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ANNUAL฀REPORT฀2005

Table of contents

  • Page 1
    ANNUAL฀REPORT฀2005

  • Page 2

  • Page 3
    Find฀your฀way฀ the฀easy฀way

  • Page 4
    ...฀sources฀such฀ as฀specialised฀research฀institutes,฀industry฀and฀dealer฀panels฀in฀combination฀ with฀management฀estimates.฀Where฀full-year฀information฀regarding฀2005฀is฀ not฀yet฀available฀to฀TomTom,฀those฀statements฀may฀also฀be฀based฀on...

  • Page 5
    ... 5 Financial฀highlights฀ Chief฀Executive's฀statement฀ Company฀Profile฀ Management฀Board฀and฀Supervisory฀Board฀ Supervisory฀Board฀report฀ Corporate฀governance฀ Financial฀review฀ Management฀Board's฀report฀on฀risk฀management฀and฀internal฀control...

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  • Page 9
    ...employees฀ â,¬à¸€millions in฀â,¬à¸€millions 800 700 600 500 400 300 200 100 0 200 150 100 50 0 ฀ 2002฀ 2003฀ 2004฀ 2005 Revenue ฀ 2002฀ 2003฀ 2004฀ 2005 Operating฀Income in฀â,¬à¸€millions 150 120 90 60 30 0 350 300 250 200 150 100 50 ฀ 2002฀ 2003฀ 2004...

  • Page 10
    ...will฀see฀new฀ versions฀of฀the฀TomTom฀GO฀and฀together฀with฀the฀TomTom RIDER,฀TomTom฀GO's฀counterpart฀for฀the฀motorcycle,฀ and฀our฀entry฀level฀product฀the฀TomTom฀ONE,฀we฀will฀ continue฀to฀address฀peoples'฀navigation฀needs.฀We฀have...

  • Page 11
    With฀TomTom฀we฀are฀ on฀the฀eve฀of฀the฀mass฀ acceptance฀of฀personal฀ navigation฀solutions.

  • Page 12

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  • Page 14
    ...-line฀ retailers฀and฀through฀the฀company's฀own฀website฀ (www.tomtom.com).฀ In฀2005฀we฀sold฀our฀products฀in฀20฀countries฀and฀in฀ 32฀languages.฀We฀have฀offices฀in฀11฀locations฀in฀Europe,฀ Asia,฀North฀America฀and฀Australia. History In...

  • Page 15
    ...฀to฀turn฀smartphones฀into฀ in-car฀navigators. In฀February฀2005฀Marina฀Wyatt,฀a฀CFO฀with฀listed฀ company฀experience฀with฀Colt฀Telecom฀and฀Psion,฀joined฀ the฀company฀and฀helped฀TomTom฀to฀go฀public฀on฀the฀ Amsterdam฀Stock฀Exchange...

  • Page 16
    ...navigation฀ products฀that฀are฀portable,฀and฀fit฀for฀purpose฀such฀as฀ the฀TomTom฀GO,฀TomTom฀ONE฀and฀TomTom฀RIDER;฀ and •฀฀ Navigation฀solutions฀for฀PDAs฀and฀smartphones฀-฀ such฀as฀TomTom฀NAVIGATOR฀software฀for฀PDAs฀and฀ TomTom...

  • Page 17
    ...฀box;฀ these฀are฀the฀TomTom฀GO฀family,฀the฀TomTom฀ONE฀and฀ the฀TomTom฀RIDER.฀TomTom฀also฀provides฀navigation฀ software฀products฀which฀integrate฀with฀third฀party฀ devices;฀the฀TomTom฀Navigator฀software฀for฀PDAs฀and฀ TomTom฀MOBILE...

  • Page 18
    ... high฀quality฀and฀easy฀to฀use฀personal฀navigation฀products฀ with฀broad฀consumer฀appeal.฀Customer฀support฀deals฀ with฀users'฀questions฀and฀comments฀and฀addresses฀ users฀in฀nine฀different฀languages.฀These฀contacts฀are฀ extremely฀valuable...

  • Page 19
    ...have฀grown.฀In฀software฀and฀ hardware฀development฀we฀are฀building฀our฀organisation฀ around฀development฀centres฀in฀several฀locations฀ including฀Taipei,฀London,฀Edinburgh,฀Leipzig฀and฀ Amsterdam.฀Logistics,฀Customer฀Support,฀Finance฀and฀ ICT...

