Exhibit 99.2

Special Purpose Consolidated

Financial Statements 2007/2008

Tommy Hilfiger B.V. (formerly known as Elmira 1 B.V.)

Amsterdam, The Netherlands

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Contents

CONTENTS			2
Consolidated balance sheets			4
Consolidated profit and loss accounts			5
Consolidated cash flow statements			6
Consolidated statements of shareholders’ equity			7
Notes to the Special Purpose Consolidated Financial Statements			8

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Special Purpose Consolidated Financial Statements

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Consolidated balance sheets

		Note				31 March 2008				31 March 2007
Non-current assets
Property and equipment			6				171,899				147,469
Intangible assets			7				765,942				683,928
Deferred income tax assets			20				34,458				54,712
Derivative financial instruments			8				6,388				9,786
Loans and other receivables			9				23,211				7,858
							1,001,898				903,753
Current assets
Inventories			10				191,389				162,747
Trade and other receivables			11				226,201				212,529
Current income tax receivable							—				2,906
Derivative financial instruments			8				495				284
Cash and cash equivalents			12				74,752				136,627
							492,837				515,093
Total assets							1,494,735				1,418,846
EQUITY
Capital and reserves attributable to equity holders of the Company
Ordinary shares and share premium			13				48,923				35,136
Other reserves			14				6,606				337
Accumulated deficit							(73,032	)			(62,680	)
Total equity							(17,503	)			(27,207	)
LIABILITIES
Non-current liabilities
Borrowings			18				549,173				570,947
Payable to related parties			18, 34				410,884				360,398
Other non current liabilities			19				93,312				66,343
Deferred income tax liabilities			20				91,775				85,716
Retirement benefit obligations			21				9,918				9,547
Provisions for other liabilities and charges			22				41,888				49,306
Derivative financial instruments			8				7,909				569
							1,204,859				1,142,826
Current liabilities
Trade and other payables			17				273,612				160,542
Short term borrowings			18				26,943				123,320
Current income tax liabilities							5,298				18,744
Derivative financial instruments			8				1,526				621
							307,379				303,227
Total liabilities							1,512,238				1,446,053
Total equity and liabilities							1,494,735				1,418,846

See Accompanying Notes to Special Purpose Consolidated Financial Statements.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Consolidated profit and loss accounts

						For the year ended 31 March
		Note				2008				2007
Continuing operations
Revenue			23				1,369,377				1,197,247
Cost of goods sold			24				(558,461	)			(570,322	)
Gross Margin							810,916				626,925
Distribution and selling costs							(315,552	)			(238,955	)
Administrative expenses							(236,629	)			(188,746	)
Other expenses							(29,083	)			(78,014	)
							(581,263	)			(505,715	)
Depreciation and amortisation expense			24				(59,941	)			(90,214	)
Operating result							169,711				30,996
Financial income			25				3,747				10,623
Financial expense			25				(156,832	)			(167,893	)
Finance costs, net			25				(153,085	)			(157,270	)
Result before tax							16,627				(126,274	)
Income tax			28				(26,978	)			57,204
Result for the period from continuing operations							(10,350	)			(69,070	)
Discontinued operations
Result for the period from discontinued operations			33				—				8,943
Result for the year							(10,350	)			(60,127	)
Attributable to:
– Equity holder to the company							(10,350	)			(60,127	)
– Minority interest							—				—
Earnings per share for result from continuing operations attributable to the equity holders of the Group during the year
– Basic			29				(0.05	)			(0.39	)
– Diluted			29				(0.05	)			(0.39	)
Earnings per share for result from discontinued operations attributable to the equity holders of the Group during the year
– Basic			29				—				0.05
– Diluted			29				—				0.05
Earnings per share for result for the year attributable to the equity holders of the Group during the year
– Basic			29				(0.05	)			(0.34	)
– Diluted			29				(0.05	)			(0.34	)

See Accompanying Notes to Special Purpose Consolidated Financial Statements.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Consolidated cash flow statements

