADSs, the tax treatment
    of a partner generally will depend upon the status of the partner and the
    activities of the partnership.
  Owners of ADSs are urged
    to consult their tax advisors with respect to the tax consequences to them
    of the ownership and disposition of such shares in light of their particular
    circumstances, including the tax consequences under state, local, foreign
    and other tax laws, and the possible effects of changes in US Federal or other
    tax laws.
  In addition, this summary
    is based, in part, upon representations made by the depositary to us and assumes
    that the deposit agreement, and all other related agreements, will be performed
    in accordance with its terms. The US Treasury Department has expressed concern
    that depositaries for ADSs, or other intermediaries between the holders of
    shares of an issuer and the issuer, may be taking actions that are inconsistent
    with the claiming of US foreign tax credits by US holders of such receipts
    or shares. Accordingly, the analysis regarding the availability of a US foreign
    tax credit for Dutch taxes and sourcing rules described below could be affected
    by ongoing and future actions that may be taken by the US Treasury Department.
  For purposes of tax treaties
    and the US Internal Revenue Code of 1986, as amended, US holders that own
    ADSs will be treated as owning ordinary shares.

2005
        Annual Report and Form 20-F
    
    205

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Chapter
      14
    Additional informationUnder the 1992 Treaty,
    the company, other than through its US subsidiaries, will generally not be
    subject to US Federal income tax unless it engages in a trade or business
    in the United States through a permanent establishment. The company intends
    to conduct its business activities in a manner that will not result in its
    non-US entities being considered to be engaged in a trade or business or to
    have a permanent establishment in the United States.
  Taxation of dividendsTo the extent paid out of current or accumulated earnings and
    profits of the company, as determined under US Federal income tax principles
    (E&P), a distribution made with respect to ordinary shares or ADSs (including
    the amount of any additional payment, and any Dutch withholding tax) will
    be includable for US Federal income tax purposes in the income of a US holder
    as ordinary income on the day received by the US holder, in the case of ordinary
    shares, or on the day received by the depositary, in the case of ADSs and
    will be treated as foreign source dividend income. Distributions in excess
    of current and accumulated E&P of the company will be treated as a non-taxable
    return of capital to the extent of the US holders adjusted tax basis
    in the ordinary shares or ADSs and thereafter as taxable capital gain. The
    company has not historically maintained calculations of earnings and profits
    under US Federal income tax principles, although it may be required to do
    so in the future.
  Any such dividend paid
    in euros will be included in the gross income of a US holder in an amount
    equal to the US dollar value of the euros on the date of receipt, which in
    the case of ADSs is the date they are received by the depositary. If dividends
    received in euro are converted into US dollars on the day they are received
    by the depositary, the US holder generally will not be required to recognise
    foreign currency gain or loss in respect of the dividend income. The amount
    of any distribution of property other than cash will be the fair market value
    of such property on the date of distribution.
  Certain dividends paid
    to non-corporate US holders of ADSs in taxable years beginning after 31 December
    2002 and before 1 January 2009 may be taxable at the rate applicable to long-term
    capital gains (generally at a maximum rate of 15%). This reduced income tax
    rate is only applicable to dividends paid by domestic corporations and qualified
    foreign corporations and only with respect to shares held by a qualified
    US holder (i.e. an individual) for a minimum holding period (generally, 61
    days during the 121-day period beginning 60 days before the ex-dividend date).
    Based upon the information contained within the filing of this document with
    the SEC along with other factors the company may be considered a qualified
    foreign corporation. Accordingly, dividends paid to individual US holders
    on shares held for the minimum holding period may be eligible for a reduced
    income tax rate. The reduced income tax rate is not applicable to dividends
    paid by a company that is a passive foreign investment company for the corporations
    taxable year in which the dividend is paid or for the preceding year. This
    reduced tax rate for qualified dividends is scheduled

to expire on 31 December
    2008, unless further extended by congress. Each prospective investor should
    consult its own tax advisor regarding the implications of this legislation.
    In the case of a corporate US holder, dividends on shares and ADSs are taxed
    as ordinary income and will not be eligible for the dividends-received deduction
    generally allowed to US corporations in respect of dividends received from
    other US corporations.
  Dividends paid to US
    holders will generally be subject to a Dutch withholding tax of 25% and will
    generally be eligible for a foreign tax credit. This amount may be reduced
    under the 1992 Treaty and is referred to above under Dutch Taxation
    – Dutch withholding tax on dividends.
  If the US holder is a
    US partnership, trust or estate, the foreign tax credit will be available
    only to the extent that the income derived by such partnership, trust or estate
    is subject to US tax either as the income of a US resident in its hands or
    in the hands of its partners or beneficiaries, as the case may be. The withholding
    tax may, subject to certain limitations, be offset against US Federal taxes
    on foreign source income by filing Internal Revenue Services (IRS) Form
    1116 (or IRS Form 1118 for corporations) Foreign Tax Credit with
    the Federal income tax return. IRS Form 1116 can be obtained by calling 1-800-TAX
    FORM. This tax credit will normally reduce the US tax liability on the dividend.
    A US holder of ADSs or ordinary shares nonetheless will not be entitled to
    claim the tax credit for withholding taxes if the holding of ADSs or ordinary
    shares:
  •
      is effectively connected
        with a permanent establishment situated in the Netherlands through which
        the holder carries on business in the Netherlands, or•
      is effectively connected
        with a fixed base in the Netherlands from which the holder performs independent
        personal services.Further, special rules
    apply if the holder:
  •
      owns at least 10%
        of the ordinary shares of the company (or, in the case of a holder that
        is a US corporation, controls, alone or with one or more associated corporations,
        at least 10% of the voting stock of the company), or•
      is exempt from tax
        in the US on dividends paid by the company.A US holder may elect
    annually either to deduct the Dutch withholding tax (see Dutch Taxation)
    from its income or take the withholding taxes as a credit against its US Federal
    income tax liability, subject to US foreign tax credit limitation rules.
  If and to the extent
    that the company pays a dividend on the common shares or ADSs out of dividend
    income from its non-Dutch subsidiaries and is, therefore, entitled to a credit
    for Dutch tax purposes for foreign taxes attributable to suchdividend
    income from non-Dutch subsidiaries, there is a risk

206
    
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      and Form 20-F

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Additional
        information
    Chapter
        14that the IRS might take
    the position that the allowable credit for Dutch tax purposes constitutes
    a partial subsidy of the companys withholding tax obligation and that,
    therefore, a US holder would not be entitled to a foreign tax credit with
    respect to the amount so allowed. However, this Dutch tax credit is available
    only to the company and does not reduce the amount of withholding tax applied
    against the dividends paid by the company. The company does not believe that
    such a position would be correct because such Dutch credit is based primarily
    on the net dividend received and the US holder does not receive any benefit
    from such Dutch tax credit available to the company.
  Taxation of capital
    gainsIn general, a US holder who is a resident of the United States
    for purposes of the 1992 Treaty and who is entitled to benefits of the 1992
    Treaty under the limitations on benefits provision contained therein will
    not be subject to Dutch taxation on any gain derived from the sale or exchange
    of ADSs, except in certain instances where the US holder maintains a permanent
    establishment or fixed base in the Netherlands. A US resident holder of ADSs
    or ordinary shares generally will be liable for US Federal income tax on such
    gains to the same extent as on any other gains from sales of stock.
  For US tax purposes,
    US holders will generally recognise gain or loss upon the sale or exchange
    of ADSs equal to the difference between the amount realised from the sale
    or exchange of the ADSs and the US holders basis in such ADSs. In general,
    such gain or loss will be US source capital gain or loss. In the case of individual
    US holders, capital gains are subject to US Federal income tax at preferential
    rates if specified minimum holding periods are met and if such shares are
    held as a capital asset. If held for more than one year, such gain or loss
    will generally be long term capital gain or loss. Long term capital gain of
    a non-corporate US holder that is recognised on or after 6 May 2003 and before
    1 January 2009 is generally taxed at a maximum rate of 15%.
  Subject to the discussion
    below under Passive foreign investment company considerations,
    a US holder will be liable for US Federal income tax on gains from sales or
    dispositions of ADSs or ordinary shares to the same extent as on any other
    gains from sales or dispositions of shares.
  Passive foreign investment
    company considerationsIn general, a foreign corporation becomes a passive foreign
    investment company (PFIC) if either 75% of its gross income for a year is
    passive income or 50% of its assets during the year produce or
    are held for the production of passive income. Based on the manner
    in which the company has historically operated its business, the company does
    not believe that it is a PFIC for US Federal income tax purposes. However,
    the company can give no assurances that it will not at some time in the future
    become a PFIC. If the company were classified as a PFIC for any taxable year
    during which aUS
    holder held an ADS or ordinary share, certain adverse tax

consequences could apply
    to the US holder. A prospective purchaser of the companys ADSs should
    consult with its tax advisor regarding the application of the PFIC rules to
    its ownership of an ADS or ordinary share.
  US information reporting
    and backup withholdingGenerally, the amount of dividends paid to US holders of ADSs,
    the name and address of the recipient and the amount, if any, of tax withheld
    must be reported annually to the IRS. A similar report is sent to the US holder.
  A holder of ordinary
    shares or ADSs may be subject to US backup withholding tax, unless such holder:
  •
      is a corporation
        or other exempt recipient and, if required, demonstrates its status as
        such, or•
      provides a US taxpayer
        identification number, certifies as to no loss of exemption from backup
        withholding and otherwise complies with any applicable backup withholding
        requirements. Holders who fail to furnish certain identifying information
        under the US information reporting rules will be subject to backup withholding.
        Amounts withheld from payments will be allowed as a credit against such
        US holders US Federal income tax liability.The backup withholding
    is currently 28% but this rate is subject to change.
  Persons required to establish
    their exempt status generally must provide such certification on IRS Form
    W-9 (Request for Taxpayer Identification Number and Certification) in the
    case of US persons and on the appropriate IRS Form W-8 in the case of non-US
    persons. Holders of ordinary shares should consult their tax advisors regarding
    the application of the information reporting and backup withholding rules,
    including the finalised Treasury regulations.
  United States gift
    and estate taxAn individual US holder will be subject to US gift and estate
    taxes with respect to the ADSs in the same manner and to the same extent as
    with respect to other types of personal property.

2005
        Annual Report and Form 20-F
    
    207

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208
    
    2005 Annual Report
      and Form 20-F



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| | Chapter
        15
| | ------------------



|         
|---------
|INVESTOR 
|         
|RELATIONS
|         





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|Chapter
      15 | Investor relations
|---------------- | ------------------

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FURTHER INFORMATION
    FOR SHAREHOLDERS GENERALWe adhere to the principle that we must explain 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 and institutional 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 must be carefully handled and structured, and the company
    must 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 between 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. These meetings generally occur after publication of
    our second and fourth quarter results, but also happen during other periods
    of the year, for example during broker conferences. We communicate with our
    shareholders through the annual general meeting of shareholders, newsletters
    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.
    Our central officer is responsible for monitoring this process and the meetings.
    Analysts reports and valuations shall not be assessed, commented upon
    or corrected other than factually, by the company in advance of publication.
    For further information visit our 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. Analysts meetings, presentations
    to institutional or other investors shall not take place during the closed
    period. The closed period runs from the end of the financial quarter
    until publication of a quarterly, halfyear or fullyear report. 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 must be dealt with by the members of the Board of Management
    and our investor relations professionals. 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 minutes of shareholders meetings. All shareholders
    resolutions are decided on a poll, except when the issue relates to a vote
    concerning individuals or the meeting decides to have a ballot. The proxy
    votes cast in relation to all resolutions are disclosed to those in attendance
    at the meeting and the results of the poll are published at our website. STOCK EXCHANGE AND
    SHARE PRICE INFORMATIONSince 29 June 1998, following our demerger from KPN, 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, the London Stock Exchange, the New York Stock Exchange
    and the Frankfurt Stock Exchange. On 20 February 2006 we
    announced our intention to end our listing on the London Stock Exchange and
    the Frankfurt Stock Exchange in the first half of 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 TP.




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|Investor
        relations | Chapter
        15
|-------------------------- | ------------------

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|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: |                       |  |                     | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- |  | ------------------- | 
|                                                                                                                                                                                                    | Euronext
      (in €) |  | NYSE
      (in US$) | 
|                                                                                                                                                                                                    |                       |  |                     | 
|                                                                                                                                                                                                    | High                  |  | Low                 | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2001                                                                                                                                                                                                | 28.29                 |  | 16.46               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2002                                                                                                                                                                                                | 25.08                 |  | 14.98               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2003                                                                                                                                                                                                | 19.34                 |  | 11.71               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2004                                                                                                                                                                                                | 20.15                 |  | 16.22               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2005                                                                                                                                                                                                | 26.40                 |  | 19.40               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2003                                                                                                                                                                                                |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 
|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                                                                                                                                                                                                |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 
|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                                                                                                                                                                                                |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 
|1st
      Quarter                                                                                                                                                                                   | 22.45                 |  | 19.65               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|2nd
      Quarter                                                                                                                                                                                   | 22.55                 |  | 20.32               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|3rd
      Quarter                                                                                                                                                                                   | 21.94                 |  | 19.91               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|4th
      Quarter                                                                                                                                                                                   | 26.40                 |  | 19.40               | 
|                                                                                                                                                                                                    |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 
|                                                                                                                                                                                                    |                       |  |                     | 

|                                          | Euronext
      (in €) |  | NYSE
      (in US$) | 
|----------------------------------------- | --------------------- |  | ------------------- | 
|                                          |                       |  |                     | 
|                                          | High                  |  | Low                 | 
|                                          |                       |  |                     | 
|2005                                      |                       |  |                     | 
|                                          |                       |  |                     | 
|July                                      | 20.95                 |  | 20.49               | 
|                                          |                       |  |                     | 
|August                                    | 21.94                 |  | 20.77               | 
|                                          |                       |  |                     | 
|September                                 | 21.43                 |  | 19.91               | 
|                                          |                       |  |                     | 
|October                                   | 20.82                 |  | 19.40               | 
|                                          |                       |  |                     | 
|November                                  | 23.25                 |  | 19.90               | 
|                                          |                       |  |                     | 
|December                                  | 26.40                 |  | 23.50               | 
|                                          |                       |  |                     | 
|2006                                      |                       |  |                     | 
|                                          |                       |  |                     | 
|January                                   | 27.41                 |  | 26.30               | 
|                                          |                       |  |                     | 
|February
      (through 22 February 2006) | 28.47                 |  | 26.90               | 
|                                          |                       |  |                     | 



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|Chapter
      15 | Investor relations
|---------------- | ------------------

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Average daily volume
    (in shares) in 2005 was as follows: Volumes
      2005
      
      20041st Quarter
      1,491,962
      
      1,654,6552nd Quarter
      1,579,483
      
      1,492,0993rd Quarter
      2,491,056
      
      1,491,0894th Quarter
      2,486,541
      
      1,559,948 The highest quotation
    during the year was € 26.40 on 30 December 2005 and the lowest €
    19.40 on 19 October 2005. A total of approximately 20.5 million shares in
    the form of American Depositary Shares (ADSs) were traded on the New York
    Stock Exchange, compared with approximately 5.4 million in 2004. 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. 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 12001
      
      0.9535
      
      0.8370
      
      0.89552002
      
      1.0485
      
      0.8594
      
      0.94512003
      
      1.2597
      
      1.0361
      
      1.14112004
      
      1.3625
      
      1.1801
      
      1.24782005
      
      1.3476
      
      1.1667
      
      1.24001    Average of the noon buying rates on the last
        day of each month during the year.  US$ per €1
      
      High
      
      Low2005July
      
      1.2200
      
      1.1917August
      
      1.2434
      
      1.2147September
      
      1.2538
      
      1.2011October
      
      1.2148
      
      1.1940November
      
      1.2067
      
      1.1667December
      
      1.2041
      
      1.16992006January
      
      1.2287
      
      1.1980February (through
          22 February 2006)
      
      1.2091
      
      1.1889




SHARE PERFORMANCE 2005
      
      2004Stock price (in €)High
      
      26.40
      
      20.15Low
      
      19.40
      
      16.22Close
      
      26.40
      
      19.98Earnings per outstanding
        share (in € cents)
      
      145.0
      
      158.9Dividend in (€
        cents)
      
      63.0
      
      57.0Dividend pay-out
        ratio (as a %)
      
      43.4
      
      35.9Dividend yield (based
        on closing rate for the year)
      
      2.39
      
      2.85P/E Ratio
      
      18.21
      
      12.57Number of issued
        ordinary shares
      
      479,999,999
      
      480,259,522Stock market capitalisation
        (in € billions)
      
      12,672
      
      9,596 Our relative performance
    to the Euronext Amsterdam (AEX) at closing prices during 2005 (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 bearerform. In the United
    States, ordinary shares are held primarily in the form of ADSs. Only bearer
    shares are traded on




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|Investor
        relations | Chapter
        15
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Euronext Amsterdam and
    the other European exchanges on which our ordinary shares are listed. Only
    ADSs are traded on the New York Stock Exchange. Estimated shareholdings
    as percentage of total shares outstanding (excluding treasury shares) per
    31 December 2005 are:  The following table indicates
    the form in which the ordinary shares were held as at 22 February 2006: Form
      Number
        of shares
      
      Percentage
        of outstanding ordinary sharesBearer
        shares
      385,065,260
      
      80.22
      %Non-ADS
        registered shares
      89,117,244
      
      18.57
      %ADSs1
      5,817,496
      
      1.21
      %1
      Held
        by approximately 55 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 beneficial holders of ordinary shares. In 2005, 518.7 million
    TNT shares were traded on the Euronext Amsterdam market (2004: 398.7 million).




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 and the UK-based company Exel, having
    activities in the field of logistics. On 12 December 2005, Exel was delisted
    as a result of a takeover by Deutsche Post. Other peers include 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 2005 is charted below.   DIVIDEND TNT (IN €
  CENTS)We try to meet shareholders return requirements through dividends
    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.  SHARE BUY BACK PROGRAMMEIn addition to returning cash to our shareholders through dividends, we
    may repurchase our own shares. On 6 December 2005, we announced the start
    of a €1 billion share buy back programme. See chapter 14, page 193.




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|-------------------------------- |  | ---

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|Chapter
      15 | Investor relations
|---------------- | ------------------

---

FINANCIAL CALENDAR
    FOR 2006 27 February
      Announcement of 2005
        fourth quarter andfull year resultsTNT extraordinary
        general meeting of 
        shareholders20 April
      TNT annual general
        meeting of shareholders24 April
      Final ex-dividend
        listing (payment one weeklater: 1 May 2006)3 May
      Publication of 2006
        first quarter results31 July
      Publication of 2006
        half year results30 October
      Publication of 2006
        third quarter results DOCUMENTS ON DISPLAY
    Securities 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 Room 1024, 450
    Fifth Street, N.W., Washington, D.C., 20549. You may also receive copies of
    these 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.tpgpost.nl.
    The information on these websites do not form part of this annual report.