  • Page 20
    ...,฀planning฀and฀reporting.฀The฀company,฀ which฀is฀based฀in฀Leipzig,฀Germany,฀is฀a฀leading฀player฀in฀ offering฀so-called฀'track฀&฀trace'฀products฀and฀services.฀ Growing฀convergence฀between฀track฀&฀trace฀and฀ navigation฀solutions฀makes...

  • Page 21
    TomTom฀WORK, Plan฀your฀day฀the฀easy฀way.

  • Page 22

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  • Page 24
    ...Chief฀Executive฀Officer.฀Harold฀studied฀Economics฀ at฀Amsterdam฀University,฀and฀started฀his฀career฀ with฀a฀venture฀capital฀firm.฀He฀founded฀Psion฀ Netherlands฀BV฀in฀1989฀as฀a฀joint฀venture฀with฀ Psion฀Plc,฀and฀co-founded฀TomTom฀in...

  • Page 25
    ...฀vice-president฀for฀ brand฀development฀for฀one฀of฀the฀company's฀largest฀ Dutch฀food฀subsidiaries.฀...London฀and฀in฀the฀US,฀and฀six฀ years฀as฀Group฀Financial฀Director฀of฀Psion฀Plc.฀ Marina฀was฀then฀appointed฀Chief฀Financial฀Officer...

  • Page 26
    ...Soitex฀SA,฀ST฀...Europe... Netherlands฀...,฀a฀company฀active...2005,฀and฀his฀current฀term฀runs฀until฀2009.฀ Mr.฀Browne฀earned฀a฀Masters฀in฀Business฀Administration฀ from฀Trinity฀College฀in฀Dublin...Officer฀and฀Director฀of฀New฀Skies฀Satellites฀BV...

  • Page 27
    ...annual฀report. Remuneration฀Report Application฀in฀2005 In฀2005,฀the฀remuneration฀of฀the฀Management฀Board฀ consisted฀of฀(i)฀a฀fixed฀remuneration฀component฀(base฀ salary...Company's฀annual฀audited฀profit฀before฀tax฀and฀a฀relatively฀ low฀annual...

  • Page 28
    ...฀Annual฀Report฀for฀2005฀that฀are฀separate฀to฀ this฀annual฀report.฀This฀annual฀report฀includes฀the฀ Consolidated฀Financial฀Statements฀only.฀The฀Consolidated฀ and฀Company฀Annual฀Report฀for฀2005฀is฀available฀at฀the฀ Company's฀offices...

  • Page 29
    ...given฀period฀of฀ the฀2005฀financial...Company฀in฀meeting฀ its฀responsibilities฀in฀respect฀of฀the฀following฀areas:฀ •฀ ฀ the฀integrity฀of฀annual฀and฀interim฀financial฀reporting...reviews...Officer.฀Risk฀management฀and฀internal฀control฀ reporting...

  • Page 30
    ...฀subject฀to฀the฀ approval฀of฀the฀Company's฀shareholders฀at฀the฀Annual฀ General฀shareholders'฀Meeting฀(AGM).฀ Deloitte฀Accountants฀BV฀have฀expressed฀their฀ willingness฀to฀continue฀in฀office฀and฀resolutions฀ proposing฀their฀re-appointment...

  • Page 31
    ...Amsterdam฀ on฀27฀May฀2005.฀Prior฀to฀that฀date฀the฀Dutch฀Corporate฀ Governance฀Code฀was฀not฀applicable฀to฀us฀as฀we฀were฀a฀ private฀company.฀฀Given฀the฀relatively฀short฀period...personal฀navigation฀is... ฀ annual฀base฀salary,฀including...

  • Page 32
    ... more฀meaningful฀after฀the฀Annual฀Report฀2005฀has฀ been฀discussed฀in...Officer฀and฀a฀Chief฀Operating฀Officer.฀Each฀ member฀of฀the฀Management฀Board฀is฀appointed฀for฀a฀ maximum฀of฀four฀years,฀which฀can฀be฀renewed฀for฀ another฀period...