						For the year ended 31 March
		Note				2008				2007
Cash flows from operating activities
Cash generated from operations			30				227,567				85,900
Income tax paid							(28,360	)			(16,683	)
Net cash generated from operating activities							199,207				69,217
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired			32				(42,930	)			(695,309	)
Purchases of property and equipment							(56,048	)			(67,043	)
Purchases of intangible assets							(7,580	)			(9,909	)
Disposal of business, net of cash							—				192,406
Loans to related parties							3,784				(3,917	)
Interest received							2,626				3,052
Net cash used in investing activities							(100,148	)			(580,720	)
Cash flows from financing activities
Proceeds from issuance of ordinary shares							—				35,100
Proceeds from long term borrowings (net of fees)							—				975,134
Changes in short term borrowings							8,800				—
Proceeds from shareholder loan							—				320,452
Repayments of borrowings							(103,060	)			(576,328	)
Interest paid							(45,021	)			(59,381	)
Payments on financial lease obligations							(1,378	)			—
Settlement of contingent FX forward derivative							(613	)			(52,142	)
Net cash used in financing activities							(141,272	)			642,835
Net increase in cash, cash equivalents and bank overdrafts							(42,213	)			131,332
Cash, cash equivalents and bank overdrafts at beginning of year							122,687				36
Exchange gains/(losses) on cash and bank overdrafts							(5,722	)			(8,681	)
Cash, cash equivalents and bank overdrafts at end of period			12				74,752				122,687

See Accompanying Notes to Special Purpose Consolidated Financial Statements.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Consolidated statements of shareholders’ equity

						Attributable to equity holders
						of the Company
						Ordinary shares
						and share				Other				Accumulated
		Note				premium				reserves				Deficit				Total
Balance at 31 March 2006							36				—				(2,553	)			(2,517	)
Cash flow hedges, net of tax							—				71				—				71
Currency translation differences							—				266				—				266
Net income recognised directly in equity							—				337				—				337
Result for the period							—				—				(60,127	)			(60,127	)
Total recognised income and expense							—				337				(60,127	)			(59,790	)
Issue of share capital							35,100				—				—				35,100
Balance at 31 March 2007							35,136				337				(62,680	)			(27,207	)
Cash flow hedges, net of tax			14				—				233				—				233
Currency translation differences			14				—				5,244				—				5,244
Net income recognised directly in equity							—				5,477				—				5,477
Result for the period							—				—				(10,350	)			(10,350	)
Total recognised income and expense							—				5,477				(10,350	)			(4,873	)
Management plans			15/16				13,787				792				—				14,579
Balance at 31 March 2008							48,923				6,606				(73,030	)			(17,503	)

See Accompanying Notes to Special Purpose Consolidated Financial Statements.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Notes to the Special Purpose Consolidated Financial Statements
(Amounts in € and thousands except per share/option amounts and/or as otherwise indicated)

1. General information

Tommy Hilfiger B.V. (‘the Company’) is a limited liability holding company which was incorporated in the Netherlands on 5 July 2005. The address of its registered office is Stadhouderskade 6, Amsterdam. The fiscal year (‘FY’) of the Company starts at 1 April and ends on 31 March. The Company’s and Group’s reporting currency is determined to be Euro (‘€’), as a significant part of the Group’s activities and financing is expressed in €.

Tommy Hilfiger B.V. and its subsidiaries (together ‘the Group’) design, source and market men’s and women’s sportswear and activewear, jeanswear and childrenswear under the Tommy Hilfiger and Karl Lagerfeld trademarks. Through a range of strategic licensing agreements, the Group also offers a broad array of related apparel, accessories, footwear, fragrance and home furnishings products. The Group’s products can be found in leading department and specialty stores throughout the United States, Canada, Europe, Mexico, Central and South America, Hong Kong and other countries in the Far East, as well as the Group’s own network of specialty and outlet stores in the United States, Canada, Japan and Europe.

