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.

Investments in group companies includes our investments in our discontinued logistics business.

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:

Our 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 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.

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.

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 SERVICES
At present, we are not allowed to charge value added tax on postal items forming part of the mandatory postal services. The flip side of this is that for mandatory postal services we can not deduct the VAT amounts paid on our purchases of services and goods related to the mandatory services. We are required to charge VAT on all services not included in the mandatory 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 SERVICES
Regarding 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, non­discriminatory 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.

• 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. 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.

Board of Management

M.P. Bakker (Chairman)
J.G. Haars
H.M. Koorstra
D.G. Kulik
M.C. Lombard