TNT INVESTOR RELATIONSThrough 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 2005, we visited investors
    in major financial cities in Europe and the United States. The annual report on
    Form 20-F is filed electronically with the SEC. Mailing
        addressTNT Investor RelationsP.O. Box 130001100 KG AmsterdamThe NetherlandsVisiting addressNeptunusstraat 41-632132 JA HoofddorpThe NetherlandsTelephone
      +31
        20 500 6455Fax
      +31
        20 500 7515E-mail
      investorrelations@tnt.comInternet site
      group.tnt.com




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|Chapter
      16 | 
|---------------- | 

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|         
|---------
|CROSS    
|         
|REFERENCE
|         
|TABLE TO 
|         
|FORM 20-F
|         





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      and Form 20-F
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|Cross
        reference table to Form 20-F | Chapter
        16
|------------------------------------------ | ------------------

---

|Item |  | Required
      item in Form 20-F                            | Page number
|---- |  | ----------------------------------------------------------- | -----------
|     |  |                                                             |            
|     |  | PART I                                                      |            
|     |  |                                                             |            
|1    |  | IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | N/A        
|     |  |                                                             |            
|2    |  | OFFER
      STATISTICS AND EXPECTED TIMETABLE               | N/A        
|     |  |                                                             |            
|3    |  | KEY INFORMATION                                             |            
|     |  | 3A                                                          |            
|     |  | 3B                                                          |            
|     |  | 3C                                                          |            
|     |  | 3D                                                          |            
|     |  |                                                             |            
|4    |  | INFORMATION
      ON THE COMPANY                            |            
|     |  | 4A                                                          |            
|     |  | 4B                                                          |            
|     |  | 4C                                                          |            
|     |  | 4D                                                          |            
|     |  |                                                             |            
|5    |  | OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS          |            
|     |  | 5A                                                          |            
|     |  | 5B                                                          |            
|     |  | 5C                                                          |            
|     |  | 5D                                                          |            
|     |  | 5E                                                          |            
|     |  | 5F                                                          |            
|     |  | 5G                                                          |            
|     |  |                                                             |            
|6    |  | DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES            |            
|     |  | 6A                                                          |            
|     |  | 6B                                                          |            
|     |  | 6C                                                          |            
|     |  | 6D                                                          |            
|     |  | 6E                                                          |            
|     |  |                                                             |            
|7    |  | MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS     |            
|     |  | 7A                                                          |            
|     |  | 7B                                                          |            
|     |  | 7C                                                          |            
|     |  |                                                             |            
|8    |  | FINANCIAL
      INFORMATION                                 |            
|     |  | 8A                                                          |            
|     |  |                                                             |            
|     |  | 8B                                                          |            

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        Annual Report and Form 20-F |  | 217
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|Chapter
      16 | Cross reference table
      to Form 20-F
|---------------- | ----------------------------------------

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|9        |  | THE
      OFFER AND LISTING                                      |                         
|-------- |  | ---------------------------------------------------------------- | ------------------------
|         |  | 9A                                                               |                         
|         |  | 9B                                                               |                         
|         |  | 9C                                                               |                         
|         |  | 9D                                                               |                         
|         |  | 9E                                                               |                         
|         |  | 9F                                                               |                         
|         |  |                                                                  |                         
|10       |  | ADDITIONAL
      INFORMATION                                     |                         
|         |  | 10A                                                              |                         
|         |  | 10B                                                              |                         
|         |  | 10C                                                              |                         
|         |  | 10D                                                              |                         
|         |  | 10E                                                              |                         
|         |  | 10F                                                              |                         
|         |  | 10G                                                              |                         
|         |  | 10H                                                              |                         
|         |  | 10I                                                              |                         
|         |  |                                                                  |                         
|11       |  | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 107                     
|         |  |                                                                  |                         
|12       |  | DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES     | N/A                     
|         |  |                                                                  |                         
|PART II  | 
|         |  |                                                                  |                         
|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                                    | 68-69                   
|         |  |                                                                  |                         
|16A      |  | AUDIT
      COMMITTEE FINANCIAL EXPERT                           | 64                      
|16B      |  | CODE
      OF ETHICS                                             | 70,
      73-74         
|16C      |  | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                     | 70,
      152-153       
|16D      |  | EXEMPTIONS
      FROM THE LISTING STANDARDS                      |                         
|         |  | FOR
      AUDIT COMMITTEES                                       | 67                      
|16E      |  | PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER               |                         
|         |  | AND
      AFFILIATED PURCHASERS                                  | 193-194                 
|         |  |                                                                  |                         
|PART III | 
|         |  |                                                                  |                         
|17       |  | FINANCIAL
      STATEMENTS                                       | N/A                     
|         |  |                                                                  |                         
|18       |  | FINANCIAL
      STATEMENTS                                       | 110-184                 
|         |  |                                                                  |                         
|19       |  | EXHIBITS                                                         | Filed
      with the SEC

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      and Form 20-F
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        Annual Report and Form 20-F |  | 219
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|220 |  | 2005 Annual Report
      and Form 20-F
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Item
19:EXHIBITS

|1.1  | Articles
      of Association of TNT N.V., as amended (English translation).                                           
|---- | -----------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                        
|2.1  | Deposit
      Agreement dated 15 June 1998, among TNT Post Group N.V., Citibank N.A.,
      as Depositary,             
|     | and all
      registered holders and beneficial owners from time to time of ADRs.1                                     
|     |                                                                                                                        
|2.2  | Form of
      American Depositary Receipt (included in Exhibit 2.1).                                                   
|     |                                                                                                                        
|2.3  | Fiscal Agency
      Agreement dated 29 November 2001, between TPG N.V. and ING Bank N.V., as                           
|     | Fiscal Agent
      and Paying Agent.2                                                                                  
|     |                                                                                                                        
|4.1  | Letter Agreement
      dated 23 June 1998, between the State of the Netherlands and TNT Post Group
      N.V.          
|     | (English
      translation).3                                                                                          
|     |                                                                                                                        
|4.2  | Letter Agreement
      dated 9 March 2001, between TNT Post Group N.V. and the State Secretary
      of Transport,     
|     | Public Works
      and Water Management, on behalf of the State of the Netherlands (English
      translation).4       
|     |                                                                                                                        
|4.3  | Employment
      Agreement of M.P. Bakker.5                                                                            
|     |                                                                                                                        
|4.4  | Employment
      Agreement of J.G. Haars.6                                                                             
|     |                                                                                                                        
|4.5  | Employment
      Agreement of H.M. Koorstra.7                                                                          
|     |                                                                                                                        
|4.6  | Employment
      Agreement of D.G. Kulik.                                                                              
|     |                                                                                                                        
|4.7  | Employment
      Agreement of M.C. Lombard.                                                                            
|     |                                                                                                                        
|4.8  | Participation
      Agreement dated 20 December 2002 between TNT Post Groep N.V. and the Stichting                     
|     | Pensioenfonds
      TNT Post Groep (English summary of Dutch agreement).8                                              
|     |                                                                                                                        
|4.9  | Fiat Spare
      Parts Renewal agreement dated 19 February 2004 between TNT Automotive Logistics
      S.p.A and       
|     | Fiat Auto
      S.p.A. (English translation of Italian agreement)/.9                                                   
|     |                                                                                                                        
|8.1  | Significant
      subsidiaries (see chapter 14  Additional information).                                            
|     |                                                                                                                        
|11.1 | Code of
      ethics for senior financial officers (see TNT Business Principles,
      chapter 8                    
|     | Business
      Principles and social responsibility).                                                                
|     |                                                                                                                        
|12.1 | Certification
      by Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act
      of 2002.           
|     |                                                                                                                        
|12.2 | Certification
      by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.        
|     |                                                                                                                        
|13.1 | Certification
      by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section
|     | 906
      of the Sarbanes-Oxley Act of 2002.                                                                           
|     |                                                                                                                        
|13.2 | Certification
      by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section
|     | 906
      of the Sarbanes-Oxley Act of 2002.                                                                           
|     |                                                                                                                        
|15.1 | Consent
      of Independent Registered Public Accounting Firm                                                         

|                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------
|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 4.1 to our annual report on Form 20-F filed with
      the SEC on 13 March 2001.               
|4Incorporated
      by reference to our Form 6-K furnished to the SEC on 15 March 2001.                                                    
|5Incorporated
      by reference to Exhibit 4.3 to our annual report on Form 20-F filed with
      the SEC on 31 March 2004.               
|6Incorporated
      by reference to Exhibit 4.4 to our annual report on Form 20-F filed with
      the SEC on 31 March 2001.               
|7Incorporated
      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.
|8Incorporated
      by reference to Exhibit 4.4 to our annual report on Form 20-F filed with
      the SEC on 21 February 2003.            
|9Incorporated
      by reference to Exhibit 4.9 to our annual report on Form 20-F filed with
      the SEC on 31 March 2004.               

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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 2006

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Exhibit
  1.1





ARTICLES
OF ASSOCIATION of

TNT
N.V.,

(formerly
named: TPG N.V.)having its official seat in Amsterdam.

11
April 2005





Office
translation of the complete text of the Articles of Association of TNT N.V.(formerly
named: TPG N.V.),
having its official seat in Amsterdam, as they read after the deed of amendment
executed on 11 April 2005 before G.W.Ch. Visser, civil law notary in Amsterdam,
in respect of which a ministerial Statement of No objections was granted on 9
April 2005, 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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| | 1
| | -



CHAPTERI Definitions. Article1.

In these articles of association
the following terms shall have the meanings as assigned below:

|a. | general
      meeting: the body formed by shareholders with voting rights andothers holding voting rights;                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|b. | general meeting
      of shareholders: the meeting of shareholders and other persons entitled
      to attend meetings;                                                                                  
|c. | depositary receipts:
      depositary receipts for shares in the company;                                                                                                                                
|d. | distributable part
      of the shareholders' equity: that part of the shareholders' equity which
      exceeds the paid and called capital plus the reserves which are required
      to be held by law;
|e. | auditor: a "registeraccountant"
      or other auditor referred to in section 393 of Book 2 of the Netherlands
      Civil Code or an organisation in which such auditors work together;                 
|f. | the annual meeting:
      the general meeting of shareholders convened to consider the financial statements
      and annual report;                                                                     
|g. | subsidiary:                                                                                                                                                                                              

| | -                                                                                                                                                                                            | a legal entity in which
the company or one or more of its subsidiaries, pursuant to an agreement with
other persons entitled to vote or otherwise, can exercise, solely or jointly,
more than one-half of thevoting rights at the general meeting of members or shareholders
of that legal entity;                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | -                                                                                                                                                                                            | a legal
      entity of which the company or one or more of its subsidiaries is a
      member or shareholder and, pursuant to an agreement with other persons entitled
      to vote or otherwise, can appoint or dismiss, solely or jointly, more than
      one-half of the members of the Board of Management or the Supervisory Board,
      if all persons entitled to vote were to cast their vote;
| | all
this subject to the provisions of paragraphs 3 and 4 of section 24a of Book 2
of the Netherlands Civil Code.                                                                            
| | A
company operating under its own name, for the debts of which the company or one
or more subsidiaries is fully liable as a partner towards its creditors, shall
be treated as a subsidiary;

|h. | group
company: a legal entity or company within the meaning of section 24b of Book 2
of the Netherlands Civil Code which is united with the company in one group;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|i. | dependent
company:                                                                                                                                               

| | - | a legal person to which
the company or one or more dependent companies, solely or jointly and for its
or their own account, contribute(s) at least one-half of the issued capital;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 2
| | -





| | - | 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. | Rules relating
      to Securities (Fondsenreglement): the Rules relating to Securities
      on the stock exchange maintained by Euronext Amsterdam N.V.;                                                                                                                   
|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 (Wetgiraal
      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 (aangesloteninstelling)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.                                                   

CHAPTERII Name,
registered office, structure and object.
Article 2. Name
and seat.

|1 | . | The
name of the company is: TNT N.V.               
|- | - | ---------------------------------------------------
|2 | . | The
company has its registered office in Amsterdam.

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. | to
participate in and to manage other enterprises and companies, among such, companies
that operate in the field of the transportation, distribution and delivery of
letters, messages, parcels and goods, as well as the storing,
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 3
| | -



|   | 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 conductive 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 one billion one hundred fifty-two million euros (EUR
      1,152,000,000).                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The authorised
      capital is divided into two billion four hundred million (2,400,000,000)
      shares of forty-eight eurocents (EUR 0.48) each, namely:

| | a. | 1,200,000,000 | one billion two
      hundred million ordinary shares;                                                                     
| | -- | ------------- | ---------------------------------------------------------------------------------------------------------------------------
| | b. | 1             | one
special share;                                                                                                         
| | c. | 1,199,999,999 | one
billion one 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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| | 4
| | -



| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Article7. Has been cancelled.



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Article8. Has been cancelled.

Article9. Has been cancelled.

Article
10. Depositary receipts for shares.

|1. | .The
      company may cooperate towards the issue of depositary receipts for its shares.                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | If
      such an issue has been effected, the holders of the depositary receipts
      shall have the rights conferred by law upon the holders of depositary receipts,
      among which:
|   | a.                                                                                                                                                                                       
|   | b.                                                                                                                                                                                       

Article
11. Registers for shareholders.

|1. | No
      share certificates shall be issued for the ordinary registered shares, for
      the special share and for the preference shares B.                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      Board of Management shall keep a register in which are entered the names
      and addresses of all holders of the special share and the ordinary registered
      shares, indicating the class of shares.                                                 
|3. | The
      Board of Management shall also keep a separate register in which are entered
      the names and addresses of all holders of preference shares B.                                                                                                          
|4. | Each
      holder of one or more registered shares and each person holding a right
      of usufruct or pledge on one or more of such shares is obliged to notify
      the company in writing of his address.                                                       
|5. | All
      entries and notes in a register shall be signed by a member of the Board
      of Management and by a member of the Supervisory Board, or by a person authorised
      thereto by the Board of Management with the approval of the Supervisory
      Board.
|6. | Section
      85 of Book 2 of the Netherlands Civil Code shall also be applicable to the
      registers.                                                                                                                                                            
|7. | Extracts
      from a register shall be non-negotiable.                                                                                                                                                                                                              

CHAPTER IV Issue of shares. Article 12. Competent
  body.

|1. | Shares
      shall be issued pursuant to 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 scope of authority of the Board of
      Management shall be determined by a resolution of the general meeting of
      shareholders and relate at most to all unissued shares of the authorised
      capital, as applicable now or at any time in the future. The duration of
      this authority
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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.                                                                                                                       

CHAPTERV 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. | the
      distributable part of the shareholders' equity is at least equal to the
      purchase price, and                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | the nominal value
      of the shares in its capital or depositary receipts therefor which the company
      acquires, holds or holds as pledgee or which are held by a subsidiary company
      does not exceed one-tenth of the issued capital.

|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 without subject to the approval of the holder of the special share;
      all 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. | by
      a cancellation of shares; or                                   
| | -- | ------------------------------------------------------------------------
| | b. | by a reduction
      of the nominal amount of the shares by amendment of

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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. | in
      respect of all shares; or                                 
| | -- | -------------------------------------------------------------------
| | b. | in respect of all
      preference shares B or all ordinary shares.

|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 adeed
      of transfer drawn up for that purpose and, save when the companyitself
      is a party to the legal act, acknowledgement in writing by the companyof
      the transfer.Acknowledgement must be given in the instrument or by a dated statementembodying
      such acknowledgement on the instrument or on a copy or extractthereof
      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 asacknowledgement. If the transfer relates to preference shares B which havenot been paid up in full, the acknowledgement may be given only if theinstrument
      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. | The shareholder
      shall have the right to vote on shares subject to a usufructor
      pledge. The usufructuary or the pledgee shall, however, have the right tovote if so
      provided upon the establishment of the usufruct or pledge. Ashareholder without the right to vote and a usufructuary or a pledgee withthe right
      to vote shall have the rights conferred by law upon the holders ofdepositary receipts issued for shares with the cooperation of a company.
      Ausufructuary
      or pledgee without the right to vote shall not have the rightsreferred
      to in the preceding sentence.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The shareholder
      shall have the rights attaching to the share on which ausufruct has been established with respect to the acquisition of shares,provided that
      he shall compensate the usufructuary for the value of theserights
      to the extent that the latter is entitled thereto under his right ofusufruct.                                                                                                                                                                                                                                                                                            

CHAPTER VIII Management. Article 20. Board
  of Management.

|1. | The
      management of the company shall be formedbya
      Board ofManagement
      consisting of a number of membersto
      be determined by theSupervisory Board at three or more members.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      Supervisory Board shall appoint a chairman from among the membersof the Board of Management.                                                                                         

Article
21. Appointment, suspension and dismissal.

|1. | The SupervisoryBoard shall
      appoint the members of the Board ofManagement. Itshall notify the general meeting of an intendedappointment.                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      SupervisoryBoard shall not dismiss a member of the Board ofManagement
      until the general meeting has been consulted on the intendeddismissal. The Supervisory Board shall permit the member of the Board ofManagement
      whoit intends
      to dismiss, to be heard before the general



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| | meeting regarding
      the intended dismissal.
| | -----------------------------------------------

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

Article
22. Remuneration.

|1. | The
      company has a policy on the remuneration of the Board ofManagement.
      The policy shall be proposed by the Supervisory Board andadopted
      by the general meeting. The policy on remuneration shall in anycase
      include the subjects referred to in sections 383c, 383d and 383e ofBook
      2 of the Netherlands Civil Code insofar as they regard issues related tothe Board
      of Management.                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The remuneration
      and further terms of employment of the Board ofManagement
      shall be determined by the Supervisory Board, with dueobservance of the policy referred to in paragraph 1.                                                                                                                                                                                                                                                                                    
|3. | If the remuneration
      of the Board of Management also consists of schemesunder which shares or rights to subscribe for shares are granted, theSupervisory
      Board shall submit a proposal in respect of these schemes to thegeneral
      meeting for approval. The proposal must as a minimum state thenumber
      of shares or rights to subscribe for shares that can be granted to theBoard
      of Management and the conditions for the granting and amendingthereof.

Article
23. Management duties. Decision-making. Allocation of tasks.

|1. | Subject to the
      restrictions imposed by the articles of association, the Boardof
      Management shall be charged with the management of the company.                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      Board of Management shall resolve with an absolute voting majority. Inthe
      event the votes are equally divided, the chairman of the Board ofManagement
      shall have a casting vote.                                                                                
|3. | The
      Board of Management shall draw up by-laws containing furtherregulations
      on the procedure of holding meetings and decision-making bythe
      Board of Management, and its operating procedures. Such by-laws shallrequire
      the approval of the Supervisory Board.
|4. | In allocating its
      duties, the Board of Management may determine the tasksfor
      which each member of the Board of Management bears specialresponsibility.
      The allocation of tasks shall require the approval of theSupervisory Board.                                  