The parent company is Tommy Hilfiger Holding S.à r.l. registered in Luxemburg. The ultimate majority shareholders of the Company are funds advised by Apax Partners. The remainder is owned by various other investors and management of the Company.

These Special Purpose Consolidated Financial Statements were approved for issue on 9 April 2010.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these Special Purpose Consolidated Financial Statements are set out below. These policies have been consistently applied to the years and/or periods presented, unless otherwise stated.

2.1 Basis of preparation

On 15 March 2010, Phillips-Van Heusen Corporation (PVH) announced to acquire the Company. The transaction is subject to financing and other customary conditions, including receipt of required regulatory approvals and is expected to close before August 2010. The Company has prepared these Special Purpose Consolidated Financial Statements to conform to the requirements of PVH’s anticipated filing and related securities offerings. The Board of Directors authorised the Company’s Statutory Financial Report 2007/2008 for issuance on 25 June 2008. Subsequent event disclosures since 25 June 2008 have been updated up to the date of these Special Purpose Consolidated Financial Statements.

The Special Purpose Consolidated Financial Statements (“financial statements”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss or equity.

Certain reclassifications in the comparables have been made to concur with current year’s classification.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

The consolidated balance sheet is presented in accordance with maturities. Therefore, the balance sheet items are classified as either non-current or current assets and liabilities. Assets and liabilities with a remaining term to maturities less than one year are classified as current. Assets and liabilities with a remaining term to maturities of more than one year are classified as non-current.

Due to their long-term nature pension obligations are shown as non-current liabilities.

The preparation of the financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to consolidated financial information are disclosed in Note 4.

The following new interpretations are mandatory for the first time for the financial year beginning 1 April 2007.

•

IFRS 7 ‘Financial Instruments: disclosures’ is applied as of 1 April 2007. IFRS 7 supersedes IAS 30 and the disclosure requirements of IAS 32. The objective of IFRS 7 is to require entities to provide disclosures in their financial statements that enable users to evaluate the significance of financial instruments for the entities financial position and performance and the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and the reporting date, and how the entity manages those risks. This standard only impacted the Company’s disclosure notes and did not have any impact on the Group’s results, financial position or cash flow.

•

IFRIC 8, ‘Scope of IFRS 2’, requires consideration of transactions involving the issuance of equity instruments, where the identifiable consideration received is less than the fair value of the equity instruments issued in order to establish whether or not they fall within the scope of IFRS 2. This standard does not have any impact on the group’s financial statements.

•

IFRIC 11, ‘IFRS 2 — Group and treasury share transactions’, was early adopted in 2008. IFRIC 11 provides guidance on whether share-based transactions involving treasury shares or involving group entities should be accounted for as equity-settled or cash-settled share-based payment transactions in the stand-alone accounts of the parent and group companies. This interpretation does not have an impact on the group’s financial statements.

•

IFRIC 12, ‘Service concession arrangements’, applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. The Company assessed that IFRIC 12 is not relevant.

•

IFRIC 14, IAS 19 provides guidance on assessing the limit in IAS 19, Employee benefits on the amount of the surplus that can be recognised as an asset. This interpretation does not have any impact on the group’s financial statements, as the group has no material defined benefit plans and is not subject to any minimum funding requirements.

The following new standards, amendments to standards and interpretations have been issued but are not effective for the financial year beginning 1 April 2007 and have not been early adopted. The new accounting pronouncements which could potentially affect the (presentation of the) Group’s future results, financial position and cash flows under IFRS are described below:

•

In March 2007, the IASB amended IAS 23 ‘Borrowing Costs’. Effective for the financial year beginning on or after 1 January 2009. The proposed amendment would eliminate the option in IAS 23 of recognising all borrowing costs as an expense. The revised IAS 23 will not have a material impact on the group’s financial statements.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

•

In September 2007, the IASB amended IAS 1 ‘Presentation of Financial Statements: A revised Presentation’. Effective for the financial year beginning on or after 1 January 2009. The proposed amendment include the requirement to aggregate information in the financial statements based on shared characteristics, the introduction of a statement of comprehensive income and changes in titles of some of the financial statements. The Company opted to present items of income and expense and components of other comprehensive income in two separate statements as of 1 April 2009.