  • Page 33
    ...฀Management฀Board฀is฀supported฀by฀our฀senior฀ management฀team.฀The฀senior฀management฀team฀consists฀of: Corinne฀Goddijn-Vigreux,฀Sales฀Director Peter-Frans฀Pauwels,฀Chief฀Technical฀Officer Pieter฀Geelen,฀Technical฀Development฀Director Mark฀Gretton...

  • Page 34
    ...TomTom฀NV฀included฀in฀this฀ annual฀report. Conflict฀of฀interest Members฀of฀the฀Supervisory฀Board฀must฀report... Andrew฀Browne฀ Date฀of฀first฀appointment฀ 13฀May฀2005฀ 13฀May฀2005฀ 13฀May฀2005฀ End฀of฀first฀term฀ Date฀of฀AGM฀2007฀...

  • Page 35
    ...our฀consolidated฀financial฀statements฀in฀this฀ annual฀report.฀ Issue฀of฀ordinary฀shares฀and฀pre...for฀a฀subsequent฀period฀of฀up฀ to฀two฀years.฀ Dutch฀company฀law฀and฀... to฀our฀employees,฀(ii)฀in฀return฀for฀non-cash฀consideration,฀ or...

  • Page 36
    ...in฀ this฀annual฀report,฀the฀issue฀of฀preference฀shares฀by฀us฀ to฀Stichting฀Continuïteit฀TomTom฀(the฀"Foundation")฀...are฀appointed฀ by฀the฀Board฀of฀the฀Foundation. In฀2005,฀the฀members฀of฀the฀Management฀Board฀of฀the฀ Foundation฀were...

  • Page 37
    ...฀a฀limited฀liability฀ company฀incorporated฀under฀Dutch...in฀the฀opinion฀of฀the฀...of฀ ordinary฀shares,฀for฀a฀period฀of฀two฀years฀ending...on฀Euronext฀Amsterdam฀on฀27฀May฀2005.฀These฀...TomTom฀(the฀"Foundation"),฀established฀on฀26฀May฀ 2005...

  • Page 38
    ...the฀ Company฀as฀required฀by฀the฀Listing฀Requirements฀of฀the฀ stock฀market฀of฀Euronext฀Amsterdam. For฀details฀about฀the฀composition฀of฀the฀Board฀of฀the฀ Foundation฀see฀the฀corporate฀governance฀section฀ included฀in฀this฀annual฀report.

  • Page 39

  • Page 40

  • Page 41

  • Page 42
    ...of฀the฀personal฀navigation฀category฀meant฀ that฀volumes฀and฀revenues฀increased฀substantially.฀The฀ majority฀of฀our฀sales฀were฀made฀through฀retail฀channels. Revenue฀ Gross฀profit฀ %฀of฀sales฀ Operating฀profit฀ %฀of฀sales฀ Net฀profit...

  • Page 43
    ...and฀development฀teams฀in฀Amsterdam,฀ London,฀Taipei,฀Leipzig฀and฀Edinburgh.฀In฀accordance฀ with฀IAS฀38฀-฀Intangible฀Assets,฀we฀capitalise฀internal฀ software฀development฀costs฀arising฀from฀the฀creation฀ and฀update฀of฀the฀company's฀core...

  • Page 44
    ...฀to฀protect฀its฀cost฀of฀sales฀line฀from฀ sudden฀movements฀in฀the฀US฀dollar฀relative฀to฀the฀euro฀ and฀it฀also฀does฀the฀same฀for฀pound฀sterlingdenominated฀revenues฀arising฀in฀the฀UK.฀TomTom฀does฀ not฀hedge฀translation฀risk...

  • Page 45
    ... including฀the฀euro,฀the฀pound฀sterling฀and฀the฀US฀dollar.฀ TomTom฀currently฀sells฀its฀products฀in฀Europe,฀Australia,฀ the฀United฀States฀and฀Canada,฀and฀our฀TomTom฀GO฀ product฀is฀manufactured฀in฀Taiwan฀and฀China.฀Currently,฀ the...

  • Page 46

  • Page 47

  • Page 48
    ...Company฀views฀the฀careful฀management฀of฀risk฀as฀ an฀important฀management฀activity.฀The฀Board฀reviews...Company฀embeds฀risk฀management฀into฀periodic...subject฀to฀ regular฀review฀as฀the฀business฀...comprehensive฀reporting฀and...management฀reporting; ...