Article
24. Representation.



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|1. | TheBoardofManagementrepresentsthecompany.Representativeauthority
      shall also vest in:
|-- | ------------------------------------------------------------------------------------------

| | a. | the
      chairman of the Board of Management, or                  
| | -- | -------------------------------------------------------------------
| | b. | two
      other members of the Board of Management, acting jointly.

|2. | The Board of Management
      may appoint officers with general or restrictedpower
      to represent the company. Any such appointment may be withdrawnat any time. All such officers shall represent the company with dueobservance
      of the restrictions imposed on their powers. Their titles shall bedetermined
      by the Board of Management.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | In the event of
      a conflict of interest between the company and a member ofthe
      Board of Management, the company shall be represented by a memberof the Board of Management or a member of the Supervisory Boardappointed
      by the Supervisory Board for this purpose.                                                                      

Article 25. Approval
of resolutions of the Board of Management.

|1. | Resolutions
      of the Board of Management entailing a significant change inthe
      identity or character of the company or its business are subject to theapproval of
      the general meeting, including in any case:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a. | the
      transfer of (nearly) the entire business of the company to a third party;                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | entering
      into or breaking off long-term co-operation of the companyor
      a subsidiary with an other legal entity or company or as fully liablepartner
      in a limited partnership or general partnership, if this co-operation
      or termination is of major significance for the company;                                                                                                                                                          
| | c. | acquiring
      or disposing of participating interests in the capital of acompany at a value of at least one third of the sum of the assets of thecompany as
      shown on its balance sheet plus explanatory notes or, ifthe
      company prepares a consolidated balance sheet, as shown on itsconsolidated
      balance sheet plus explanatory notes, according to thelast
      adopted financial statements of the company, by the company or asubsidiary.

|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. | resolutions
      of the Board of Management relating to:
| | -- | ---------------------------------------------------------

| | a. | the
      issue and acquisition of shares of the company and debt instruments issued
      by the company or of debt instruments issued by a limited partnership (commanditairevennootschap)or a general partnership (vennootschap onder firma) in respect of
      which the company is a general partner with full liability;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | cooperation
      in the issue of depositary receipts for shares in thecompany;                                                                                                                                                                                                                                                
| | c. | application
      for listing or withdrawal of listing on any stockexchange of the securities referred to under a. and b.;                                                                                                                                                                                                     

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| | d. | the
      entering into or termination of long-term cooperation of thecompany
      or a dependent company with any other company orlegal
      entity or as fully liable partner in a limited partnership orgeneral
      partnership if such cooperation or termination is offundamental importance to the company;          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | e. | the
      acquisition of a participation worth at least a quarter of thevalue
      of the issued capital plus reserves according to thecompany's balance sheet plus explanatory notes, by thecompany or a dependent company in the capital of anothercompany, and any substantial increase or decrease of such aparticipation;
| | f. | investments requiring
      an amount equal to at least a quarter ofthe
      company's issued capital plus reserves according to itsbalance
      sheet plus explanatory notes;                                                                                                                                               
| | g. | a proposal to amend
      the articles of association;                                                                                                                                                                                                                                                                         
| | h. | a proposal to dissolve
      the company;                                                                                                                                                                                                                                                                                      
| | i. | a petition for
      bankruptcy (faillissement) or a request for suspension of payments
      (surséance van betaling);                                                                                                                                                                                                        
| | j. | the termination
      of the employment of a considerable number of the company's employees or
      of a dependent company's employees simultaneously or within a short period
      of time;                                                                                                                                 
| | k. | a significant change
      in the employment conditions of a considerable number of the company's employees
      or of a dependent company's employees;                                                                                                                                                                       
| | l. | a proposal to reduce
      the issued capital of the company;                                                                                                                                                                                                                                                                  

| | B. | -
      insofar not already subject to A mentioned hereinabove-
      theresolutions
      of the Board of Management, against which the chairmanhas
      cast his vote in the voting of the Board of Management.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | a. | to
      exercise the right to vote on shares in Koninklijke TPG Post B.V. or another
      legal entity within the meaning of section 4, paragraph 1 of the Netherlands
      Postal Act (Postwet) with respect to a proposal to issue shares by
      the legal entity involved, if this issue of shares shall result in the legal
      entity no longer meeting that what is provided for in section 4, paragraph
      1 sub c. of the Netherlands Postal Act;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | to sell shares
      in Koninklijke TPG Post B.V. or another legal entitywithin
      the meaning of section 4, paragraph 1 of the Netherlands PostalAct, if the selling shall result in the legal entity no longer meeting thatwhat is provided
      for in section 4, paragraph 1 under c. of theNetherlands Postal Act.                                                                                                                                        

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| | For the application
      of what is provided for in this sub-paragraph, grantingapproval for resolutions of a Board of Management of a legal entity referredto in a. or
      b. of this sub-paragraph to vote on shares in the capital of anotherlegal
      entity referred to in section 4, paragraph 1 of the Netherlands PostalAct which are held by the former legal entity, shall be equated with votingon shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | Without
      prejudice to the provisions of paragraphs 1 up to and including 3 ofthis article, the approval of both the Supervisory Board and the holder
      of thespecial
      share shall be required for resolutions of the Board of Management:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a. | to
      exercise the right to vote on shares in Koninklijke TPG Post B.V. or another
      legal entity as mentioned in section 4, paragraph 1 of the Netherlands Postal
      Act with respect to a proposal to:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | dissolve the company
      involved,                                                                                                                                                                             
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | a merger (fusie)
      or demerger (splitsing), within the meaning of Part 7 of Book 2 of
      the Netherlands Civil Code of the legal entity involved,                                                         
| | - | acquisition of
      its own shares by the legal entity involved,                                                                                                                                                
| | - | amendment
      of the articles of association of the legal entity involved relating
      to the competence of its general meeting concerning the subjects referred
      to herein above in this sub-paragraph.

| | For the application
      of what is provided for in this sub-paragraph,granting approval for resolutions of a Board of Management of a legalentity referred to in the opening words of this sub-paragraph to vote onshares in
      the capital of another legal entity referred to in the openingwords
      of this sub-paragraph which are held by the former legal entity,shall
      be equated with voting on shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b. | to
      make capital expenditures which would reduce the shareholders' equity of
      the company below fifteen percent (15%) of the total capital according to
      its consolidated balance sheet.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The
      Supervisory Board may require other resolutions of the Board ofManagement than those specified in paragraphs 2, 3 and 4, to be subject
      toits approval.
      The Board of Management shall be notified in writing of suchresolutions,
      which shall be clearly specified.                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The
      lack of approval of the general meeting for a resolution as referred to
      inparagraph
      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 5shall
      not affect the authority of the Board of Management and its members torepresent
      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. | The company shall
      have a Supervisory Board consisting of natural personsonly.
      The Supervisory Board shall have at least seven and at most twelvemembers.
      If there are fewer than seven members of the Supervisory Board,the
      Board shall proceed without delay to fill up its number of members.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      number of members of the Supervisory Board shall be determined bythe
      Supervisory Board, with due observance of the provisions of paragraph1.                                                                                                                                                           
|3. | The
      Supervisory Board adopts a profile on its size and composition, takinginto
      account the character of the business, its activities and the desiredexpertise
      and background of the members of the Supervisory Board.                                                                                
|4. | The
      position of a member of the Supervisory Board may not be held by:                                                                                                                                                                                                                                            

| | a. | persons
      employed by the company;                                                                                                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | persons employed
      by a dependent company;                                                                                                                                      
| | c. | officers
      and persons employed by an employees'organisationcustomarily
      involved in the establishment of the terms of employmentof the persons referred to under a. and b.



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

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



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| | objects to the
      recommendation because it suspects that the recommendedperson shall be unsuitable for the exercise of the duties of a member of
      theSupervisory
      Board or that the Supervisory Board shall not be composedproperly in case of appointment in accordance with the recommendation. Ifthe number
      of members of the Supervisory Board cannot be divided bythree,
      the closest lower number that can be divided by three shall be takeninto
      account in order to establish the number of members of the SupervisoryBoard for which the stronger right of recommendation applies.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | A
      recommendation or nomination as referred to above in this article shallstate the
      candidate's age, his profession, the number of the shares he holds inthe
      capital of the Company and the positions he holds or has held, in so faras these are relevant for the performance of the duties of a member of theSupervisory
      Board. Furthermore, the names of the legal entities of which heis
      already a member of the Supervisory Board shall be indicated; if thoseinclude
      legal entities which belong to the same group, a reference to thatgroup will be sufficient. The recommendation and nomination to appoint orre-appoint must be accounted for. In case of re-appointment, theperformance in the past period of the candidate as a member of theSupervisory
      Board shall be taken into account.                                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | If
      the Supervisory Board objects to a recommendation as referred to inparagraph
      3, it shall inform the central works council of its objection, statingthe
      reasons. The Supervisory Board shall forthwith enter into consultationwith
      the central works council in order to reach agreement on thenomination.
      If the Supervisory Board establishes that no agreement can bereached,
      a representative of the Supervisory Board designated for thatpurpose
      shall request the Commercial Division of the Amsterdam Court ofAppeal
      to declare the objection well-founded. The request shall not be filedbefore
      the lapse of four weeks after the consultation with the central workscouncil started. The Supervisory Board shall put the recommended personon the nomination
      if the Commercial Division declares the objectionunfounded.
      If the Commercial Division declares the objection well-founded,the
      central works council can make a new recommendation in accordancewith 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. Ifthe
      general meeting resolves to reject the nomination by an absolutemajority,
      while this majority does not represent at least one third of theissued
      capital, a new meeting will be convened where the nomination can berejected
      by an absolute majority of the votes cast. The Supervisory Boardshall
      then prepare a new nomination. Paragraphs 2 up to and including 5shall
      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 workscouncil, this is understood to mean the central works council as referred
      toin 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 Codeshall 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 fordiscussion:                                                                                                                                                                                                  

| | a. | notice
      of the time at which a vacancy will arise and the reason for itsoccurrence
      and in accordance with what profile the vacancy must befilled;                                                   
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | opportunity for
      the general meeting to make a recommendation;                                                                                                                                            
| | c. | on
      the condition precedent that no recommendation for another personshall be made by the general meeting: the announcement by theSupervisory
      Board of the name of the person it wishes to nominate;
| | d. | on
      the condition precedent that no recommendation for another personshall
      be made by the general meeting: proposal to appoint theproposed
      person.                                            

|11. | The
      name of the person whom the Supervisory Board wishes to nominateand
      the information as referred to in paragraph 4 shall be stated in theconvocation
      of the general meeting of shareholders or in an agenda which ismade
      available at the company's office for inspection, in which case theconvocation shall refer to this agenda.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12  | The convocation
      of this meeting may not take place until it is certain:                                                                                                                                                                                                                                                                                 

| | a. | that
      the central works council has either made a recommendation asreferred
      to in paragraph 2 or, when applicable, - paragraph 3, or hasgiven
      notice that it shall not make such recommendation, or that areasonable period of time in which to make a recommendation asdetermined
      by the Supervisory Board, has lapsed; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | if
      the central works council made a recommendation as referred to inparagraph
      3 or, - where applicable - in paragraph 5, the SupervisoryBoard
      has nominated the recommended person.                                                                                                                                              



Article
29. Retirement. Suspension. Dismissal.

|1. | A
      member of the Supervisory Board shall resign no later than at the time ofclosure of the general meeting following the day four years after his lastappointment
      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 inaccordance
      with a rotation plan to be drawn up by the Supervisory Board.An alteration to the rotation plan cannot imply that an incumbent member
      ofthe Supervisory
      Board shall resign against his will before the period forwhich
      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
      ('hetvertrouwen
      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 theBoard of Management
      has notified the central works council of theproposed
      resolution and the reasons therefore. The notification shall bemade
      at least thirty days before the general meeting of shareholders is heldat which the proposal is discussed. If the central works council defines
      aposition
      on the proposal, the Board of Management shall inform theSupervisory Board and the general meeting thereof. The central workscouncil
      can have its position explained in the general meeting ofshareholders.
|5. | The
      resolution referred to in paragraph 3 shall result in the immediateresignation
      of the members of the Supervisory Board. In that case the Boardof
      Management shall forthwith request the Commercial Division of theAmsterdam
      Court of Appeal to temporarily appoint one or more members ofthe
      Supervisory Board. The Commercial Division shall determine theconsequences
      of the appointment.                                                                                                                                                                                                     
|6. | The
      Supervisory Board shall take action to the effect that, within the termstated by the Commercial Division, a new Supervisory Board is constitutedin 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 ofthe Board
      of Management and the general course of affairs of the companyand
      the enterprise connected therewith. It shall assist the Board ofManagement with advice. In the performance of their duties the members ofthe 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 goodtime
      with the information necessary for the performance of its duties.                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | At
      least once a year, the Board of Management shall inform the SupervisoryBoard of the
      main aspects of the strategic policy, the general and financialrisks
      and the company's management and auditing systems in writing.                                                                                                                                                                                                 
|4. | The
      Supervisory Board shall have access to the company's buildings andpremises
      and shall be entitled to inspect the company's books anddocuments.
      The Supervisory Board may appoint one or more persons fromamong
      its number or an expert to exercise these powers. The SupervisoryBoard
      may also otherwise call upon the assistance of experts. The costs ofsuch
      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 avice-chairman who shall substitute for the former in his absence. The boardshall appoint
      a secretary from among its midst or from outside and shallmake a provision for the substitution of the secretary.                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | In
      the absence of the chairman and the vice-chairman at a meeting, themeeting itself shall designate a chairman.                                                                                                                                                                                                                                                                                                                                                                     
|3. | The
      Supervisory Board shall meet whenever the chairman, or two othermembers
      of the Supervisory Board, or the Board of Management sorequests.                                                                                                                                                                                                                                                                                                                                   
|4. | Minutes
      shall be kept by the secretary of the proceedings of meetings of theSupervisory Board. The minutes shall be adopted by the Supervisory Boardat the same meeting or at a subsequent meeting.                                                                                                                                                                                                                                                                                  
|5. | All
      resolutions of the Supervisory Board shall be passed by absolutemajority
      of the votes cast.                                                                                                                                                                                                                                                                                                                                                                                
|6. | The
      Supervisory Board may only pass valid resolutions at a meeting if themajority
      of the members of the Supervisory Board are present orrepresented
      at the meeting.                                                                                                                                                                                                                                                                                                      
|7. | A
      member of the Supervisory Board may have himself represented by afellow
      member holding a written proxy. By 'written proxy' shall beunderstood
      a proxy transmitted by any accepted means of communicationand
      received in writing. A member of the Supervisory Board may not act asproxy
      on behalf of more than one fellow member of the Supervisory Board.                                                                                                  
|8. | The
      Supervisory Board may also adopt resolutions without holding ameeting,
      provided the proposal in question has been submitted to allmembers
      of the Supervisory Board and none has objected to this form ofdecision-making.A report shall be drawn up by the secretary of a resolution adopted in thisway, enclosing the replies received, and shall be signed by the chairman
      andthe secretary.
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| | Board, this form
      of decision-making shall be stated.
| | ----------------------------------------------------------

|9.  | The
      Supervisory Board shall meet together with the Board of Managementwhenever the Supervisory Board or the Board of Management so requests.                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | The
      Supervisory Board shall draw up by-laws containing further regulationson
      the procedure for holding meetings and decision-making by theSupervisory
      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 havethe responsibilities
      specified by the Supervisory Board.
|12. | The
      composition of any such committee shall be determined by theSupervisory
      Board.                                                                                                                  
|13. | The
      general meeting may additionally remunerate the members of thecommittee(s)
      for their services.                                                                                                  

Article
33. Indemnity.

|1. | The
      company shall indemnify and hold harmless each member of the Boardof Management and each member of the Supervisory Board (each of them,for
      the purpose of this article 33 only, the "Director") against any and allliabilities,
      claims, judgements, fines and penalties (the "Claims"), incurredby
      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 itsgroup
      companies, in relation to acts or omissions in or related to hiscapacity
      as a Director. Claims will include derivative actions brought onbehalf of the company or its group companies against the Director andclaims
      by the company (or one of its group companies) itself forreimbursement for claims by third parties on the ground that the Directorwas 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 anyAction, shall be reimbursed by the company, but only upon receipt of awritten undertaking by that Director that he shall repay such Expenses if
      acompetent
      Court should determine that he is not entitled to be indemnified.Expenses
      shall be deemed to include any tax liability which the Directormay be subject to as a result of his indemnification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4. | Also
      in case of an Action against the Director by the company itself or itsgroup
      companies, the company will advance to the Director his reasonableattorneys'
      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 acompetent Court should resolve the Action in favour of the company ratherthan the Director.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The
      Director shall not admit any personal financial liability vis-à-vis
      thirdparties,
      nor enter into any settlement agreement, without the company'sprior
      written authorisation. The company and the Director shall use allreasonable
      endeavours to cooperate with a view to agreeing on the defenceof any Claims but in the event that the company and the Director would failto reach such agreement, the Director shall comply with all directions givenby the company
      in its sole discretion.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The
      indemnity contemplated by this article 33 shall not apply to the extentClaims and Expenses are reimbursed by insurers.                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | In
      case of amendment of this article 33, the indemnity provided therebyshall
      nevertheless continue to apply to Claims and/or Expenses incurred inrelation
      to the acts or omissions by the Director during the periods in whichthis clause was in effect.                                                                                                                                                                                                                                                           

CHAPTERX 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 wherethis period is extended by a maximum of six months by the general meetingon account
      of special circumstances, the Board of Management shallprepare
      the financial statements and shall lay them open for inspection bythe
      shareholders at the office of the company. Within that period the Boardof Management shall also present the annual report.                                                                                                             
|3. | Within the period
      referred to in paragraph 2, the Board of Management shallsend
      the financial statements to the central works council as well.                                                                                                                                                                                                                                                                                                                                                                                                           
|4. | The
      financial statements shall be signed by the members of the Board ofManagement and of the Supervisory Board. If the signature of one or moreof them is
      missing, this shall be stated and reasons shall be given.                                                                                                                                                                                                                                                                                                                                      
|5. | Annually,
      the Supervisory Board shall prepare a report, that shall be addedto the financial statements and the annual report. The provisions ofparagraphs
      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 thefinancial
      statements is passed, a proposal to release the members of theBoard
      of Management from liability for the exercise of the management anda
      proposal to release the members of the Supervisory Board from liabilityfor the exercise
      of the supervision of the management, insofar as theexercise
      of such duties is reflected in the financial statements or otherwisedisclosed
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| | statements,
      shall be brought up for discussion as two separate items. Thescope of a release from liability shall be subject to limitations by virtue
      ofthe law.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Sections
      101, 102 and 103 and Part 9 of Book 2 of the Netherlands CivilCode
      shall also be applicable to the financial statements and the annualreport.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