•

In January 2008, the IASB amended IAS 27 ‘Consolidated and Separate Financial Statements’. The proposed amendment requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. Effective for the financial year beginning on or after 1 July 2009. The Company will apply IAS 27 (Revised) prospectively to transactions with non-controlling interests from 1 April 2010.

•

In January 2008, the IASB amended IFRS 2 ‘Share-based Payment: Vesting Conditions and cancellations’. Effective for the financial year beginning on or after 1 January 2009. The amendment deals with two matters. It clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The amendment will have an impact on the accounting for share-based payments which include conditions unrelated to service. The Company’s current accounting of the management participation plans is not impacted by these amendments.

•

In February 2008, the IASB amended IAS 23 and IAS 1 ‘Puttable Financial Instruments and Obligations Arising on Liquidation’. The amendment requires an obligation of a fixed amount or an amount that fluctuates with changes in a variable other than the market price of the entity’s own equity instruments which can be settled with the issuer’s own equity instruments to be classified as a financial liability. The IAS 1 and IAS 23 Amendment will not have any impact on the group’s financial statements.

•

IFRIC 13, Customer loyalty programmes, clarifies that where goods or services are sold together with a customer loyalty incentive (for example, loyalty points or free products), the arrangement is a multiple-element arrangement and the consideration receivable from the customer should be allocated between the components of the arrangement in proportion to their fair values. Effective for the financial year beginning on or after 1 July 2008. As the Group operates no material customer loyalty programs IFRIC 13 will not have any impact on the group’s financial statements.

2.2 Basis of Consolidation

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern directly or indirectly the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as 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 values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement (see Note 32).

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

The main group companies included in the consolidated financial statements are as follows:

	•		Tommy Hilfiger B.V., The Netherlands
	•		Tommy Hilfiger Group B.V., The Netherlands
	•		Tommy Hilfiger Europe B.V., The Netherlands
	•		Hilfiger Stores GmbH, Germany
	•		Tommy Hilfiger Corporation, British Virgin Islands
	•		Tommy Hilfiger USA Inc., United States
	•		Tommy Hilfiger Wholesale Inc., United States
	•		Tommy Hilfiger Licensing LLC, United States
	•		Tommy Hilfiger Retail LLC, United States
	•		Tommy Hilfiger Canada Inc., Canada
	•		Tommy Hilfiger Canada Retail Inc., Canada
	•		Tommy Hilfiger Japan Corporation, Japan

2.3 Segment reporting

A geographical segment is engaged in providing products and services within a particular economic environment that is subject to risks and returns different from those of segments operating in other economic environments. A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.

In segment reporting, the activities of the Group are differentiated by geographic region (based on the location of Tommy Hilfiger’s markets and customers) — i.e. United States, Europe and Canada — as the primary reporting format and by business activity as the secondary reporting format.

Tommy’s geographical segments are based on the internal organization and reporting structure of the Company and thus, consist primarily of the United States, Europe and Canada regions. Secondary segmentation is based on business segments, which include revenue from retail, wholesale and licensing activities. Revenue, Assets and Liabilities are allocated based on the country in which the customer is located.

Segment information is based on the same accounting policies as those applied in the special purpose consolidated financial statements.

2.4 Foreign Currency

Functional and presentation currency

The consolidated financial statements of the Company are prepared in EURO (“€”) as this is the currency of the primary economic environment in which the Company operates (functional currency). This consolidated financial information is presented in € (presentation currency).

Transactions and balances

Foreign currency transactions are translated into the functional currency using an average rate that approximates the actual rate at the date of the transaction. Whenever exchange rates fluctuate significantly, the exchange rates prevailing at the dates of the transactions are used. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in the hedge reserve in equity as qualifying cash flow hedges.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Group companies

Some Group entities have a functional currency that is different from the presentation currency. None of these entities has a currency of a hyperinflationary economy.