  • Page 49
    ...annually฀...Officer฀to฀provide฀reasonable฀assurance฀ regarding฀the฀reliability฀of฀management฀and฀financial฀ reporting...฀Company...review,฀and฀there฀is฀currently฀no฀indication฀ they฀will฀not฀continue฀to฀do฀so฀in฀the฀forthcoming฀period. Amsterdam...

  • Page 50
    ...฀technology฀development฀ resources฀and฀focusing฀on฀differential฀benefits฀such฀as฀ the฀"ease฀of฀use"฀of฀our฀products. Sales฀price฀erosion฀risk The฀sales฀prices฀of฀TomTom's฀products฀are฀primarily฀ affected฀by฀the฀competition฀the฀company...

  • Page 51
    ...฀is฀derived฀from฀integrated฀ personal฀navigation฀devices฀consisting฀of฀the฀family฀of฀ GO฀products,฀TomTom฀ONE฀and฀RIDER.฀If฀new฀product฀ implementations฀and฀attempts฀to฀further฀diversify฀our฀ product฀range฀further฀do฀not฀achieve...

  • Page 52
    ...on฀demand฀for฀our฀products.฀The฀market฀for฀ personal฀navigation฀products฀is฀still฀developing,฀with฀low฀ penetration฀levels...production฀of฀the฀TomTom฀GO,฀ONE฀and฀RIDER฀hardware฀ which฀account฀for฀the฀majority฀of฀hardware฀sales.฀ TomTom...

  • Page 53
    ...฀of฀TomTom฀NV฀included฀in฀this฀ annual฀report. Product฀quality฀and฀warranty฀risks We฀are฀subject฀to฀risks฀resulting฀from฀defects฀in฀our฀ products฀as฀well฀as฀returns฀and฀warranty฀expenses.฀ We฀develop฀complex฀hardware฀and฀software...

  • Page 54
    ฀ Financial฀Statements for฀the฀year฀ended฀ 31฀December฀2005 TomTom฀NV

  • Page 55
    Index฀to฀Financial฀Statements 55 Auditors'฀report฀ Consolidated฀statements฀of฀income฀of฀TomTom฀NV Consolidated฀balance฀sheets฀of฀TomTom฀NV Consolidated฀statements฀of฀cash฀flows฀of฀TomTom฀NV Consolidated฀statements฀of฀changes฀in฀stockholders...

  • Page 56
    ...฀financial฀statements฀of฀ TomTom฀NV,฀Amsterdam,฀for฀the฀year฀ended฀December฀ 31,฀2005.฀These฀consolidated฀financial฀statements฀are฀ the฀responsibility฀of฀the฀company's฀management.฀ Our฀responsibility฀is฀to฀express฀an฀opinion฀on฀these...

  • Page 57
    ...฀of฀income฀of฀TomTom฀NV฀ for฀the฀years฀ended฀December฀31 57 ฀ Notes฀ 2004฀ 2005 (in฀thousands฀of฀euros฀unless฀otherwise฀stated) Revenue฀฀ Cost฀of฀sales฀฀ ฀ Gross฀profit฀฀ ฀ Research฀and฀development฀expenses฀฀ Marketing...

  • Page 58
    Consolidated฀balance฀sheets฀of฀TomTom฀NV฀as฀of฀December฀31 58 ฀ Notes฀ 2004฀ 2005 (in฀â,¬à¸€thousands) Non-current฀assets Intangible฀assets฀฀ Property,฀plant฀and฀equipment฀ ฀ Total฀non-current฀assets฀฀ ฀ Current฀assets Inventories฀ ...

  • Page 59
    ...of฀TomTom฀NV฀ for฀the฀years฀ended฀December฀31 59 ฀ Notes฀ 2004฀ 2005 (in...period฀฀ ฀ 18 43,437฀ 836฀ 292฀ -451฀ 324฀ 2,511฀ -11,184฀ -23,677฀ 32,376฀ 44,464฀ 169฀ -8,387฀ 36,246฀ 195,077 1,844 1,579 8,679 20,888 8,974 -89,782 -121,710...