Article
35. Dividends. Reservations.

|1. | Out
      of the profit - the credit balance of the profit and loss account - earned
      in the past financial year shall first be paid, if possible, a dividend
      on the special share of seven percent (7%) of the nominal value of that
      share, and a dividend on the preference shares B of a percentage equal to
      the average twelve 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, depending on the prevailing market conditions. In the
      event the relevant preference shares B are issued in the course of a financial
      year the dividend shall be calculated as a proportion of the time lapsed.
      If at any time the twelve monthly EURIBOR is no longer fixed, the dividend
      percentage shall be equal to the arithmetic mean of the average effective
      yields of the five longest-dated state loans, as calculated by the Central
      Bureau of Statistics (Centraal Bureau voor de Statistiek) and published
      in the Official Price List, over the last twenty stock-exchange business
      days before the date of issue, plus a premium, to be determined by the Board
      of Management and subject to the approval of the Supervisory Board, of at
      least one-quarter of a percentage point and at most one percentage point,
      depending on the prevailing market conditions. If the distribution on the
      preference shares B for any financial year as referred to in the preceding
      paragraph cannot be made or cannot be made in full because the profit does
      not permit it, the deficit shall be distributed as a charge to the distributable
      part of the shareholders' equity. The dividend on preference shares B shall
      be calculated on the paid-up part of the nominal value.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      Board of Management shall then subject to the approval of theSupervisory
      Board determine what part of the profit remaining after theapplication
      of paragraph 1 is to be appropriated to reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | The
      part of the profit remaining after the appropriation to reserves shall beat
      the disposal of the general meeting, except that no further distributionscan be made
      on the special share and on the preference shares B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4. | If
      a loss is sustained in any year, no dividend shall be distributed for thatyear. No dividend
      may be paid in subsequent years until the loss has beencompensated
      by profits. The general meeting may, however, resolve on aproposal
      of the Board of Management which has received the approval of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



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| | the
      Supervisory Board to compensate the loss out of the distributable part ofthe shareholders' equity or also to distribute a dividend out of thedistributable
      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 owncapital.
      For the computation of the profit distribution, the shares on whichaccording to this paragraph 6 no dividend shall be paid, shall not beincluded.
      The provisions laid down before in this paragraph 6 shall not beapplicable
      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 shallalso be applicable to distributions to shareholders.                                                                                                                                                                                                                                                                                                                                           

Article
36. Distributions in shares and distributions charged to the reserves.

|1. | The
      Board of Management may resolve that all or part of the dividend onordinary shares shall be paid in shares in the company instead of cash.
      Theresolution
      of the Board of Management thereto shall be subject to theapproval
      of the Supervisory Board and of the holder of the special share.                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      general meeting may resolve, on a proposal of the Board ofManagement which has received the approval of the Supervisory Board, andthe holder of the special share, to charge distributions to holders of ordinaryshares to the distributable part of the shareholders' equity. All or part
      ofthese distributions
      may also be paid in shares in the company instead ofcash.

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 endof the financial year.
|-- | ------------------------------------------------------------------------------------------------------
|2  | The
      agenda for that meeting shall include the following items:                                  

| | a. | the
      annual report;                                                                                                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | adoptions of the
      financial statements;                                                                                                                                                                          
| | c. | determination of
      dividend;                                                                                                                                                                                      
| | d. | release from liability
      of members of the Board of Management;                                                                                                                                                   
| | e. | release from liability
      of members of the Supervisory Board;                                                                                                                                                     
| | f. | if applicable,
      appointments of members of the Supervisory Board and notification of intended
      appointments of members of the Board of Management, and of expected vacancies
      in the Supervisory Board;
| | g. | any other proposals
      put forward by the Supervisory Board or the                                                                                                                                                 

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| | 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 SupervisoryBoard
      or the Board of Management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Notice
      convening a meeting shall be given no later than on the fifteenth dayprior
      to that of the meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | The
      notice convening a meeting shall state the subjects to be considered or
      itshall state
      that the shareholders may inspect the same at the office of thecompany,
      without prejudice to the provisions of section 99, paragraph 7 ofBook 2 of the Netherlands Civil Code, and article 47, paragraph 3.                                                                                                                                                                                                                                                                        
|4. | The
      notice convening a meeting shall state the requirements for admittanceto
      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 furtherannounced,
      subject to the time limit pertaining to the convocation ofmeetings,
      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
      in Amsterdam at an admitted establishment (toegelaten instelling)
      by Euronext Amsterdam N.V., to be designated in the notice convening the
      meeting or at another payment office as referred to in the Rules relating
      to Securities.
|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
      offifty million
      euros (EUR 50,000,000) according to the Official Price List,have the right to request to the Board of Management or the SupervisoryBoard to place items on the agenda of the general meeting of shareholders.These requests have to be honoured by the Board of Management or theSupervisory Board on the condition:a. that important company interests do not dictate otherwise; and                      



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| | b. | that
      the request is received by the Board of Management or thechairman
      of the Supervisory Board in writing, at least sixty daysbefore
      the date of the general meeting of shareholders.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | The
      term "shareholders" in this article shall include usufructuaries andpledgees
      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 chairmanof the Supervisory Board or, in his absence, by a vice-chairman of thatboard; in
      the event that the latter is (are) also absent, the members of theSupervisory 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 withparagraph
      1, the meeting itself shall appoint a chairman. Until that moment,a member of the Board of Management designated thereto by the Board ofManagement shall substitute as chairman.                                                                                                                                       

Article
43. Minutes.

|1. | Minutes
      shall be kept of the proceedings of each general meeting ofshareholders by a secretary appointed by the chairman. The minutes shallbe adopted
      by the chairman and the secretary and shall be signed by them inwitness
      thereof.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      Supervisory Board or the chairman may determine that a notarial recordshall be made of the proceedings of the meeting. Such a record shall be
      co-signed
      by the chairman.                                                          

Article
44. Rights to attend meetings. Admission.

|1. | Each
      shareholder who is entitled to vote and each usufructuary or pledgee ofshares in
      whom voting rights are vested shall be entitled to attend the generalmeeting
      of shareholders, to address the meeting and to exercise his votingrights.
      In the case of ordinary registered shares, the intention to attend themeeting must be notified to the Board of Management in writing. Suchnotification
      must be received by the Board of Management not later than onthe
      date stated in the notice convening the meeting.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      rights to take part in the meeting pursuant to paragraph 1 may beexercised by a person holding a written or electronic proxy, provided that
      inthe case
      of ordinary shares such proxy has been received by the Board ofManagement
      no later than on the date stated in the notice convening themeeting.                                                                                                                                                                                                                        
|3. | If
      the voting rights in respect of a share are vested in the usufructuary orpledgee instead
      of in the shareholder, the shareholder shall also be entitled to                                                                                                                                                                                                                                                                                                                                                                                 



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| | --



| | attend
      the general meeting of shareholders and to address the meeting, provided
      that in the case of ordinary registered shares the Board of Management has
      been notified of the shareholder's intention to attend the meeting in accordance
      with paragraph 1. Paragraph 2 shall be applicable mutatis
      mutandis.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | With
      respect to the voting rights and the right to participate in meetingsattached to ordinary bearer shares, the company shall apply by analogy theprovisions
      of Sections 88 and 89 of Book 2 of the Netherlands Civil Codeand
      recognise as a shareholder the person named in a written statement froma Necigef-participant as a Necigef-beneficiary, entitled to a given number
      ofordinary
      bearer shares belonging to such Necigef-participant's collectivedeposit
      of ordinary bearer shares in the company and remaining thus entitleduntil
      the close of the meeting.A holder of
      ordinary bearer shares or his proxy shall only have admittanceto
      the meeting if the foregoing statement has been deposited not later thanon the date
      stated in the notice convening the meeting at the placementioned
      therein. The receipt issued once such statement has beendeposited shall give admittance to the meeting. The foregoing provisions
      ofthis paragraph
      4 shall applymutatis
      mutandisto
      each pledgee orusufructuary of ordinary bearer shares in whom voting rights are vested
      ortheir proxy.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The
      Board of Management has the power to determine in the noticeconvening
      the meeting that for the application of section 117, paragraphs 1and
      2, of Book 2 of the Netherlands Civil Code, the persons that are entitledto attend
      and address meetings and to vote are the persons who have thoserights
      on a determined day ("date of registration") and are entered as such ina register (or one or more parts thereof) that has been designated for thatpurpose by the Board of Management, notwithstanding who is entitled tothose
      shares or depositary receipts at the time of the meeting. In this matterthe provisions of paragraphs 1 up to and including 4 also apply by analogyon the understanding that the statement of the Necigef-participant as referredto in paragraph 4 must show that on the relevant date of registration the
      personnamed
      in the statement was participant entitled to the number of sharesspecified
      in the statement.                                                                                                                                                                                   
|6. | The
      date stated in the notice convening the meeting as referred to inparagraphs
      1, 2, 4 and 5 shall not be earlier than the seventh day before thatof 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 ofManagement shall have an advisory vote at the general meeting ofshareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



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|10. | The
      chairman shall decide whether persons other than those who shall beadmitted
      in accordance with the above provisions of this article shall beadmitted
      to the meeting.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Article
45. Voting.

|1. | All
      resolutions for which no greater majority is required by law or thearticles
      of association shall be passed by an absolute majority of the votescast.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | If
      in an election of persons an absolute majority is not obtained, there shallbe a second
      free ballot.If again an absolute majority is not obtained, further ballots shall be
      helduntil
      either one person obtains an absolute majority or there is a tie in aballot
      between two persons.Such
      further voting (not including the second free ballot) shall be betweenthe
      persons voted upon in the preceding ballot with the exclusion of theperson
      obtaining the lowest number of votes in that preceding ballot. Ifmore
      than one person obtained the lowest number of votes in the precedingballot,
      lots shall be drawn to decide which of those persons is to withdrawfrom the next ballot. In the event of a tie in a ballot between two persons,lots shall
      be drawn to decide which of the two is elected.
|3. | In
      the event of a tie in a vote on matters other than the election of persons,the
      proposal shall be rejected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | All
      voting shall be oral. The chairman may, however, determine that votingshall be in writing. In the case of the election of persons, any person
      presentwho
      is entitled to vote may demand that voting shall be in writing. Voting inwriting shall take place by means of unsigned sealed ballot papers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | Abstentions
      and invalid votes shall be counted as not cast.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | Voting
      by acclamation shall be possible if none of the persons present andentitled to vote objects thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|7. | The
      provisions of sections 13 and 117 of Book 2 of the Netherlands CivilCode shall also apply to the general meeting of shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

CHAPTER XII Convocations and notifications.
  Article 46.

|1. | All
      notices convening general meetings of shareholders, all announcementsrelating
      to dividends and other distributions and all other notifications toshareholders shall be given by publication in a nationally distributed dailynewspaper and in the Official Price List, without prejudice to the provisionsof section 96a, paragraph 4 of Book 2 of the Netherlands Civil Code.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The
      expression "shareholders" in paragraph 1 shall include usufructuariesand pledgees in whom the voting rights on shares are vested as well as theholders of
      the depositary receipts for shares as referred to in article 10.                                                                                                                                                    
|3. | Notice
      convening general meetings of shareholders to the holder of the                                                                                                                                                                                                                                                                                                                  



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| | special
      share shall be given by means of a letter.
| | --------------------------------------------------------



CHAPTER XIII Amendment of the articles
  of association. Statutory merger. Statutory de-merger. Dissolution. Article 47. Amendment
  of the articles of association. Dissolution.

|1. | A
      resolution of the general meeting to amend the articles of association,
      tomerge or
      demerge within the meaning of Part 7 of Book 2 of theNetherlands
      Civil Code or to dissolve the company may only be adopted ona
      proposal of the Board of Management which is approved by theSupervisory Board.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | .The
      approval of the holder of the special share is required for:                                                                                                                                                                                                                                                         

| | a. | a
      resolution of the general meeting or of the Board of Management tomerge or demerge in the meaning ofPart 7 ofBook 2 of theNetherlands
      Civil Code;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | a resolution of
      the general meeting to dissolve the company;                                                                                             
| | c. | a
      resolution of the general meeting toamend
      thearticles
      ofassociation
      if the amendment concerns:                                       

| | - | article 4 (Object)
      insofar as it relates to carrying out the concessions or licenses,                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | article
      5 (Authorised capital, Classes of shares), if it relates to the
      creation of a new class of shares or profit sharingcertificates
      or other corporate rights which entitle to the result and/or
      capital of the company, or the cancellation of the special share
      or the preference shares B,
| | - | article 12 (Competent
      body), insofar as it relates to the approval of the holder of the special
      share,                                                                                                                                                                                                             
| | - | article 13 (Competence
      to restrict or exclude the pre-emptive right), insofar as it relates to
      the approval of the holder of the special share,                                                                                                                                                                    
| | - | article 15, paragraph
      3 (Acquisition of shares in the company's own capital), insofar as it relates
      to the approval of the holder of the special share,                                                                                                                                                            
| | - | article 17 (Transfer
      of the special share),                                                                                                                                                                                                                                                                              
| | - | article 25, paragraph
      4 (Approval of Board of Management resolutions), insofar as it relates to
      the approval of the holder of the special share,                                                                                                                                                                   
| | - | article 36 (Distribution
      in shares and distributions charged to the reserves), insofar as it relates
      to the approval of the holder of the special share,                                                                                                                                                           
| | - | in general: amendments
      which are prejudicial or detrimental to or incompatible with the statutory
      rights attached to the special share,                                                                                                                                                                            





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| | - | this second paragraph
      of article 47.
| | - | ------------------------------------------

|3. | If
      a proposal to amend the articles of association or to dissolve the companyis to be put
      to the general meeting, this must in all cases be stated in thenotice
      convening the general meeting of shareholders or announcedsubsequently
      as referred to in article 40, paragraph 6, and, in the case of anamendment
      to the articles of association, simultaneously a copy of theproposal
      including the verbatim text of the proposed amendment must bedeposited for inspection at the office of the company and must be madeavailable free of charge to shareholders and to the persons referred to
      inarticle
      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 thegeneral meeting,
      the members of the Board of Management shall be chargedwith the liquidation of the business of the company and the SupervisoryBoard with
      the supervision thereof.                                                                                                                                                                                                                                                                                                                                                                  
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | During
      liquidation the provisions of the articles of association shall remainin
      force as far as possible.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Out
      of the surplus remaining after settlement of the debts shall first bedistributed to the holders of the special share and the preference shares
      B thenominal
      amount paid up on these shares and any amount still owed by wayof dividend to which these shares entitle, insofar as this has not beendistributed
      in previous years. If the balance is not sufficient thereto, thedistribution shall be made in proportion to the amounts paid up on thoseshares. The
      remainder shall be distributed to the holders of ordinary sharesin
      proportion to the aggregate nominal value of their ordinary shares.
|4. | The
      liquidation shall otherwise be subject to the provisions of Part 1 ofBook 2 of the Netherlands Civil Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



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Exhibit
  4.6

EMPLOYMENT
  AGREEMENT



DATED
  15 December 2004



Between

TPG
  N.V.

And

Mr.
  David G. Kulik



ALLEN
  & OVERY

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|THE
      UNDERSIGNED:
|----------------------
|(1)                   
|AND                   
|(2)                   

|WHEREAS:
|--------
|(A)     
|(B)     
|(C)     
|(D)     

DECLARE TO HAVE AGREED
  AS FOLLOWS:

|1.  | DATE OF COMMENCEMENT
      OF EMPLOYMENT AND POSITION                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1 | The Executive enters
      into this Agreement with the Company in the position of member of the Board
      of Management with the personal title of Group Managing Director Logistics,
      effective as of 1 September 2003.                                                                                
|1.2 | The Executives
      place of employment will be the office of the Company in Hoofddorp. The
      Company will be entitled to change the place of employment after consultation
      with the Executive. In addition, the parties accept that the position entails
      considerable travelling.            
|1.3 | The Executive is obliged
      to do or to refrain from doing all that an officer in similar positions
      should do or should refrain from doing. The Executive shall fully devote
      himself, his time and his energy to promoting the interests of TPG. The
      Executive shall report to the TPG CEO.