The results and financial position of all the Group entities 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 (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

•

all resulting exchange differences are recognised as a separate component of equity (Cumulative Translation Adjustment or ‘CTA’).

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity 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.

2.5 Property and Equipment

Property and equipment are stated at historical cost less any accumulated depreciation. The cost includes all the expenditures that are directly attributable to the acquisition of the property and equipment. Finance costs are not capitalised. Depreciation is calculated using the straight-line method. Included as furniture and fixtures are assets related to shop-in-shop displays, as the Company has both the right to control the in-store displays and has not transferred the economic risk and rewards of these in-store displays.

Leasehold improvements are amortised using the straight-line method over the lesser of the terms of the leases or the estimated useful lives of the assets. In situations where the lessor provides funds intended to reimburse the Group for the costs of leasehold improvements (or alternatively the lessor makes expenditures on behalf of the Group), these are accounted for as a deferred lease incentives under other non-current liabilities.

Major additions and improvements are capitalised as part of 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 the Group and the cost of the item can be measured reliably. Repairs and maintenance are charged to operations in the period incurred. Upon the disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts. Any gain or loss on the disposal is charged to the income statement. Costs related to real estate that are necessary to operate the store or distribution centre in a later stage and are necessary to bring the asset to its working condition, are capitalised under the condition where management has identified a specific location and it is probable that the Group will acquire the property or enter into a lease agreement for the property. All operating costs during the pre-opening period are expensed when incurred.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Useful lives and depreciation methods for property and equipment are reviewed periodically to ensure that depreciation methods and periods reflect the expected economic benefit of the assets.

2.6 Leases

Finance lease

Leases of property and equipment where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Any initial direct costs of the lessee are added to the amount recognised as an asset. Initial direct costs are defined as ‘incremental costs directly attributable to negotiating and arranging a lease’. These include commissions, legal fees, broker fees, registration fees or stamp duties. They exclude general overheads such as those incurred by a sales and marketing team. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other short-term and other long-term borrowing. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

Operating lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor 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. In an operating lease the initial direct costs are capitalised and expensed over the lease term on a straight-line basis.

Key money

The payment of key money in a finance lease is capitalised as part of the amount recognised as an asset under the lease. Key money is considered an initial direct cost incurred to secure the agreement and it is being amortised with the asset over the shorter of the lease term or the useful life of the asset. In case the lease classifies as an operating lease, the key money is deferred as an asset (prepayments) and amortised over the period of the contract. The amortisation is presented as part of rental expenses.

Rent free periods

Rent holidays refer to a period of time during a lease term where the Group is not obligated to pay rent. Any rent holidays are allocated straight-line over the lease period.

Contingent rent

Contingent rent is the portion of the lease payments that is not fixed in amount but is based on the future amount of a factor that changes other than with the passage of time (e.g. percentage of future sales). Contingent rents are charged as expenses in the periods in which they are incurred.

Rent deposits

Rent deposits are initially recognised at fair value. After initial recognition the receivables are measured at amortised cost using the effective interest method. The difference between the nominal and the fair value is presented as prepaid rent within other receivables and amortised against rent expense over the term of the deposit. Rent deposits are presented within other receivables.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

2.7 Intangible assets

Acquired intangible assets are capitalised if they are controlled by the Group, it is probable that the use of the asset will embody a future economic benefit and the cost of the asset can be reliably measured. The Group’s intangible assets consist of goodwill, trademark rights, customer relationships, computer software and other intangible assets (see Note 7).

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable value. The recoverable value is the higher of an asset’s fair value less costs to sell and value in use. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The Group allocates goodwill to each territory in which it operates (Note 5).

Trademarks

Acquired trademarks are shown at historical cost less impairment. Certain trademarks have a finite useful life and are carried at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives. Trademarks with indefinite useful lives are tested for impairment on an annual basis. Other trademarks subject to amortisation are considered for impairment where there is an indication that the assets may be impaired.