  • Page 60
    ...TomTom...฀at฀ 31฀December฀2005฀ 18฀ 0฀ ...Company,฀increased฀ by฀legal฀and฀statutory฀reserves. Legal฀reserves Legal฀reserves฀are฀non-distributable฀reserves฀that฀have฀ been฀recorded฀for฀the฀amount฀of฀capitalised฀internal฀ software฀development...

  • Page 61
    ...13฀May฀2005. The฀Company฀has฀its฀statutory฀seat฀in฀Amsterdam,฀the฀ Netherlands.฀The฀Company฀has฀its฀headquarters฀in฀ Amsterdam,฀the฀Netherlands.฀The฀activities฀of฀the฀ Company฀include฀the฀development฀and฀sale฀of฀navigation฀ solutions...

  • Page 62
    ...฀ TomTom฀International฀BV฀ TomTom฀Sales฀BV฀ TomTom฀Inc.฀ TomTom฀Software฀Ltd.฀ TomTom฀Asia฀Ltd.฀ Drivetech฀Inc.฀ Datafactory฀AG฀฀ Country฀of incorporation฀and฀ residence฀ NL฀ NL฀ US฀ UK฀ TA฀ TA฀ DE฀ Place฀of฀ residence฀ Amsterdam...

  • Page 63
    ...Company's฀primary฀activities฀are฀denominated฀in฀ euros.฀Accordingly,฀the฀Company...consolidation฀purposes,฀the฀Company฀classifies฀its฀...฀leases.฀The฀Company฀has฀not฀...USD฀(US฀Dollar)฀ GBP฀(Great฀Britain฀Pound)฀ NTD฀(New฀Taiwan฀Dollar)฀ Rate...

  • Page 64
    ...฀are฀marked฀again฀to฀fair฀value฀at฀ subsequent฀reporting฀dates.฀Changes฀in฀the฀fair฀value฀of฀ derivative...฀on฀a฀straight-line฀basis฀over฀the฀ vesting฀period,฀based฀on฀the฀Company's฀estimate฀of฀ shares฀that฀will฀eventually฀vest.฀...

  • Page 65
    ...have฀been฀eliminated฀on฀ consolidation. Intangible฀assets Development฀costs Internally฀generated฀software฀development฀costs฀arising฀ from฀the฀creation฀and฀update฀of฀the฀Company's฀core฀ software฀technology,฀are฀recognised฀as฀an฀asset฀only฀if...

  • Page 66
    ...At฀each฀balance฀sheet฀date฀the฀Company฀reviews฀the฀ carrying฀amounts฀of฀its฀...฀and฀assembly฀and฀conversion฀to฀ finished฀products.฀It฀excludes฀borrowing฀costs.฀The฀cost฀...฀of฀completion฀ and฀direct฀sales฀costs. Trade฀receivables Trade...

  • Page 67
    ...฀is฀material.฀ The฀Company฀provides฀for฀warranty฀claims฀based฀on฀ historical฀and฀estimated฀return฀rates฀per฀product฀line฀and฀ estimated฀average฀repair฀costs.฀Warranty฀costs฀are฀ recorded฀within฀cost฀of฀sales. Other฀provisions฀are...

  • Page 68
    ...฀line฀being฀that฀of฀personal฀navigation฀solutions.฀ The฀Company฀generates฀sales฀across฀different฀geographical฀regions. Revenue฀ (in฀â,¬à¸€thousands) 2004฀ 186,795฀ 5,634฀ 192,429฀ 2005 677 ,711 42,320 720,031 Europe฀ North฀America฀ Total฀ The...

  • Page 69
    ...sales The฀Company's฀cost฀of฀sales฀consists฀of฀material฀costs฀ for฀goods฀sold฀to฀customers,฀royalty฀expenses฀for฀map฀ software...31฀ December฀2005฀amounted฀to...period฀of฀employment.฀These฀contributions฀are฀ recognised฀in฀the฀period...

  • Page 70
    ...฀ (in฀â,¬) ฀ Salary฀ ฀ Bonus฀ Other฀ emoluments฀ Total remuneration 2005 Harold฀Goddijn฀ Alexander฀...with฀the฀terms฀of฀her฀employment฀contract฀the฀Chief฀ Financial฀Officer฀received฀a฀success฀fee฀of฀£500,000฀(gross)฀on฀ completion฀of...