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|1.4 | The Executive has
        the obligation which has been or will be imposed by law, by the articles
        of incorporation of the Company and in any Executive Board regulations
        as such regulations shall apply from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.  | DURATION OF THE
        AGREEMENT, NOTICE OF TERMINATION AND SEVERANCE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2.1 | This Agreement is
      entered into for a definite period of 4 (four) years. Accordingly, this
      Agreement will terminate by operation of law, without notice being required,
      on 31 August 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2.2 | Without prejudice
        to paragraph 1 of this article, this Agreement may be terminated during
        its term with due observance of a notice period of six (6) months for
        the Company and a notice period of three (3) months for the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2.3 | If, after expiry
        of the period referred to in paragraph 1 of this article, the Agreement
        is continued for a definite or an indefinite period upon the mutual agreement
        of the parties, the Agreement may be terminated by either party by giving
        notice with due observance of a notice period of six (6) months for the
        Company and a notice period of three (3) months for the Executive.                                                                                                                                                                                                                                                                                      
|2.4 | If the Company gives
        notice of termination of the Agreement as provided for in articles 2.2
        or 2.3, unless the Executive has given an urgent cause for such notice,
        or if the Company seeks court termination for serious grounds found in
        a change of circumstances as set forth in articles 7:685 par 1 Dutch Civil
        Code, a severance amount equal to one year base salary as defined in article
        3.1 will be made available to the Executive upon the effective date of
        termination. No severance amount shall be made available to the Executive
        if this Agreement terminates by its own terms, as mentioned in article
        2.1 of this Agreement.
|3.  | SALARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.1 | The Executives
        base salary, including holiday allowance, shall amount to EUR 100,000
        gross per year, which shall be paid in equal weekly installments at the
        end of each week as long as the salary is paid in the US and as adjusted
        to USD pursuant to the Letter of Understanding.                                                                                                                                                                                                                                                                                                                                                                                                   
|3.2 | In addition to the
        base salary as set out in article 3.1 of this Agreement, the Executive
        shall receive from TNT a base salary of EUR 500,000 gross per year, such
        salary to be paid in substantially equal weekly installments, pursuant
        to the U.S. Agreement and as adjusted to USD pursuant to the Letter of
        Understanding.                                                                                                                                                                                                                                                                                                                                                  
|3.3 | The Employer and
        the Executive will apply to the Netherlands Tax Office for permission
        to operate an untaxed allowance for extraterritorial expenses on the basis
        of the facility incorporated into the Dutch Wage Tax Act effective January
        1, 2001 (commonly known as the 30% facility). The Employer
        will not be held liable for any financial consequences should this qualification
        be refused or at any time be reversed.                                                                                                                                                                                                                                        
|3.4 | With respect to the
        application of the 30% facility, the following will be taken into account:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | (a) | If, and
      insofar, Executive is, based on article 9 of the Uitvoeringsbesluit
      loonbelasting 1965, entitled to receive a tax-free cost reimbursement
      for extraterritorial costs, it has been agreed with the Executive that his
      current employment income (loon uit tegenwoordige dienstbetrekking),
      will be reduced accordingly so that 100/70 of his current employment income
      equals the originally agreed current employment income.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b) | If, and
      insofar, article 3.3 of this Agreement is applicable, the Executive receives
      a cost reimbursement for extraterritorial costs from the Employer equal
      to 30/70 of the current employment income.                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | The Executive
      acknowledges the fact that an adjustment of the agreed remuneration of article
      3.3 of this Agreement can influence all employment income related payments
      and benefits like pension and social security benefits.
| | (d) | All cash
      bonus payments payable to Executive shall benefit from the application of
      this 30% facility, as long as and in so far as approved by the tax authorities.                                                                   

|4.  | SHORT
      TERM INCENTIVE BONUS PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1 | The short
      term incentive bonus plan for members of the Board of Management and the
      connected share matching plan (described in article 5.1 below) as established
      from time to time by the Supervisory Board, apply to the Executive. The
      short term incentive bonus plan is outlined in Appendix 1 to this Agreement.
      The bonus shall be paid 75% in cash and 25% in TPG ordinary shares (the
      "Bonus Shares"). All possible tax and social security consequences shall
      be for the account of the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5.  | BONUS/
      MATCHING PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5.1 | If at
      least 50% of the Bonus Shares allocated are held by the Executive for a
      period of three (3) years (calculated from the date said Bonus Shares are
      actually granted to the Executive), then the Company will match these Bonus
      Shares by granting additional shares on a 1:1 basis. The rules of the Bonus/Matching
      Plan, and its underlying regulations, as these are established from time
      to time by the Supervisory Board, apply to the Executive. Any and all possible
      tax and social security consequences related to the granting, vesting, exercise
      and/or sale of shares and Bonus Shares shall be for the account of the Executive.
      The Executive shall only sell his shares and Bonus Shares after consultation
      with the compliance officer and after the approval of the Chairman of the
      Supervisory Board. Any shares and Bonus Shares acquired by the Executive
      as a result of the Bonus/Matching Plan may only be sold if the Executive
      does not possess inside information at that moment. In addition, such shares
      and Bonus Shares may not be sold in a closed period. The TPG Code titled
      Voorkoming Misbruik Voorwetenschap (prevention of insider trading) applies
      to the Executive.
|6.  | LONG
      TERM INCENTIVE SHARE OPTION PLAN (a/k/a TPG GLOBAL SHAREOPTION PLAN AND
      U.S. COMPANY STOCK OPTION PLAN)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6.1 | The rules
      of the TPG Global Share Option Plan and U.S. Company Stock Option Plan of
      TPGN.V., and its underlying regulations and criteria for granting options,
      as these are established from time to time by the Supervisory Board, apply
      to the Executive. This share option plan is outlined in Appendix 2 to this
      Agreement. Any and all possible tax and social security consequences related
      to the granting, vesting, and/or exercise of share options shall be for
      the account of the Executive. The Executive shall only exercise his options
      after consultation with the compliance officer and after the approval of
      the Chairman of the Supervisory Board. Any shares acquired by the Executive
      as a result of exercising options 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 TPG Code titled Voorkoming Misbruik
      Voorwetenschap (prevention of insider trading) applies to the Executive.
      The parties have agreed that at the first possible opportunity in 2004 the
      Executive will be granted options.                                                                                     

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|7.   | LONG
      TERM INCENTIVE PERFORMANCE SHARE PLAN (a/k/a TPG PERFORMANCE SHARE PLAN)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7.1  | The
      rules of the TPG Performance Share Plan 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 TPG Performance Share
      Plan is outlined in Appendix 3 to this Agreement. Any and all possible tax
      and social security 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 TPG Code titled Voorkoming Misbruik Voorwetenschap
      (prevention of insider trading) and the rules of the TPG performance share
      plan apply to the Executive.
|7.2  | The
      parties have agreed that at the first possible opportunity in 2004 the Executive
      will be granted performance shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8.   | RETENTION
      PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8.1  | The Executive shall
        participate in that certain TNT Logistics North America Inc. Long-Term
        Retention Plan (f/k/a the "CTI Plan") (the "LTRP Plan") in accordance
        with the Letter of Understanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9.   | COMPANY
      CAR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9.1  | The Company shall
        provide the Executive with a car comparable to that provided by the Company
        for other members of the Board of Management for use when the Executive
        is in the Netherlands for business. All the costs of rent/lease, insurance
        and fuel shall be for the account of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.  | TELEPHONE
      COSTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.1 | The Company shall
        pay the costs of a mobile telephone and fax or other tools of communication
        related to the position of the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11.  | OTHER
      BENEFITS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|11.1 | Expenses.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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|11.2 | Holidays.
        The Executive shall receive 28 days paid holidays in addition to any US
        public holidays.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.3 | Compassionate
        Leave. Requests by the Executive for compassionate leave should be
        directed to the CEO of the Company. In the event of the death or serious
        illness of a member of the immediate family of the Executive, the Executive
        will be provided with travel costs to the USA to visit his family or attend
        the funeral. An additional 7 days compassionate leave, including transit
        time, will be granted.                                                                                                                                                                                                                                                                                                                                                                                                                    
|11.4 | Home Leave.
        The Executive shall be entitled to a reasonable number of business class
        return airline tickets per year to the USA consistent with actual practice
        since the date of 1 September 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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|11.5 | Accommodation.
        The Company will rent on behalf of the Executive fully furnished suitable
        accommodation in the area of Amsterdam/Hoofddorp to a maximum of Euro
        5,000 per month. Utility and local property taxes will also be reimbursed
        by the Company. Utility costs include gas, water, electricity, cleaning,
        TV license and standard (basic package) cable subscription. The Company
        will reimburse the Executive Dutch telephone bills and the Company will
        pay any income tax arising therefrom. Housing will be provided in the
        most tax efficient manner, at the discretion of the Company.                                                                                                                                                                                                                                                                      
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11.6 | Medical Insurance.During the terms of this Agreement, the Executive and his accompanying
        family will be covered by the medical insurance offered by BUPA Netherlands.
        The Company may, at its own discretion, arrange alternative medical insurance
        arrangements at any time at equivalent or increased coverage levels. The
        insurance membership premium will be paid by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|11.7 | Residence Permit/Work
        Permit.The Company has obtained and shall extend or otherwise keep
        current during the term of this Agreement, a Netherlands residence permit
        for Executive and a Netherlands work permit for Executive. The Executive
        shall fully cooperate in obtaining and maintaining these permits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|11.8 | Liability Insurance.The Company shall enroll the Executive under its standard Directors
        & Officers liability insurance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12.  | DISABILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|12.1 | 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 3.1 of this Agreement up
        to a maximum of twelve (12) months. Periods of disability with an interruption
        of not more than four weeks shall be regarded as linked together.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|13.  | CONFIDENTIALITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13.1 | 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.
|14.  | DOCUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14.1 | 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 insofar
        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                                                                                                                                                                                                                                                                                    

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|     | documents and/or correspondence
      and/or data carriers and/or copies thereof at termination of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15.  | NO ADDITIONAL OCCUPATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|15.1 | 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 TPG, or from doing business for his own account,
        without prior written consent of the Supervisory Board of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|16.  | NON-COMPETITION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|16.1 | The Executive undertakes
        that for a period of eighteen (18) months after the effective date of
        termination, for whatever reason, he will not 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 or by the most important
        groups of companies (including any affiliate of such groups of companies)
        which compete directly with the Company or its affiliates, as designated
        by the Company, without prior written consent of the Company. The list
        of said groups of companies as of the execution of this Agreement is attached
        as Appendix 4 to this Agreement (the "Initial List"). After consultation
        with and agreement by theExecutive,
        the Company will update this list every year on or before the 1st of July
        to ensure that the list will reflect the most important groups of companies
        consistent with the criteria referenced above; provided, however, the
        number of groups of companies on any updated list shall not exceed the
        number appearing on the Initial List. In the absence of an agreement by
        the Executive and the Company as to the entities to be included on an
        updated list, the list for the preceding year shall continue in effect
        until an updated list is agreed. Because of the global nature of the Company's
        business, the Executive and the Company agree that this restriction shall
        apply worldwide.
|16.2 | The obligation in
        article 16.1 of this Agreement does not apply to ownership of common shares
        registered at a Stock Exchange pertaining to such groups of companies.
        Nothing in this paragraph shall be construed to prevent the Executive
        from passively owning any class of equity securities listed on any national
        Securities Exchange or interdealer quotation system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|16.3 | In case of infringement(s)
        the Company reserves the right to enter a claim for immediate and total
        indemnification of losses suffered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|16.4 | This non-competition
        clause cannot in any way be construed as limiting the rights and obligations
        of TNT and the Executive in relation to the non-competition clause contained
        in the U.S. Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|17.  | EXTERNAL SUPERVISORY
      BOARD MEMBERSHIPS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|17.1 | 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 Chairman
        of the Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|18.  | PENALTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|18.1 | In the event the
        Executive breaches the obligations as expressed in articles 13, 14, 15,
        16 and 17, the Executive shall, if such breach continues after notice
        with respect to article 14 and without notice of default being required
        as to articles 13, 15, 16 and 17, 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 to injunctive relief the Company may have. The Company is entitled
        to claim full damages by way of alternative to the penalty.
|19.  | PREVIOUS AGREEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|19.1 | This Agreement supersedes
        all previous agreements and takes their place with the exception of the
        U.S. Agreement and the Letter of Understanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|20.  | U.S. AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|20.1 | This Agreement and
        the US Employment Agreement are separate documents and are not mutually
        dependant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|21.  | GOVERNING LAW,
        NO CAO APPLICABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|21.1 | This Agreement is
        governed by the laws of the Netherlands.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|21.2 | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                        

[SIGNATURES
  ON FOLLOWING PAGE]

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IN
  WITNESS WHEREOF, this Agreement has been signed and executed in duplicate on
  15 December, 2004 with effect as of September 1, 2003.

|TPG N.V.:                        | The Executive:    
|-------------------------------- | ------------------
|                                 |                   
|                                 |                   
|                                 |                   
|                                 |                   
|                                 |                   
|                                 |                   
|                                 |                   
|Mr. M. Tabaksblat                | Mr. David G. Kulik
|Chairman Supervisory
      Board |                   

|                 
|-----------------
|Mr. M. P. Bakker,
|CEO              

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APPENDIX
  1

To the Employment Agreement
  between TPG N.V. and Mr. David G. Kulik dated as of 15 December 2004 (the Agreement).

Re: Short Term Incentive
  Bonus Plan for Members of the Board of Management of TPG N.V.

The parties agree that
  Executive shall participate in this plan for the period commencing as of January
  1, 2004 and forward (not 2003) as follows:

|1. | Each
      year, within one week of the Supervisory Board meeting approving the annual
      accounts with respect to the relevant fiscal year, the Supervisory Board
      shall award a bonus to the members of the Board of Management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | This
      bonus is based on the combined base salary paid by the Company and by the
      U.S. Company under this Agreement and the U.S. Agreement referred to in
      article 3 of the Agreement (Sections 3.1 and 3.2) (collectively, the "Yearly
      Salary"). The target bonus amounts to 60% of such Yearly Salary.                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | The calculation
      of the bonus takes place on the basis of two targets being the growth rate
      of the earnings per share and the economic profit target for the division
      Logistics in accordance with the budget. Each year these targets shall be
      determined by the Supervisory Board in a meeting in the year preceding the
      relevant fiscal year and the members of the Board of Management shall be
      informed accordingly. In the meeting of the Remuneration Committee of the
      Supervisory Board following the adoption of the annual accounts with respect
      to the relevant fiscal year, the actual results of the set targets shall
      be established and the bonus shall be determined based on these.
|4. | The bonus
      shall be calculated as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | (a)                                                                                                                                                                          | below
      90% of target: no bonus                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------
| | (b)                                                                                                                                                                          | 90% of
      target: 50% of the Yearly Salary                    
| | (c)                                                                                                                                                                          | 100%
      of target: 60% of the Yearly Salary (= target bonus)
| | (d)                                                                                                                                                                          | 120%
      of target or more: 75% of the Yearly Salary           
| | With
      respect to percentages between 90 and 100, 100 and 120 respectively, as
      established by the Supervisory Board, the bonus shall be determined pro
      rata.

|5. | The bonus
      shall be paid as follows: 75% in cash and 25% in TPG ordinary shares (the
      shares). If at least 50% of the shares allocated are held for
      a period of three years, then the Company will match these shares by granting
      additional shares on a 1:1 basis. The terms and conditions for matching
      are laid down in the rules of the applicable Bonus/Matching Plan. The payment
      in shares and matching in shares will take place under the express condition
      that at the time of payment or match, such securities transactions are allowed
      to be executed by the Company and grantee under the law and in particular
      article 46 and next of the Wet Toezicht Effectenverkeer (prohibition of
      insider trading) and the TPG rules concerning inside information. If in
      respect of a fiscal year for which a bonus has become payable, these transactions
      can not be executed without violating the
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|   | just mentioned legal
        provisions, then before August 31 of the following fiscal year such bonus
        will be paid in cash only (100%).                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | A bonus shall only
        be due and payable, if:                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                        
|   | Notwithstanding
      the foregoing, the Executive shall receive a pro rata bonus for a year in
      which the Executive's employment was terminated, unless the failure of any
      of the above conditions has occurred as a result of an urgent cause given
      by the Executive.

|7. | The Remuneration
      Committee has the discretion to grant bonus outside of the above rules of
      the bonus scheme in case of exceptional circumstances.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

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APPENDIX
  2

To the Employment Agreement
  between TPG N.V. and Mr. David G. Kulik dated as of 15 December 2004 (the Agreement).

Re: Long Term Incentive
  Share Option Plan for Members of the Board of Management of TPG N.V. (a/k/a
  TPG Global Share Option Plan and U.S. Company Stock Option Plan)

|8.  | Each
      year, within one week of the Supervisory Board meeting approving the annual
      accounts with respect to the relevant fiscal year, pursuant to a proposal
      made by the Remuneration Committee of the Supervisory Board, the Supervisory
      Board shall grant options on ordinary shares of TPG N.V. to the members
      of the Board of Management. The granting of TPG ordinary shares will take
      place under the express condition that at the time of granting, such securities
      transactions are allowed to be executed by the Company and the grantee under
      the law and in particular under article 46 and next of the Wet Toezicht
      Effecten 1995 (prohibition of insider trading) and the TPG rules concerning
      inside information.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9.  | The number
      of share options is determined annually by the Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10. | The exercise
      of the options after the vesting period is subject to performance criteria.
      Each time options are granted the performance criteria and targets will
      be determined by the Supervisory Board in a meeting in the year preceding
      the relevant fiscal year and the members of the Board of Management shall
      be informed accordingly. The Supervisory Board is entitled to make adjustments
      to the performance schedule if it is appropriate to do so in its opinion.                                                                                                                                                                                                                                                                         
|11. | Members
      of the Board of Management shall be obliged to accept the Options and/or
      SARs granted to them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|12. | No options
      shall be granted to any eligible member of the Board of Management who is
      within one year of retirement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13. | The terms
      and conditions for granting options are laid down in the share option plan
      rules. These rules are determined by the Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|14. | Options
      will only be granted, if                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |  | at the
      time of the decision referred to in paragraph 1 of this regulation, neither
      party has given notice to the other party of the wish to terminate the employment
      agreement;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the member
      of the Board of Management is not suspended or relieved of his duties.                                                                                                          

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APPENDIX
  3

To the Employment Agreement
  between TPG N.V. and Mr. David G. Kulik dated as of 15 December 2004 (the Agreement).

Re: Long-Term Incentive
  Performance Share Plan for Members of the Board of Management of TPG N.V. (a/k/a
  TPG Performance Share Plan)

|1. | Each
      year, after the Supervisory Board meeting approving the annual accounts
      with respect to the relevant fiscal year, pursuant to a proposal made by
      the Remuneration Committee of the Supervisory Board, the Supervisory Board
      shall grant ordinary shares of TPG N.V. to the members of the Board of Management.
      The granting of TPG ordinary shares will take place under the express condition
      that at the time of granting, such securities transactions are allowed to
      be executed by the Company and the grantee under the law and in particular
      under article 46 and next of the Wet Toezicht Effectenverkeer 1995 (prohibition
      of insider trading) and the TPG rules concerning inside information.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The number
      of shares is determined annually by the Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3. | The release
      of the shares after the performance period is subject to performance criteria.
      Each time shares are granted the performance criteria and targets will be
      determined in a meeting of the Supervisory Board in the year preceding the
      relevant fiscal year and the members of the Board of Management shall be
      informed accordingly. The Supervisory Board is entitled to make adjustments
      to the performance schedule if it is appropriate to do so in its opinion.                                                                                                                                                                                                                                                 
|4. | Members
      of the Board of Management shall be obliged to accept the shares granted
      to them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | No shares
      shall be granted to any eligible member of the Board who is within one year
      of retirement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|6. | The terms
      and conditions for granting shares are laid clown in the rules applicable
      to the performance share plan. These rules are determined by the Supervisory
      Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|7. | Shares
      will only be granted, if:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |  | at the
      time of the decision referred to in paragraph 1 of this regulation, neither
      party has given notice to the other party of the wish to terminate the employment
      agreement;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the member
      of the Board of Management is not suspended or relieved of his duties.                                                                                                          

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APPENDIX
  4

To the Employment Agreement
  between TPG N.V. and Mr. David G. Kulik dated as of 15 December 2004 (the Agreement).