Customer relationships

Acquired customer relationships are shown at historical cost less impairment. The customer relationships have a finite useful life and are carried at cost less accumulated amortisation and impairment. Amortisation is calculated using the straight-line method to allocate the cost of customer relationships over their estimated useful lives.

Computer software and others

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives. Costs associated with developing or maintaining computer software programs are recognised as an expense as incurred. Costs that are directly associated with the development of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Related finance costs are not capitalised.

Research and development cost

The cost of developing a website for internal or external use is capitalised when it is probable that the expected future economic benefits that are attributable to the website will flow to the entity, and the cost of the website can be measured reliably. Related finance costs are not capitalised.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

2.8 Impairment for non-financial assets

Assets that have an indefinite useful life, for example goodwill and certain trademarks, are not subject to amortisation and are tested annually for impairment or when a triggering event occurs. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds the recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.9 Financial assets

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. The Group determines the classification of its financial assets at initial recognition.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Regular purchases and sales of financial assets are recognised on the trade date — the date on which the Group commits to purchase or sells the asset.

Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges in a hedge accounting relation. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within other income — net, in the period in which they arise. For the treatment of results on derivatives, see Note 2.11.

The fair values are based on current bid prices. If the market for a financial asset is not active, the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing models, making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. 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 classified as trade and other receivables in the balance sheet. Loans and receivables are carried at amortised cost using the effective interest method.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the Group intends to dispose of the investment within 12 months of the balance sheet date.

Available-for-sale financial assets are initially recognised at fair value plus transaction costs. Available-for-sale financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Changes in the fair value are recognised in equity except for translation differences on monetary securities which are recognised in profit or loss.

When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement.

2.10 Impairment for financial assets

The Group assesses 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 financial assets classified as available for sale, a significant or prolonged decline in the fair value of the financial asset below its cost is considered as an indicator that the assets 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.

2.11 Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date when a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either hedges of a particular risk associated with a recognised liability or a highly probable forecast transaction (cash flow hedge).

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Group 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.

The fair values of various derivative instruments used for hedging purposes are disclosed in Note 8. Movements on the hedging reserve in shareholders’ equity are shown in Note 14. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedge item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within financial income and expense if it concerns foreign currency exchange (‘FX’) derivatives hedging currency risks on purchase orders. The gain or loss relating to the ineffective portion of interest rate derivatives is recognised within financial income and expense.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement within finance costs. When the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold in case of inventory, or in depreciation in case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised 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 within cost of goods sold.

Derivatives that do not qualify for hedge accounting

Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement within financial income and expense.

2.12 Inventories

Inventories are carried at historical cost calculated on the basis of weighted average method. The costs of inventories comprise the cost to purchase the product (including buying office commissions) and other costs incurred in bringing the inventories to their present location and condition such as inbound freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, as well as insurance, duty, brokers’ fees and consolidators’ fees. Costs of inventories include also the transfer from equity of any gains/losses on qualifying cash flow hedges for purchases of products. Finance costs are not taken into account.

Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Any write down of inventory to net realisable value includes impairment for shrinkage based on historical shrink levels. A write-down to net realisable value taken in a prior period is reversed when the conditions causing the write-down cease to exist.

2.13 Trade receivables

Trade receivables are initially recognised at the fair value and subsequently measured at amortised cost, less a provision for impairment of these receivables. A provision for impairment of trade receivables is established when there is objective evidence that the Group 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 carrying amount and the recoverable amount, being the present value of expected cash flows, discounted at the market rate of interest for similar borrowers. The amount of the provision is recognised in the income statement within distribution and selling costs. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against distribution and selling costs in the income statement.

2.14 Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

2.15 Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

2.16 Management participation plans

The Group operates two equity-settled management participations plans, which are accounted for according to the nature of the respective plans (Note 15).

(a)

Under the terms and conditions of the Management Co-Investment Agreement, depositary receipts have been issued by Stichting Administratiekantoor Elmira over Tommy Hilfiger B.V. shares (the ‘Depositary Receipts’). The fair value per Depositary Receipt is equal to the difference between (i) the fair market value per Depositary Receipt and (ii) the subscription price per Depositary Receipt, and is recognised as an expense at the date of grant.