  • Page 71
    ...฀ 3,500,018฀ 1,999,992฀ 5,500,010 Overview฀of฀remuneration฀of฀members฀of฀the฀Supervisory฀Board Salary฀ (in฀â,¬) 2005 Benno฀Hoogendoorn฀(Chairman)฀(May฀-฀September)฀ Andrew฀Browne฀฀ Guy฀Demuynck฀ Doug฀Dunn฀(Deputy฀Chairman)฀ Total฀ 20...

  • Page 72
    ... 2004฀ 2005 (in฀â,¬à¸€thousands) Personnel฀expenses฀-฀salaries฀ Personnel฀...฀granted฀in฀2003฀was฀assumed฀by฀the฀ Company฀in฀2004฀on฀behalf฀of฀the฀employees.฀The...)฀and฀within฀research฀and฀development฀ expenses฀(â,¬à¸€0.2฀million)฀on฀the...

  • Page 73
    ...exchange฀contracts฀to฀purchase฀US฀Dollars฀in฀order฀ to฀pay฀...contracts฀at฀the฀end฀of฀each฀period฀whether฀ or฀not฀they฀have...฀unrealised฀net฀gains. In฀2005,฀a฀foreign฀exchange฀loss฀of฀â,¬à¸€1.0฀million...in฀cost฀of฀sales฀ (2004:฀gain...

  • Page 74
    ... The฀activities฀of฀TomTom฀NV฀are฀subject฀to฀corporate฀income฀tax฀in฀all฀countries฀where฀the฀Company฀has฀an฀active฀...฀tax฀position)฀ Other฀ Effective฀tax฀rate฀ 2004฀ 34.5%฀ 0.0%฀ 0.6%฀ -0.1%฀ 35.0%฀ 2005 31.6% 0.2% 0.1% -0.1% 31.8%฀

  • Page 75
    ...fair฀value฀(determined฀as฀the฀average฀annual฀market฀share฀price฀of฀the฀Company's฀shares)฀based฀on฀the฀monetary฀...years฀ended฀31฀December฀2004฀and฀ the฀period฀up฀until฀the฀IPO฀in฀2005,฀has฀been฀computed฀on฀a฀pro-forma฀basis...

  • Page 76
    76 10.฀Intangible฀assets ฀ ฀ Development฀฀ costs฀฀ Acquired Technology฀฀ Total (in฀â,¬à¸€thousands) Balance฀...฀assets฀ Amortisation฀charges฀ ฀ Balance฀as฀at฀31฀December฀2005 Investment฀cost฀ Accumulated฀amortisation฀ ฀ 896฀ -297฀ 599...

  • Page 77
    ...fixtures฀ ฀ Computer hardware and฀software฀ Other฀ Total (in฀â,¬à¸€thousands...฀ ฀ Balance฀as฀at฀31฀December฀2005 Investment฀cost฀ Accumulated฀depreciation฀ ฀ 236...฀property,฀plant฀and฀equipment฀was฀identified฀during฀the฀accounting฀periods.

  • Page 78
    ...฀ 13,402฀ 24,509 78,674 103,183 For฀2005฀the฀inventories฀include฀an฀amount฀of฀â,¬à¸€5.0฀million฀which฀is฀related฀...฀been฀made฀for฀estimated฀unrecoverable฀ amounts฀from฀the฀sale฀of฀goods. The฀carrying฀amount฀of฀trade฀receivables฀...

  • Page 79
    ...denominated฀in฀ US฀Dollars฀and฀revenues฀which฀are฀mainly฀denominated฀in฀euros.฀The฀Company฀does฀not฀purchase฀or...฀Group฀is฀ committed฀was฀as฀follows: ฀ 2004฀ 2005 (in฀â,¬à¸€thousands) Forward฀foreign฀exchange฀contracts฀(USD)฀ 0฀ 145...

  • Page 80
    ...Advisor฀to฀the฀company฀ during฀the฀Global฀Offer. Recapitalisation At฀the฀incorporation฀of฀TomTom฀Nederland฀BV฀in฀April฀ 2005,฀TomTom฀Group฀BV฀contributed฀all฀of฀the฀shares฀it฀ held฀in฀TomTom฀BV฀to฀TomTom฀Nederland฀BV,฀in฀exchange...