Re: List of Groups
  of Companies as Referred to in Article 16.1

|Ø | Deutsche Post (DWPN)                   
|- | ---------------------------------------
|Ø | UPS                                    
|Ø | FedEx                                  
|Ø | Nippon Express                         
|Ø | Schenker                               
|Ø | Exel                                   
|Ø | Kuehne & Nagel                         
|Ø | Panalpina                              
|Ø | CNF/Menlo                              
|Ø | Expeditors                             
|Ø | CH Robinson                            
|Ø | Uti Worldwide                          
|Ø | EGL                                    
|Ø | Penske                                 
|Ø | and all European
      postal operators

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Exhibit
  4.7

Board
  Agreement

|The
      undersigned:
|----------------------
|1.                    
|and                   
|2.                    

|Whereas:
|--------
|       
|       
|       
|       
|       

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Declare to have agreed
  as follows:

|1.  | Date of Commencement
      of Employment and Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1 | The Executive enters
      into an employment agreement with the Company in the position of member
      of the Board of Management with the personal title of Group Managing Director
      Express, effective as of 1 January 2004.                                                                                                                                                                                                                                                                                                                                                                               
|1.2 | In connection with
      the work activities as member of the Board of Management under this agreement,
      the Executive's normal place of work shall be Hoofddorp, The Netherlands.
      The Company will be entitled to change the place of employment after consultation
      with the Executive. In addition, the parties accept that the position entails
      considerable travelling.                                                                                                                                                                                                                  
|1.3 | The Executive is
        obliged to do or to refrain from doing all that an officer in similar
        positions should do or should refrain from doing. The Executive shall
        fully devote herself and her energy to promoting the interests of the
        Company.                                                                                                                                                                                                                                                                                                                                         
|1.4 | The Executive has
      the obligation which has 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, Notice of Termination and Severance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.1 | This agreement is
      entered into for a definite period of 4 (four) years. Accordingly, this
      agreement will terminate by operation of law, without notice being required,
      on 31 December 2007.                                                                                                                                                                                                                                                                                                                                                                                                       
|2.2 | Without prejudice
      to paragraph 1 of this article, this agreement may be terminated by either
      party during its term with due observance of a notice period of 6 months
      for the Company and a notice period of 3 months for the Executive.                                                                                                                                                                                                                                                                                                                                                          
|2.3 | If after expiry of
      the period referred to in paragraph 1 of this article the employment agreement
      is continued for a definite or an indefinite period, the employment agreement
      may be terminated by either party by giving notice with due observance of
      a notice period of 6 months for the Company and a notice period of 3 months
      for the Executive. The 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 pensionable age under the applicable Pension Plan.



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|2.4  | If the Company gives
      notice of termination of the employment agreement, unless the Executive
      has given an urgent cause for such notice, a severance amount of €
      120,000 gross only will be made available to the Executive upon the effective
      date of termination. No severance amount shall be made available to the
      Executive if this agreement terminates by operation of law, as mentioned
      in article 2.1.                 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.   | Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.1  | As of 1 July 2004,
      the Executive's yearly board fee shall amount to 120,000 gross per year,
      which shall be paid in twelve equal instalments at the end of each month.
      In addition to this amount the Executive shall not be entitled to the payment
      of a holiday allowance.                                                                                                                                                                
|4.   | Tax and Social
      Security                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4.1. | The Company and the
      Executive will apply to the Netherlands Tax Office for permission to operate
      an untaxed allowance for extraterritorial expenses on the basis of the facility
      incorporated into the Dutch Wage Tax Act effective January 1, 2001 (commonly
      known as the 30% facility). The Company will not be held liable
      for any financial consequences should this qualification be refused or at
      any time be reversed.
|4.2. | With respect to the
        application of the 30%-facility, the following will be taken into account:                                                                                                                                                                                                                                                                                                                                                             

| | 1. | If, and
      insofar, Executiveis, based on article 9 of the Uitvoeringsbesluit
      loonbelasting 1965, entitled to receive a tax-free cost reimbursement
      for extraterritorial costs, it has been agreed with the Executivethat
      her current employment income (loon uit tegenwoordige dienstbetrekking),
      will be reduced accordingly so that 100/70 of her current employment income
      equals the originally agreed current employment income.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | If, and
      insofar, article 1 is applicable, the Executivereceives a cost reimbursement
      for extraterritorial costs from the Company equal to 30/70 of the current
      employment income as agreed in article 1.                                                                                                                                                                                                                                                 
| | 3. | The Executive
      acknowledges the fact that an adjustment of the agreed remuneration of article
      1 can influence all employment income related payments and benefits like
      pension and social security benefits.                                                                                                                                                                                                                                              

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|4.3 | The Executive will
      remain under the French Social Security System, to the extent as allowed
      from a social security and fiscal law point of view.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.  | Short Term Incentive
      Bonus Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5.1 | The bonus incentive
      plan for the members of the Board of Management and the connected share
      matching scheme, as these are established from time to time by the Supervisory
      Board, apply to the Executive. The bonus incentive plan is outlined in Exhibit
      A to this agreement. The bonus shall be paid 75% in cash and 25% in TPG
      ordinary shares (the Bonus Shares). All possible tax and social
      security consequences shall be for the account of the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.  | Long Term Incentive
      Matching Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6.1 | If at least 50% of
      the Bonus Shares allocated are held for a period of three years, under the
      current matching plan, the Company will match these Shares by granting additional
      Shares on a 1:1 basis. The rules of the relevant Matching Plan and its underlying
      regulations, as these are established from time to time by the Supervisory
      Board, apply to the Executive. Any and all possible tax and social security
      consequences related to the granting, vesting, exercising and/or sale of
      shares shall be for the account of the Executive. The Executive shall only
      sell shares after consultation with the compliance officer and after the
      approval of the Chairman of the Supervisory Board. Any shares acquired by
      the Executive as a result of the Matching Plan 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 TPG Code entitled Voorkoming
      Misbruik Voorwetenschap (prevention of insider trading) applies to the
      Executive.
|7.  | Long Term Incentive
      Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.1 | The rules of the relevant
      share option plan of TPG N.V. and its underlying regulations and criteria
      for granting options, as these are established from time to time by the
      Supervisory Board, apply to the Executive. The share option plan is outlined
      in Exhibit B to this agreement. Any possible tax and social security consequences
      related to the granting, vesting and/or exercise of share options and subsequently
      of the underlying shares shall be for the account of the Executive. The
      Executive shall only exercise options after consultation with the compliance
      officer and after the approval of the Chairman of the Supervisory Board.
      Any shares acquired by the Executive as a result of exercising options may
      only be sold, if the Executive does not possess inside information at that
      moment. In addition, such shares may                                                                                                                                                                                                                 

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|     | not be sold in a closed
      period. The TPG Code entitled Voorkoming Misbruik Voorwetenschap
      (prevention of insider trading) applies to the Executive. The parties have
      agreed that at the first possible opportunity (2004) the Executive shall
      be granted options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8.   | Long Term Incentive
      Share Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8.1  | The rules of the relevant
      performance share plan of TPG 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 C to this agreement. Any and all possible tax and social security
      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 TPGCode
      entitled Voorkoming Misbruik Voorwetenschap (prevention of insider
      trading) and the rules of the TPG performance share plan apply to the Executive.
      The parties have agreed that at the first possible opportunity (2004) the
      Executive shall be granted a number of shares.
|9.   | Company Car                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|9.1. | The Company shall
      provide the Executive with a company car commensurate with her 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 € 90,000 inclusive of BPM and
      VAT. The car will be equipped with an alarm system. All the costs of fuel
      and normal maintenance shall be for the account of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.  | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.1 | The business oriented
      expenses incurred by the Executive in the execution of her business tasks
      shall be reimbursed by the Company on receipt of a specified statement of
      expenses and supporting receipts. Any possible tax and social security consequences
      will be for the account of the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|11.  | Telephone Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|11.1 | The Company shall
      pay the costs related to the subscription and ongoing costs of a private
      telephone. The fixed fiscal amount ("forfait") - shall be treated
      as taxable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|     | income. In addition,
      the Company shall pay the costs of a mobile telephone and fax or other tools
      of communication that will be made available to the Executive and are necessary
      for her to adequately perform her duties. Any possible tax and social security
      consequences, related to this arrangement, are for the account of the Executive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12.  | Disability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|12.1 | 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 board fee as defined in article 3 up to a maximum of 12 months.
        If the disability continues after the first 12 months, the Company shall
        for a subsequent period of at most 12 months pay 70% of the board fee
        as defined in article 3. Periods of disability with an interruption of
        not more than four weeks shall be regarded as linked together.                                                                                                                                                                                                                                                                                                                   
|12.2 | The Executive shall
        not be entitled to the board fee payment referred to above, if and to
        the extent that she can validly claim damages in connection with her 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 her 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.
|12.3 | The following shall
        be deducted from the board fee owed by the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | (a) | the amounts
      of any cash benefit to which the Executive is entitled under any statutory
      or other insurance or from any social or other fund membership of which
      has been stipulated contractually or results from this contract of employment.
      These amounts include in any event payments made to the Executive from the
      French disability scheme applicable within the Société;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | the amounts
      of earned income for work which the Executive has performed elsewhere, despite
      her disability, other than for the Company, either under a contract of employment
      or otherwise.                                                                                                                                                                                                    

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|13.  | Confidentiality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|13.1 | During the continuance
      of the employment or at any time after the termination thereof the Executive
      shall not, except in the proper course of her 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 she shall become possessed whilst employed by the Company
      or prior thereto, nor shall she use or attempt to use any such information
      in any manner and she shall use her best endeavours to prevent the disclosure
      of any such information by third parties. This restriction shall continue
      to apply after the termination of the employment without limitation in point
      of time but shall cease to apply to information or knowledge that has come
      into the public domain.
|13.2 | In case of infringement(s),
      the Company reserves the right to enter a claim for immediate and total
      indemnification of losses suffered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14.  | Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|14.1 | The Executive shall
      not have nor keep in her 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 her employment, except insofar
      as and for as long as necessary for the performance of her 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 or on suspension of the
      Executive from active duty for whatever reason.                                                                                                                                                                                                                                                                                                                 
|15.  | No Additional Occupation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|15.1 | The Executive shall
      refrain from accepting remunerated or time-consuming non-remunerated work
      activities with or for third parties not belonging to TPG, or from doing
      business for her own account without prior written consent of the Supervisory
      Board of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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|16.  | Non-Competition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|16.1 | The Executive undertakes
      not to be employed or involved in any way, directly or indirectly, either
      for her own account or for the account of others, in an employment agreement
      or in any consulting arrangement or in any other manner, formally or informally,
      in or by any company that is an affiliate of any of the ten biggest groups
      of companies worldwide in relation to (i) Mail, or (ii) Express, or (iii)
      Logistics in terms of global turnover (total turnover as per last approved
      annual accounts at the time of the termination of the employment agreement
      in relation to (i) Mail, (ii) Express or (iii) Logistics) for a period of
      18 months after the effective date of termination of the employment agreement,
      for whatever reasons, without prior written consent of the Company. This
      obligation does not apply to ownership of common shares registered at a
      Stock Exchange pertaining to such groups of companies. This restriction
      applies worldwide.
|16.2 | In case of infringement(s)
      the Company reserves the right to enter a claim for immediate and total
      indemnification of losses suffered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|16.3 | This non-competition
      clause cannot in any way be construed as limiting the rights of TNT Newco
      SNC and the Executive in relation to the non-competition clause contained
      in the agreement between these parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|17.  | External Supervisory
      Board Memberships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|17.1 | 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 Chairman
        of the Supervisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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, without notice of default being required, pay to the
      Company for each such breach a penalty equal to an amount of € 100,000
      plus a penalty of € 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|19.  | Previous Agreements                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|19.1 | This agreement supersedes
      all previous agreements and takes their place except for the employment
      agreement and the terms and conditions following thereof between the Executive
      and the TNT Newco SNC dated 16 June 2003, as amended on this same date.
|20.  | Governing Law,
      No CAO Applicable                                                                                                                                                                                                                                    
|20.1 | This agreement is
      governed by the laws of the Netherlands.                                                                                                                                                                                                          
|20.2 | 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.                                           

In witness whereof,
  this agreement has been signed and executed in duplicate this 22 September 2004.

|TPG N.V.:                        | The Executive  
|-------------------------------- | ---------------
|                                 |                
|                                 |                
|                                 |                
|                                 |                
|                                 |                
|                                 |                
|Mr M. Tabaksblat,                | Ms M.C. Lombard
|Chairman Supervisory
      Board |                

|TPG N.V.       
|---------------
|               
|               
|               
|               
|               
|               
|Mr M.P. Bakker,
|CEO            

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Exhibit
  8.1

|Name                                                          | CountryLabel              
|------------------------------------------------------------- | --------------------------
|15-25JAAR.NL B.V.                                             | Netherlands               
|A.S.S. Logistik
Schrader Schachinger GmbH                     | Austria                   
|A.S.S. Logistik
Schrader Schachinger GmbH & Co. KG            | Austria                   
|Activ Direktwerbung
GmbH                                      | Germany                   
|ADM - Agentura pro
Distribuci a Marketing Sro                 | Czech
Republic            
|Agentura
Manon, Spol Sro                                      | Czech
Republic            
|Air
Transport Industries (A.T.I.) Limited                     | Papua
New Guinea          
|Aixor
Sarl (Société Aixoise d'Organisations Logistiques)      | France                    
|Al Kazemi Imports
& Exports WLL                               | Kuwait                    
|Alltrans Air, Inc.                                            | U.S.A.                    
|Alltrans Carriers,
Inc.                                       | Canada                    
|Alltrans Express
U.S.A., Inc.                                 | U.S.A.                    
|Alltrans Inc.                                                 | U.S.A.                    
|Amihan Management
Services Inc.                               | Philippines               
|Anji - TNT Automotive
Logistics Company Limited               | People's
Republic of China
|Archive
and Data Storage Limited (ADS)                        | U.K.                      
|Auvergne Messagerie
Distribution Logistique Sarl              | France                    
|AVIOSERVIZI Jet
Service Srl                                   | Italy                     
|Avon Sro                                                      | Czech
Republic            
|Belgische
Distributiedienst NV/SA                             | Belgium                   
|Bleckmann &
Meyer Transitos Internacionais, Limitada          | Portugal                  
|Bleckmann (Holding)
U.K. Limited                              | U.K.                      
|Bleckmann (Portugal)
Transitarios Internacionais, Limitada    | Portugal                  
|Bleckmann Distribution
Limited                                | U.K.                      
|Bleckmann Logistics
Limited                                   | U.K.                      
|Bleckmann Solutions
B.V.                                      | Netherlands               
|Briefpartner System
AG                                        | Germany                   
|Brilliant Jade Investment
Company Limited                     | British
Virgin Islands    
|Bruna
B.V.                                                    | Netherlands               
|Bruna Winkels B.V.                                            | Netherlands               
|BSC B.V.                                                      | Netherlands               
|BSC South Africa
B.V.                                         | Netherlands               
|C & C - Trasporti
e Spedizioni Internazionali Srl             | Italy                     
|C.A.T. - Companhia
de Afretamentos e de Transportes, Limitada | Portugal                  
|CAR LOG S.A.                                                  | Mexico                    

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|Cargo
Center Sweden Aktiebolag                                        | Sweden      
|--------------------------------------------------------------------- | ------------
|Cargo
Center Sweden KB                                                | Sweden      
|Cargo
Link Aktiebolag                                                 | Sweden      
|Castelletti
(USA) Inc.                                                | U.S.A.      
|CAT
- Compagnie d'Affrètement et de Transport SA                      | France      
|CAT
Argentina SA                                                      | Argentina   
|CAT
Benelux NV/SA                                                     | Belgium     
|CAT
CHILI S.A.                                                        | Chile       
|CAT
España, Fletamentos y transportes SA                              | Spain       
|CAT
GmbH                                                              | Germany     
|CAT
Italia Srl                                                        | Italy       
|CAT
Logistic Transportna Doo                                          | Slovenia    
|CAT
Logistics Cargo España Sarl                                       | Spain       
|CAT
Logistics Cargo France SA                                         | France      
|CAT
Logistics Cargo GmbH                                              | Germany     
|CAT
Logistics Cargo Limited                                           | Croatia     
|CAT
Logistics Cargo Polska Sarl                                       | Poland      
|CAT
Logistics Cargo Portugal Sarl                                     | Portugal    
|CAT
Logistics Vehicles Limited                                        | Croatia     
|CAT
Polska Sp zoo                                                     | Poland      
|CAT
Transporte GmbH                                                   | Austria     
|CAT
UK Services Limited                                               | U.K.        
|CATLOG
Logistica de Transporte SA                                     | Brazil      
|CAT-WWL
Logistics Limited                                             | South
Africa
|CD
Marketing Services Group Limited                                   | U.K.        
|Cell-Tell
SpA                                                         | Italy       
|CEMGA
- Consortium d'Exploitation des Magasins Generaux d'Amiens Sarl | France      
|Cendris
(Mauritius) Limited                                           | Mauritius   
|Cendris
1 Limited                                                     | U.K.        
|Cendris
BSC Customer Contact B.V.                                     | Netherlands 
|Cendris
Customer Contact B.V.                                         | Netherlands 
|Cendris
Customer Contact Deutschland GmbH                             | Germany     
|Cendris
Dataconsulting B.V.                                           | Netherlands 
|Cendris
Deutschland GmbH                                              | Germany     
|Cendris
Document Management B.V.                                      | Netherlands 
|Cendris
Document Presentment B.V.                                     | Netherlands 

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|Cendris
Limited                                                  | U.K.          
|---------------------------------------------------------------- | --------------
|Cendris UK Limited                                               | U.K.          
|Cerilly Invest SA                                                | Luxembourg    
|Cimedia Printmedienvertriebsgesellschaft
mbH                     | Austria       
|Circular Distributors
Limited                                    | U.K.          
|City Courier Nederland
B.V.                                      | Netherlands   
|Colandel NV/SA                                                   | Belgium       
|Colton Carriers
(Vic.) Pty. Limited                              | Australia     
|Colton Carriers
(Vic.) Unit Trust                                | Australia     
|COMATRAN - Société
de Consignation Maritime et de Transit SA     | France        
|Combined Logistics
(Hong Kong) Limited                           | Hong
Kong     
|Combined
Logistics (U.S.A.) Inc.                                 | U.S.A.        
|Combined Logistics
International Mexico SA de CV                 | Mexico        
|Compagnie d'Affrètement
et de Transport CAT (Suisse) Sarl        | Switzerland   
|Compania de asesoramiento
de transporte SA                       | Mexico        
|Concord Global Trade
& Transport Limited                         | Hong
Kong     
|Copal
Sarl (Compagnie Parisienne de Logistique)                  | France        
|CoTrans Logistic
GmbH & Co. KG                                   | Germany       
|CoTrans Logistic
Verwaltungs GmbH                                | Germany       
|CTI Services, Inc.                                               | U.S.A.        
|Customized Logistics
(UK) Limited                                | U.K.          
|Customized Logistics
Argentina SA                                | Argentina     
|Customized Transportation
International Inc.                     | U.S.A.        
|CV International
Post Corporation UA                             | Netherlands   
|Dalmet Pty. Limited                                              | Australia     
|Data Base Management
NV/SA                                       | Belgium       
|De Digitale Brievenbus
B.V.                                      | Netherlands   
|De Raket B.V.                                                    | Netherlands   
|Denis Bodden NV/SA                                               | Belgium       
|DGI Direct Marketing
Europe B.V.                                 | Netherlands   
|Dimar Slovakia Sro                                               | Slovakia      
|Dimar Sro                                                        | Czech
Republic
|DIPSA
- Distribution d'Imprimes Publicitaires Sans Adresse NV/SA | Belgium       
|Distribution Services
Europe B.V.                                | Netherlands   
|DomiCall sro                                                     | Czech
Republic
|E.O.L.
Inc. (in liquidation)                                     | U.S.A.        

