Objectives

Treasury's main goal is to manage the risks the group faces in relation with its cash assets and transactions in other currencies than the reporting currency. Within its risk management objective, Treasury seeks to maximize the return on assets under its management and minimize costs wherever possible, acting in accordance with the policies and controls approved by the supervisory and management board. All transactions initiated by Treasury are directly related to the underlying business of the TomTom Group.

Cash Management

The excess cash is invested with different counter parties to avoid concentration and to manage counter party credit risks. Cash investments are in principle only done in Euro denominated principals to prevent currency exposure on invested cash. Cash investments typically have a term of maximum one year.

Interest Risk Management

Interest rate exposures are managed to control interest expense. Typical instruments being used are swaps and caps.

Currency Risk Management

Transactional foreign exchange risks are managed to mitigate the impact on earnings and cash caused by fluctuations in the currency exchange rates. For known and certain commitments, the exposure is typically eliminated using forward and swap instruments. Regarding anticipated transactions based on forecasted sales and procurement obligations, etc. the potential unfavourable movements are mainly managed through option contracts that provide the right (and not the obligation) to buy or sell non reporting currencies at a predetermined rate.

Accounting

TomTom does not currently apply hedge accounting and therefore most results related to these treasury activities are reported through the financial income and expense line in the profit and loss statement.

Update by TomTom IR August 2009