  • Page 81
    ...the฀Company's฀performance฀on฀a฀long฀term฀basis.฀ Stock฀Compensation฀Reserve฀ (in฀â,¬à¸€thousands) 2004฀ 2005 ...฀and฀may฀be฀exercised฀only฀by฀the฀option฀holder฀over฀a฀period฀of฀two฀years฀ starting฀three฀years฀after฀the฀date฀of...

  • Page 82
    ...฀new฀plan฀qualifies฀as฀"Equity-settled฀share-based฀payments" .฀The฀vesting฀period฀under฀the฀ 2005฀share฀option฀plan฀is฀three฀years฀followed฀by฀an฀exercise฀period฀of฀four฀years.฀These฀terms฀result฀in฀options฀under฀the฀ plan฀that...

  • Page 83
    ...the฀three฀year฀vesting฀period,฀using฀the฀straight-line฀....00%฀ 60฀months฀ 3.46%฀ Zero฀ 2005 28.58 28.22 38.75% 68฀...฀industry฀benchmarking฀for฀listed฀peer฀group฀companies.฀The฀share฀price฀on฀the฀date...฀model฀was฀developed฀for฀use฀in...

  • Page 84
    ... 22,695 -2,108 20,981 Warranty฀provision The฀Group฀generally฀offers฀warranties฀for฀its฀personal฀ navigation฀products.฀Management฀estimates฀the฀related฀ provision฀for฀future฀warranty฀claims฀based฀on฀historical฀ warranty฀claim฀information,฀as฀well...

  • Page 85
    ...,฀which฀are฀not฀shown฀in฀the฀Company's฀balance฀sheet฀ as฀of฀31฀December฀2005. These฀are฀operating฀leases฀for฀buildings,฀cars฀and฀office฀equipment,฀which฀consist฀of: ฀ 2004฀ 2005 (in฀â,¬à¸€thousands) Commitments฀less฀than฀1฀Year...

  • Page 86
    ...฀Drivetech฀for฀a฀price฀of฀â,¬à¸€2.7฀million.฀ Drivetech฀is฀a฀company฀that฀develops฀navigation฀software฀for฀the฀Taiwanese฀market.฀The฀Group฀consolidated฀Drivetech฀ from฀December฀2005฀onwards.฀The฀transaction฀has฀been฀accounted฀for฀by...

  • Page 87
    ...Applied฀Generics.฀Applied฀Generics฀has฀developed฀ technology฀that฀makes฀it... usage฀and฀cell-switching.฀The฀technology฀is...TomTom฀Inc.฀ rejects฀Garmin's฀claims฀and฀will฀vigorously฀defend฀itself.฀At฀this฀early฀stage฀in฀the฀process฀the฀Company...

  • Page 88
    Other฀financial฀information 88 TomTom฀NV฀in฀the฀last฀4฀years฀ (in฀â,¬à¸€thousands) 2002฀ 2003฀ 2004฀ 2005 Profit฀and฀loss Revenue฀ Cost฀of฀sales฀ Gross฀profit ฀ Research฀and฀development฀expenses฀ Marketing฀expenses฀ Selling,฀general฀and...

  • Page 89
    ...latest฀developments฀and฀add-ons฀ for฀TomTom฀products,฀we฀recommend฀that฀you฀subscribe฀ to฀our฀community฀newsletter฀on฀our฀website. http://www.tomtom.com/support Tel:฀+31฀(0)20฀850฀0800฀ TomTom Rembrandtplein฀35 1017฀CT฀Amsterdam The฀Netherlands

  • Page 90

  • Page 91
    ...฀registered฀with฀the฀Trade฀Register฀of฀the฀Chamber฀of฀Commerce฀of฀Amsterdam,฀The฀ Netherlands฀under฀number฀34224566.฀Our฀corporate฀seat฀is฀in฀Amsterdam,฀The฀Netherlands.฀ We฀have฀our฀business฀address฀at฀Rembrandtplein฀35,฀1017฀CT...

  • Page 92
    TomTom Rembrandtplein฀35 1017฀CT฀Amsterdam The฀Netherlands Tel:฀+31฀(0)20฀850฀0800 Fax:฀+31฀(0)20฀850฀1099 www.tomtom.com