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|Easymall
B.V.                                          | Netherlands
|------------------------------------------------------ | -----------
|EML
Srl                                                | Italy      
|EP Europost
AG & Co. KG                                | Germany    
|EP Europost
Geschaftsfuhrungs AG                       | Germany    
|Equity
Credit Services Limited                         | U.K.       
|Equity
Trust Belgium NV                                | Belgium    
|Euro
Mail B.V.                                         | Netherlands
|Eurolettershop
Srl                                     | Italy      
|European
Data & Print Services B.V.                    | Netherlands
|European
Mail Networks Holding B.V.                    | Netherlands
|Europese
Distributiecentrum Maatschappij "E.D.M." B.V. | Netherlands
|Exceed
Aktiebolag                                      | Sweden     
|Exceed
Denmark A/S                                     | Denmark    
|Exceed
Finland Oy                                      | Finland    
|Exceed
Sweden Aktiebolag                               | Sweden     
|Express
Belgium NV/SA                                  | Belgium    
|Factora
Factoring und Inkasso GmbH                     | Germany    
|Fashionet
AG                                           | Switzerland
|Freight
International Limited                          | U.K.       
|FSZ
Fahrzeug Service Zentrum GmbH                      | Germany    
|G3 Worldwide
(Belgium) NV/SA                           | Belgium    
|G3 Worldwide
(Canada) Inc.                             | Canada     
|G3 Worldwide
(France) SAS                              | France     
|G3 Worldwide
(Services) Inc.                           | U.S.A.     
|G3 Worldwide
(Services) NV/SA                          | Belgium    
|G3 Worldwide
(Sweden) AB                               | Sweden     
|G3 Worldwide
(US) Inc.                                 | U.S.A.     
|G3 Worldwide
Aspac Private Limited                     | Singapore  
|G3 Worldwide
Distribution (Singapore) Private Limited  | Singapore  
|G3 Worldwide
Europe B.V.                               | Netherlands
|G3 Worldwide
Hungary Kft                               | Hungary    
|G3 Worldwide
Mail (Australia) Pty Ltd                  | Australia  
|G3 Worldwide
Mail (Germany) GmbH                       | Germany    
|G3 Worldwide
Mail (HK) Limited                         | Hong
Kong  
|G3
Worldwide Mail (Japan) Inc.                         | Japan      
|G3 Worldwide
Mail (Malaysia) Sdn Bhd                   | Malaysia   

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|G3 Worldwide
Mail (Singapore) Private Limited          | Singapore   
|------------------------------------------------------ | ------------
|G3 Worldwide
Mail (Switzerland) AG                     | Switzerland 
|G3 Worldwide
Mail (UK) Limited                         | U.K.        
|G3 Worldwide
Mail LLC (Russia)                         | Russia      
|G3 Worldwide
Mail Logistics (India) Private Limited    | India       
|G3 Worldwide
Mail Logistics (Thailand) Company Limited | Thailand    
|G3 Worldwide
Mail N.V.                                 | Netherlands 
|G3 Worldwide
Mail Services GmbH                        | Austria     
|G3 Worldwide
Netherlands B.V.                          | Netherlands 
|GAL
- Global Automotive Logistics Sarl                 | France      
|GAL
Finance SA                                         | Luxembourg  
|GAMS
- Global Automotive Management Services Srl       | France      
|GD Insurance
Company Limited                           | Ireland     
|GD Net
B.V.                                            | Netherlands 
|Gelders
Holding B.V.                                   | Netherlands 
|Gelders
Overslag- en Expeditie Beheer B.V.             | Netherlands 
|Gelders
Spetra International B.V.                      | Netherlands 
|GFI
- Gestion Financière Informatisée NV/SA            | Belgium     
|GfW
- Gesellschaft fur Werbemittelverteilung mbH       | Austria     
|Gie
Club des Dix                                       | France      
|GMA
Gesellschaft für Marketing und Absatzforderung mbH | Germany     
|Godshantering
Landvetter Aktiebolag                    | Sweden      
|Great
Western Assurance Company Limited                | Barbados,
WI
|IAC
Inc. - Bahamas (in liquidation)                    | Bahamas     
|ID Company
Fashion B.V.                                | Netherlands 
|Ilres
Sarl                                             | Luxembourg  
|Independent
Mail B.V. in liquidatie                    | Netherlands 
|In-night
Express Austria GmbH                          | Austria     
|Interloc
(Bahamas) Limited (in liquidation)            | Bahamas     
|International
Mail (Spain) Sl                          | Spain       
|Interpost
Group of Companies B.V.                      | Netherlands 
|Interpost
Handling B.V.                                | Netherlands 
|Interpost
Handling C.V.                                | Netherlands 
|Inversiones
TNT Limited y Compania Ltda                | Chile       
|J. McPhee
& Son (Australia) Holdings Pty. Limited      | Australia   
|Jet
Services Deutschland GmbH                          | Germany     

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|Jet
Services Deutschland NVS GmbH                              | Germany                   
|-------------------------------------------------------------- | --------------------------
|Jet
Services Deutschland NVS Verwaltungs GmbH (in liquidation) | Germany                   
|Jet
Services Nederland B.V.                                    | Netherlands               
|Kenniswijk
regio Eindhoven B.V.                                | Netherlands               
|KEY
Logistics Limited                                          | U.K.                      
|Koninklijke
TPG Post B.V.                                      | Netherlands               
|Landvetter
Cargo Center Aktiebolag                             | Sweden                    
|Liege
Global Cargo NV/SA                                       | Belgium                   
|Lifecycle
Marketing (Mother & Baby) Limited                    | U.K.                      
|Logika
Servizi Srl                                             | Italy                     
|Logipro
Oy                                                     | Finland                   
|Logispring
Investment Fund Holding B.V.                        | Netherlands               
|LogiSpring
Investment Fund NV/SA                               | Belgium                   
|Logistics
International NV/SA                                  | Belgium                   
|Logistiques
Ladoux Sarl                                        | France                    
|Logistiques
Nicolas SAS                                        | France                    
|Loyalty
Profs B.V.                                             | Netherlands               
|Lunham
& Reeve Inc. (in liquidation)                           | U.S.A.                    
|M.S.
Medienservice GmbH                                        | Austria                   
|Mach++
Express Worldwide Limited                               | People's
Republic of China
|Mailprofs
Belgium NV/SA                                        | Belgium                   
|Mailprofs
Document Services Belgium NV/SA                      | Belgium                   
|Mailprofs
Employment B.V.                                      | Netherlands               
|Mailprofs
Facility B.V. (in liquidatie)                        | Netherlands               
|Mailprofs
Postkamer Beheer B.V.                                | Netherlands               
|Mailprofs
Uitzendbureaux B.V.                                  | Netherlands               
|Mailway
Sdn Bhd                                                | Malaysia                  
|Malmö
Flygfraktterminal Aktiebolag                             | Sweden                    
|Malmö
Flygfraktterminal KB                                     | Sweden                    
|MCC
Holdings Limited                                           | Papua
New Guinea          
|McPhee
Group Pension Funds Pty. Limited                        | Australia                 
|McPhee
Transport Pty. Limited                                  | Australia                 
|Mendy
Developpement SAS                                        | France                    
|Mendy
Limitada                                                 | Portugal                  
|Mercury
Re Limited                                             | Ireland                   
|Microfilm
Reprographics Limited                                | U.K.                      

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|Moresby
Customs and Cartage Pty. Limited                                     | Papua
New Guinea
|---------------------------------------------------------------------------- | ----------------
|MR
Digital Capture Services Limited                                          | U.K.            
|MR Microrite
Systems Limited                                                 | U.K.            
|MR/Lason
LLC                                                                 | U.S.A.          
|Nationale
Stadspostdiensten Nederland B.V.                                   | Netherlands     
|Net
Danmark Express A/S                                                      | Denmark         
|Netwerk
VSP B.V.                                                             | Netherlands     
|Netwerk
VSP Transport B.V.                                                   | Netherlands     
|New
Bricks Services B.V.                                                     | Netherlands     
|Newsagents
Wholesale Corporation Limited                                     | U.K.            
|Newspaper
Transport Limited                                                  | U.K.            
|Nord
Mendy Sarl                                                              | France          
|NTM
- De Nationale Transport Maatschappij NV/SA                              | Belgium         
|Nuova
Tecno SpA                                                              | Italy           
|NVS
Hungary Express Service Szolgáltató Kft                                  | Hungary         
|Old
Bertola Bari Srl (OB Bari Srl)                                           | Italy           
|Overtrans
Srl                                                                | Italy           
|Oy Speditionsservice
I.N.T. Aktiebolag                                       | Finland         
|Pacific
East Asia Cargo Airlines Inc. - PEAC                                 | Philippines     
|Pact
Benelux B.V.                                                            | Netherlands     
|Pan
Air Lineas Aereas SA                                                     | Spain           
|Patavina
Servizi Srl                                                         | Italy           
|Pioneer
Logistics Services Inc.                                              | U.S.A.          
|Piramide
Servizi Srl                                                         | Italy           
|PNG
Air Charter Services Limited                                             | Papua
New Guinea
|PNG
Air Freight Limited                                                      | Papua
New Guinea
|Polar
Air & Seacargo Oy                                                      | Finland         
|Postkantoor-Winkel
B.V.                                                      | Netherlands     
|Postkantoren
B.V.                                                            | Netherlands     
|PPIC
(UK) Limited                                                            | U.K.            
|PPP
- Société pour la distribution des Periodiques, Presse et Publicité
BVBA | Belgium         
|PQR
Delivery Services Private Limited (in liquidation)                       | Singapore       
|Prime
Vision B.V.                                                            | Netherlands     
|Print
& Mail Intercontinental (Asia) Private Limited (in liquidation)        | Singapore       
|Print
Express Zustellservice GmbH                                            | Austria         
|Privver
Holding B.V.                                                         | Netherlands     

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|Privver
Licenses B.V.                                                          | Netherlands         
|------------------------------------------------------------------------------ | --------------------
|Programme
Office B.V.                                                          | Netherlands         
|Project
Hurricane Limited                                                      | U.K.                
|Promark
Srl (Postini)                                                          | Italy               
|Promotion
& Mailing Services Srl - PMS                                         | Italy               
|PSP
SUB Holding B.V.                                                           | Netherlands         
|PT Skypak
International                                                        | Indonesia           
|PT TNT
Logistik Indonesia                                                      | Indonesia           
|PTT
Post Holdings B.V.                                                         | Netherlands         
|PTT
Post Logistiek Maarssen B.V.                                               | Netherlands         
|PTT
Post UK Holdings Limited                                                   | U.K.                
|Recapitalia
Tributi Srl                                                        | Italy               
|redmail
Address Zustelldienst GmbH                                             | Austria             
|redmail
Logistik & Zustellservice GmbH                                         | Austria             
|redmail
Medienzustellservice Oberösterreich GmbH                               | Austria             
|Reply
do Brasil Limitada                                                       | Brazil              
|Reply
SpA                                                                      | Italy               
|Rinaldi
l'Espresso Srl                                                         | Italy               
|Riteway
Transport Pty. Limited                                                 | Australia           
|Ross
Meo Limited                                                               | New
Zealand         
|Ruddicks
2000 Limited                                                          | U.K.                
|S.D.O.
Servizi di Distribuzione Ottica Srl                                     | Italy               
|S.I.T.T.A.M.
Spedizioni Internazionali Trasporti Terrestri Aerei Marittimi SpA | Italy               
|SACT
Aktiebolag                                                                | Sweden              
|SACT
International Aktiebolag                                                  | Sweden              
|Sasakyan
Holdings, Inc.                                                        | Philippines         
|Sayer
& Company (Transport - I.O.M.) Limited                                   | Isle
of Man         
|Scanfreight
(H.K.) Limited                                                     | Hong
Kong           
|Scanfreight
Inc.                                                               | U.S.A.              
|Scansped
Concord N.V.                                                          | Netherlands
Antilles
|Schrader
Fairlead Limited                                                      | U.K.                
|SCI
Les Chaux Basses                                                           | France              
|SCI
Manu Trans Europe                                                          | France              
|Seducom
B.V.                                                                   | Netherlands         
|SETH
SA (Société d'Exploitation du Terminal Havrais)                           | France              
|SGAN
SA (Société Générale d'Armement et de Naviation)                          | France              

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|Shanghai
Anji-Suchi Warehousing and Transportation Company Limited | People's
Republic of China
|------------------------------------------------------------------ | --------------------------
|Shiculka
& Macatch Sro                                             | Slovakia                  
|Site
Leasing Worldwide Limited                                     | U.K.                      
|SITTAM
Reggio Emilia Srl                                           | Italy                     
|SITTROM
Expeditii Internazionale Srl                               | Romania                   
|SOBER
Srl (in liquidation)                                         | Italy                     
|Spedition
Bauernfeind GmbH                                         | Germany                   
|Start-up
Invest NV/SA                                              | Belgium                   
|Supply
Chain Solutions (Asia Pacific) Private Limited              | Singapore                 
|Supply
Chain Solutions (Hong Kong) Limited                         | Hong
Kong                 
|SVL
Schrader Verteil + Logistik BVBA                               | Belgium                   
|Swiss
Post Net AG                                                  | Switzerland               
|T.E.I.
- Traffic Express International Co., Ltd.                   | Thailand                  
|Taylor
Barnard Distribution Limited                                | U.K.                      
|Taylor
Barnard Group Limited                                       | U.K.                      
|Taylor
Barnard Holdings Limited                                    | U.K.                      
|Tecnologistica
NV/SA                                               | Belgium                   
|TEL.I.S.
Telecommunication Integrated Services SpA                 | Italy                     
|Telecontact
International B.V.                                     | Netherlands               
|Telecontact
Luxembourg Sarl (in liquidation)                       | Luxembourg                
|Telekado
B.V.                                                      | Netherlands               
|Telekado
Services B.V. (in liquidatie)                             | Netherlands               
|Telepost
SpA                                                       | Italy                     
|Terinvest
CVA                                                      | Belgium                   
|The
Data Depot (Midlands) Limited                                  | U.K.                      
|Timur
Carriers (Private) Limited                                   | Singapore                 
|TNT
(China) Holding Company Limited                                | People's
Republic of China
|TNT
(H.K.) Limited                                                 | Hong
Kong                 
|TNT
(PNG) Limited                                                  | Papua
New Guinea          
|TNT
(UAE) LLC                                                      | United
Arab Emirates      
|TNT
Air & Ocean B.V.                                               | Netherlands               
|TNT
Airways NV/SA                                                  | Belgium                   
|TNT
Aiwarys NV/SA, UK branch                                       | U.K.                      
|TNT
Akademie Gesellschaft für Training und Personalentwicklung mbH | Germany                   
|TNT
Argentina SA                                                   | Argentina                 
|TNT
Arvil - joint venture TNT Arcese Bonzano SpA                   | Italy                     

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|TNT
Australia Pty. Limited                               | Australia                 
|-------------------------------------------------------- | --------------------------
|TNT
Autologistics Limited                                | U.K.                      
|TNT
Automotive Logistics España SA                       | Spain                     
|TNT
Automotive Logistics Hellas S.A.                     | Greece                    
|TNT
Automotive Logistics Poland Sp zoo                   | Poland                    
|TNT
Automotive Logistics SAS                             | France                    
|TNT
Automotive Logistics SpA                             | Italy                     
|TNT
Bulgaria Eood                                        | Bulgaria                  
|TNT
Canada Incorporated                                  | Canada                    
|TNT
Capital Investments Limited                          | Hong
Kong                 
|TNT
Carriers, Inc.                                       | U.S.A.                    
|TNT
Central Services Srl                                 | Italy                     
|TNT
China Holdings B.V.                                  | Netherlands               
|TNT
Container Logistics (Proprietary) Limited            | South
Africa              
|TNT
Container Logistics, Inc.                            | U.S.A.                    
|TNT
Container Logistik GmbH                              | Germany                   
|TNT
Contract Logistics Belgium NV/SA                     | Belgium                   
|TNT
Contract Logistics Management B.V.                   | Netherlands               
|TNT
Customs Clearance Service (Japan) Inc.               | Japan                     
|TNT
Danmark A/S                                          | Denmark                   
|TNT
Despatcher Limited                                   | U.K.                      
|TNT
Direct Marketing Services (Shanghai) Company Limited | People's
Republic of China
|TNT
Egypt Limited                                        | Egypt                     
|TNT
Europe Finance B.V.                                  | Netherlands               
|TNT
Europe Limited                                       | U.K.                      
|TNT
European Airlines Limited                            | U.K.                      
|TNT
Express (Austria) GmbH                               | Austria                   
|TNT
Express (Belgium) NV/SA                              | Belgium                   
|TNT
Express (Canada) Ltd.                                | Canada                    
|TNT
Express (Ireland) Limited                            | Ireland                   
|TNT
Express and Logistics Co., Ltd., Beijing             | People's
Republic of China
|TNT
Express Beteiligungsgesellschaft mbH                 | Germany                   
|TNT
Express Brasil Ltda                                  | Brazil                    
|TNT
Express Corporation                                  | South
Korea               
|TNT
Express Enfield Pty. Limited                         | Australia                 
|TNT
Express Finance B.V.                                 | Netherlands               

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|TNT
Express France Snc                                                                  | France              
|--------------------------------------------------------------------------------------- | --------------------
|TNT
Express GmbH                                                                        | Germany             
|TNT
Express Holdings B.V.                                                               | Netherlands         
|TNT
Express Holdings Germany GmbH                                                       | Germany             
|TNT
Express Insurance B.V.                                                              | Netherlands         
|TNT
Express International Snc                                                           | France              
|TNT
Express Luxembourg SA                                                               | Luxembourg          
|TNT
Express N.V.                                                                        | Netherlands
Antilles
|TNT
Express National Snc                                                                | France              
|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 Verwaltungsgesellschaft mbH                                                 | Germany             
|TNT
Express Worldwide (Chile) Carga Ltda                                                | Chile               
|TNT
Express Worldwide (Cambodia) Ltd.                                                   | Cambodia            
|TNT
Express Worldwide (CIS) Limited Liability Company                                   | Russia              
|TNT
Express Worldwide (Cyprus) Limited (in liquidation)                                 | Cyprus              
|TNT
Express Worldwide (Euro Hub) NV/SA                                                  | Belgium             
|TNT
Express Worldwide (HK) Limited                                                      | Hong
Kong           
|TNT
Express Worldwide (Israel) Limited                                                  | Israel              
|TNT
Express Worldwide (Japan) Inc                                                       | Japan               
|TNT
Express Worldwide (M) Sdn Bhd                                                       | Malaysia            
|TNT
Express Worldwide (Namibia) (Proprietary) Limited                                   | Namibia             
|TNT
Express Worldwide (NZ) Limited                                                      | New
Zealand         
|TNT
Express Worldwide (Phils.), Inc.                                                    | Philippines         
|TNT
Express Worldwide (Poland) Sp zoo                                                   | Poland              
|TNT
Express Worldwide (Portugal) Transitarios, Transportes e Servicos Complementares
SA | Portugal            
|TNT
Express Worldwide (Singapore) Private Limited                                       | Singapore           
|TNT
Express Worldwide (South Africa) (Proprietary) Limited                              | South
Africa        
|TNT
Express Worldwide (Spain), S.L.                                                     | Spain               
|TNT
Express Worldwide (Thailand) Co. Limited                                            | Thailand            
|TNT
Express Worldwide (UK) Limited                                                      | U.K.                
|TNT
Express Worldwide (Zimbabwe) (Private) Limited                                      | Zimbabwe            
|TNT
Express Worldwide Eesti AS                                                          | Estonia             

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|TNT
Express Worldwide Franchising Inc.               | U.S.A.        
|---------------------------------------------------- | --------------
|TNT
Express Worldwide Holdings Inc.                  | U.S.A.        
|TNT
Express Worldwide Hungary Kft                    | Hungary       
|TNT
Express Worldwide Investments Limited            | U.K.          
|TNT
Express Worldwide Limited                        | Fiji          
|TNT
Express Worldwide Limited                        | Ireland       
|TNT
Express Worldwide Mexico SA de CV                | Mexico        
|TNT
Express Worldwide N.V.                           | Netherlands   
|TNT
Express Worldwide N.V., Singapore branch         | Singapore     
|TNT
Express Worldwide spol. s.r.o. - Slovakia        | Slovakia      
|TNT
Express Worldwide Vamugyintezo Kft               | Hungary       
|TNT
Express Worldwide, distribucija, d.o.o.          | Slovenia      
|TNT
Express Worldwide, spol. s.r.o. - Czech Republic | Czech
Republic
|TNT
Fashion Distribution B.V.                        | Netherlands   
|TNT
Fashion Forwarding B.V.                          | Netherlands   
|TNT
Fashion Group B.V.                               | Netherlands   
|TNT
Fashion Group France Sas                         | France        
|TNT
Fashion Logistics B.V.                           | Netherlands   
|TNT
Fashion Support B.V.                             | Netherlands   
|TNT
Finance B.V.                                     | Netherlands   
|TNT
Finance Pty. Limited                             | Australia     
|TNT
Forwarding Holdings Aktiebolag                   | Sweden        
|TNT
France Holding Snc                               | France        
|TNT
Freight Management (Amsterdam) B.V.              | Netherlands   
|TNT
Freight Management (Argentina) SA                | Argentina     
|TNT
Freight Management (Australia) Pty. Limited      | Australia     
|TNT
Freight Management (Bangladesh) Limited          | Bangladesh    
|TNT
Freight Management (Belgium) NV/SA               | Belgium       
|TNT
Freight Management (Canada) Limited              | Canada        
|TNT
Freight Management (Chile) SA                    | Chile         
|TNT
Freight Management (Denmark) A/S                 | Denmark       
|TNT
Freight Management (Districenter) B.V.           | Netherlands   
|TNT
Freight Management (Europoort) B.V.              | Netherlands   
|TNT
Freight Management (Finland) Oy                  | Finland       
|TNT
Freight Management (France) SAS                  | France        
|TNT
Freight Management (Germany) GmbH                | Germany       

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|TNT
Freight Management (Italy) SpA                            | Italy                     
|------------------------------------------------------------- | --------------------------
|TNT
Freight Management (Korea) Limited                        | South
Korea               
|TNT
Freight Management (Malyasia) Sdn Bhd                     | Malaysia                  
|TNT
Freight Management (New Zealand) Limited                  | New
Zealand               
|TNT
Freight Management (Norway) AS                            | Norway                    
|TNT
Freight Management (Rotterdam) B.V.                       | Netherlands               
|TNT
Freight Management (Singapore) Private Limited            | Singapore                 
|TNT
Freight Management (Sweden) Aktiebolag                    | Sweden                    
|TNT
Freight Management (Taiwan) Limited                       | Taiwan
- Republic of China
|TNT
Freight Management (Thailand) Limited                     | Thailand                  
|TNT
Freight Management (UAE) L.L.C.                           | United
Arab Emirates      
|TNT
Freight Management (UK) Limited                           | U.K.                      
|TNT
Freight Management (USA), Inc.                            | U.S.A.                    
|TNT
Freight Management Holding Aktiebolag                     | Sweden                    
|TNT
Freight Management Holdings B.V.                          | Netherlands               
|TNT
Gerenciamento de Fretes do Brasil Ltda                    | Brazil                    
|TNT
Global Express Limited                                    | Bermuda                   
|TNT
Global Express SpA                                        | Italy                     
|TNT
Headoffice B.V.                                           | Netherlands               
|TNT
Holdings (Benelux) B.V.                                   | Netherlands               
|TNT
Holdings (Deutschland) GmbH                               | Germany                   
|TNT
Holdings (UK) Limited                                     | U.K.                      
|TNT
Holdings B.V.                                             | Netherlands               
|TNT
Holdings Limitada                                         | Brazil                    
|TNT
India Private Limited                                     | India                     
|TNT
Informations Systeme GmbH                                 | Germany                   
|TNT
Ingatlanhasznosito Kft.                                   | Hungary                   
|TNT
Innight B.V.                                              | Netherlands               
|TNT
Innight NV/SA                                             | Belgium                   
|TNT
International Express Tasimacilik Ticaret Limited Sirketi | Turkey                    
|TNT
International Mail Holdings B.V.                          | Netherlands               
|TNT
Latvia Sia                                                | Latvia                    
|TNT
Logistica SA de CV                                        | U.S.A.                    
|TNT
Logistics (Australia) Pty Limited                         | Australia                 
|TNT
Logistics (Malaysia) Sdn Bhd                              | Malaysia                  
|TNT
Logistics (Thailand) Limited                              | Thailand                  

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|TNT
Logistics Argentina S.A.                            | Argentina                 
|------------------------------------------------------- | --------------------------
|TNT
Logistics Asia Private Limited                      | Singapore                 
|TNT
Logistics Austria GmbH                              | Austria                   
|TNT
Logistics Central and Eastern Europe GmbH           | Austria                   
|TNT
Logistics Company Limited Shanghai                  | People's
Republic of China
|TNT
Logistics Corporation                               | U.S.A.                    
|TNT
Logistics España I SA                               | Spain                     
|TNT
Logistics France Sarl                               | France                    
|TNT
Logistics GmbH                                      | Germany                   
|TNT
Logistics Group Inc.                                | U.S.A.                    
|TNT
Logistics Holding Italy Srl                         | Italy                     
|TNT
Logistics Holdings B.V.                             | Netherlands               
|TNT
Logistics Holdings SAS                              | France                    
|TNT
Logistics Holdings UK Limited                       | U.K.                      
|TNT
Logistics India Private Limited                     | India                     
|TNT
Logistics Innight GmbH & Co. KG                     | Germany                   
|TNT
Logistics Innight Holding GmbH                      | Germany                   
|TNT
Logistics Innight Management GmbH                   | Germany                   
|TNT
Logistics International Trading (Shanghai) Co. Ltd. | People's
Republic of China
|TNT
Logistics Italia SpA                                | Italy                     
|TNT
Logistics Korea Chusik Hoesa                        | South
Korea               
|TNT
Logistics Limitada                                  | Brazil                    
|TNT
Logistics Netherlands B.V.                          | Netherlands               
|TNT
Logistics NI Limited                                | U.K.                      
|TNT
Logistics North America Inc.                        | U.S.A.                    
|TNT
Logistics Poland Sp zoo                             | Poland                    
|TNT
Logistics Puerto Rico, Inc.                         | Puerto
Rico               
|TNT
Logistics Servicios de Mexico SA de CV              | Mexico                    
|TNT
Logistics Singapore Private Limited                 | Singapore                 
|TNT
Logistics Slovakia, s.r.o.                          | Slovakia                  
|TNT
Logistics Subirats SL                               | Spain                     
|TNT
Logistics Switzerland AG                            | Switzerland               
|TNT
Logistics UK Limited                                | U.K.                      
|TNT
Logistika Spol sro                                  | Czech
Republic            
|TNT
Logisztikai Kereskedelmi es Szolgaltato Kft         | Hungary                   
|TNT
Lojistik ve Dagitim Hizmetleri A.S.                 | Turkey                    

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|TNT
Mail Italia Srl                                                 | Italy                     
|------------------------------------------------------------------- | --------------------------
|TNT
Mail UK Limited                                                 | U.K.                      
|TNT
Management (Bahrain) EC                                         | Bahrain                   
|TNT
Management (USA) Inc.                                           | U.S.A.                    
|TNT
Materials Handling B.V.                                         | Netherlands               
|TNT
Materials Handling Pty. Limited                                 | Australia                 
|TNT
Materials Handling Pty. Limited, New Zealand branch (Pallecons) | New
Zealand               
|TNT
Mehrwertlogistik GmbH                                           | Germany                   
|TNT
N.V.                                                            | Netherlands               
|TNT
N.V., Beijing office                                            | People's
Republic of China
|TNT
Nederland B.V.                                                  | Netherlands               
|TNT
Nederland B.V., Portuguese branch                               | Portugal                  
|TNT
New Zealand Limited                                             | New
Zealand               
|TNT
Newco Limited                                                   | U.K.                      
|TNT
NN1 Limited                                                     | U.K.                      
|TNT
Nopri Logistics NV/SA                                           | Belgium                   
|TNT
Norden A/S                                                      | Denmark                   
|TNT
Norge A/S                                                       | Norway                    
|TNT
Offshore Islands Express Limited                                | U.K.                      
|TNT
Overnite (M) Sdn Bhd                                            | Malaysia                  
|TNT
Participações Limitada                                          | Brazil                    
|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                      | Germany                   
|TNT
Post Direktwerbung Süd GmbH                                     | Germany                   
|TNT
Post Direktwerbung Südwest GmbH                                 | Germany                   
|TNT
Post Holding GmbH                                               | Germany                   
|TNT
Post Italia SpA                                                 | Italy                     
|TNT
Post Pakketservice België NV/SA                                 | Belgium                   
|TNT
Post Regioservice GmbH                                          | Germany                   
|TNT
Production Logistics SA                                         | Spain                     
|TNT
Proprietary Limited                                             | U.K.                      
|TNT
Real Estate B.V.                                                | Netherlands               
|TNT
Real Estate Development B.V.                                    | Netherlands               
|TNT
Retail Express Limited                                          | Ireland                   

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|TNT
Romania Srl                                            | Romania                   
|---------------------------------------------------------- | --------------------------
|TNT
Sameday SpA                                            | Italy                     
|TNT
Services SpA                                           | Italy                     
|TNT
Shared Services Centre Pty. Limited                    | Australia                 
|TNT
Shipping & Development Pty. Limited                    | Australia                 
|TNT
Shipping (Aust.) Pty. Limited                          | Australia                 
|TNT
Shipping International B.V.                            | Netherlands               
|TNT
Side Snc                                               | France                    
|TNT
Skypak (Hellas) EPE                                    | Greece                    
|TNT
Skypak do Brasil Limitada                              | Brazil                    
|TNT
Skypak Finance B.V.                                    | Netherlands               
|TNT
Skypak Finance B.V., Portuguese branch                 | Portugal                  
|TNT
Skypak Holdings B.V.                                   | Netherlands               
|TNT
Skypak Holdings N.A.N.V.                               | Netherlands
Antilles      
|TNT
Skypak International (Bahrain) WLL                     | Bahrain                   
|TNT
Skypak International (Ireland) Limited                 | Ireland                   
|TNT
Skypak International (Netherlands) B.V.                | Netherlands               
|TNT
Skypak International (Netherlands) B.V., Taiwan branch | Taiwan
- Republic of China
|TNT
Skypak International (NZ) Limited                      | New
Zealand               
|TNT
Skypak Sinotrans Limited                               | People's
Republic of China
|TNT
Spare Snc                                              | France                    
|TNT
SPC Limited                                            | U.K.                      
|TNT
Suomi Oy                                               | Finland                   
|TNT
Superannuation Pty. Limited                            | Australia                 
|TNT
Sverige Aktiebolag                                     | Sweden                    
|TNT
Swiss Post AG                                          | Switzerland               
|TNT
TDI Consortium                                         | Italy                     
|TNT
Transport (Europe) PLC                                 | U.K.                      
|TNT
Transport (N.I.) Limited                               | U.K.                      
|TNT
Transport Group Inc.                                   | U.S.A.                    
|TNT
Transport International B.V.                           | Netherlands               
|TNT
Transport Limited                                      | U.K.                      
|TNT
UK Limited                                             | U.K.                      
|TNT
USA Inc.                                               | U.S.A.                    
|TNT
Worldwide Air Express (U.K.) Limited                   | U.K.                      
|TNT-Vietrans
Express Worldwide (Vietnam) Company Limited   | Vietnam                   

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|Trans
Melanesian Airways Limited                     | Papua
New Guinea          
|---------------------------------------------------- | --------------------------
|Transports
Pierre Mendy Sarl                         | France                    
|Traspex
Sud Srl                                      | Italy                     
|UAB
TNT                                              | Lithuania                 
|United
Consolidation Service Aktiebolag              | Sweden                    
|Via
Acquisitie B.V.                                  | Netherlands               
|Vines
Services Private Limited (in liquidation)      | Singapore                 
|Vines
Services Sdn Bhd (in liquidation)              | Malaysia                  
|VIP
Airfreight NZ Limited                            | New
Zealand               
|VIP
Airfreight Pty Limited                           | Australia                 
|VIP
Logistics Australasia Limited                    | New
Zealand               
|VIP
Logistics Pty Limited                            | Australia                 
|Wilson
(F.E.) Limited                                | Hong
Kong                 
|Wilson
Australia Holdings Pty. Limited               | Australia                 
|Wilson
Denmark Holding A/S                           | Denmark                   
|Wilson
Freight (Far East) Limited                    | Hong
Kong                 
|Wilson
Freight Shanghai Limited                      | People's
Republic of China
|Wilson
Logistics de Venezuela, C.A. (in liquidation) | Venezuela                 
|Wilson
Logistics Holdings USA, Inc.                  | U.S.A.                    
|Wilson
Logistics Limited - Bahamas (in liquidation)  | Bahamas                   
|Wilson
Overseas Aktiebolag                           | Sweden                    
|Wilson
Sandhu Logistics (India) Private Limited      | India                     
|XP International
B.V.                                | Netherlands               

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Exhibit
  12.1

I,
M.P. Bakker, certify that:

|1. | I
      have reviewed this annual report on Form 20-F of TNT N.V., a company incorporated
      under the laws of the Netherlands;                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                          
|2. | Based
      on my knowledge, this annual report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this report;
|   |                                                                                                                                                                                                                                                                                                                                          
|3. | Based
      on my knowledge, the financial statements, and other financial information
      included in this annual report, fairly present in all material respects
      the financial condition, results of operations and cash flows of the company
      as of, and for, the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                                          
|4. | The
      company's other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                                  

| |     |                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | (a) | designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the company, including its consolidated
      subsidiaries, is made known to us by others within those entities, particularly
      during the period in which this report is being prepared; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | (b) | evaluated the effectiveness of the company's disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period covered
      by this report based on such evaluation.                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                         | 

|5. | The
      company's other certifying officer and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the company's
      auditors and the audit committee of the company's board of directors (or
      persons performing the equivalent function):
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                                                                                                                                                                                          | 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | (a) | all significant deficiencies and material weaknesses in the design or operation
      of internal control over financial reporting which are reasonably likely
      to adversely affect the company's ability to record, process, summarize
      and report financial information; and
| |     |                                                                                                                                                                                                                                                                                          | 
| | (b) | any fraud, whether or not material, that involves management or other employees
      who have a significant role in the company's internal control over financial
      reporting.                                                                                                     

Date:
24 February, 2006

/s/ M.P. Bakker

Chief
Executive Officer

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Exhibit
  12.2

I,
J.G. Haars, certify that:

|1, | I
      have reviewed this annual report on Form 20-F of TNT N.V., a company incorporated
      under the laws of the Netherlands;                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                          
|2. | Based
      on my knowledge, this annual report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this report;
|   |                                                                                                                                                                                                                                                                                                                                          
|3. | Based
      on my knowledge, the financial statements, and other financial information
      included in this annual report, fairly present in all material respects
      the financial condition, results of operations and cash flows of the company
      as of, and for, the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                                          
|4. | The
      company's other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-15(e) and 15d-15(e) for the company and have:                                                                                                   

| |     |                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | (a) | designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the company, including its consolidated
      subsidiaries, is made known to us by others within those entities, particularly
      during the period in which this report is being prepared; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | (b) | evaluated the effectiveness of the company's disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period covered
      by this report based on such evaluation.                                                                                                         

|   |                                                                                                                                                                                                                                                                                                               | 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|5. | The
      company's other certifying officer and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the company's
      auditors and the audit committee of the company's board of directors (or
      persons performing the equivalent function):

| |     |                                                                                                                                                                                                                                                                                                | 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | (a) | all
      significant deficiencies and material weaknesses in the design or operation
      of internal control over financial reporting which are reasonably likely
      to adversely affect the company's ability to record, process, summarize
      and report financial information; and
| |     |                                                                                                                                                                                                                                                                                                | 
| | (b) | any fraud, whether or not material, that involves management or other employees
      who have a significant role in the company's internal control over financial
      reporting.                                                                                                           

Date:
24 February, 2006

/s/ J.G. Haars

Chief
Financial Officer

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Exhibit
  13.1

CERTIFICATION
  PURSUANT TO 18 U.S.C.
  SECTION 1350AS
  ADOPTED PURSUANT TO SECTION
  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, 2005 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: 24 February, 2006

/s/ M.P. Bakker

Chief Executive Officer

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Exhibit
  13.2

CERTIFICATION
  PURSUANT TO 18 U.S.C.
  SECTION 1350
  AS ADOPTED PURSUANT TO SECTION
  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, 2005 as filed with the Securities and Exchange Commission (the "Report"),
I, J.G. Haars, 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: 24 February, 2006

/s/ J.G. Haars

Chief Financial Officer

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Exhibit
  15.1

CONSENT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby
  consent to the incorporation by reference in the Registration Statement on Form
  F-3 (No. 333-123342) of TNT N.V. of our report dated 24 February 2006 relating
  to the financial statements as of and for the year ended 31 December 2005, which
  appears in this Form 20-F.



Amsterdam,
  27 February 2006
  PricewaterhouseCoopers Accountants N.V.

Drs M. de Ridder
  RA



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