(b)

Certain key managers (eligible members of the Management Board) have been granted options over Depositary Receipts (the ‘Options’). The Options purchased have, in principle, a life of eight years and five business days following the date of grant. The fair value per Option over Depositary Receipt is equal to the difference between (i) the fair market value per Option over a Depositary Receipt and (ii) any subscription price payable per Option over a Depositary Receipt, and is recognised as an expense over the vesting period.

2.17 Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The Group believes that the face value for trade payables is approximate to the amortised cost initially recognised and the fair value as maturity is generally within 12 months and trade payables are generally not interest bearing. Therefore trade payables are recognised effectively at face value.

2.18 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are expensed in the period in which they incur. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.19 Deferred Income Taxes

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial information. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

2.20 Employee benefits

Pension obligations

The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greater of 10% of the value of plan assets or 10% of the defined benefit obligation are charged or credited to income over the employees’ expected average remaining working lives.

Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Bonus plans

The Group recognises a liability and an expense for bonuses, based on the agreements with the employees. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

2.21 Provisions

Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

The Group may accept the return of goods from their customers and distributors in the course of normal business. Where this practice is applied, revenue is reduced by the estimated amount of such a return, and a corresponding entry is made to provisions. The estimated rate of return is based on statistics of historical returns.

Where there are a number of similar obligations (e.g. returns or similar obligations) the probability that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Although the likelihood of outflow for any one item may be small, it may well be probable that some outflow will be needed to settle the class of obligations as a whole. If that is the case, a provision is recognised.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

If the Group has contracts that are onerous, the unavoidable costs of a present obligation under the contract is recognised and measured as a provision.

2.22 Contingent liabilities and contingent assets

Contingent liabilities are not recognised in the financial statements. Contingent liabilities are disclosed in the Notes, unless there is a very low probability that they will result in an outflow of resources embodying economic benefits. Likewise, contingent assets are not recognised. They are disclosed in the Notes, provided that an associated inflow of resource embodying economic benefits is considered likely.

2.23 Events after the balance sheet date

Events after the balance sheet date, which provide additional information on the situation of the Group on the balance sheet date (adjusting event after the balance sheet date), are recognised in the consolidated balance sheet/income statement. Non-adjusting events after the balance sheet date are disclosed in the Notes if they are of a material nature.

2.24 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Sale of goods — wholesale

The Group sells a range of goods in the wholesale market. Sales of goods are recognised when a Group entity has delivered goods to the wholesaler, the wholesaler has full discretion over the channel and price to sell the goods, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the goods. Delivery does not occur until the goods have been shipped to the specified location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The goods are often sold with a variety of customer incentives such as volume discounts, mark down compensation and cash settlement discounts. Customers have a right to return faulty goods in the wholesale market. Sales are recorded based on the price specified in the sales contracts, net of the estimated volume discounts, mark down compensation, other incentives and returns at the time of sale.

Accumulated experience is used to estimate and provide for the discounts and returns. The volume discounts are assessed based on anticipated annual purchases. No element of financing is deemed present as the sales are made with a credit term of 30 to 90 days, which is consistent with the market practice.

On a seasonal basis, the Group negotiates price adjustments with its wholesale customers as sales incentives or to partially reimburse them for the cost of certain promotions. The Group estimates the cost of such adjustments on an ongoing basis considering historical trends, projected seasonal results and an evaluation of current economic conditions. These costs are recorded as a reduction to net revenue.

Sale of goods — retail

The Group operates a chain of retail stores for selling sportswear, activewear, jeanswear, and childrenswear. Sales of goods are recognised when a Group entity sells a product to the customer. Retail sales are usually in cash or by credit card.

It is the Group’s policy to sell its products to the retail customer with a right to return within 15-90 days (depending on territory). Accumulated experience is used to estimate and provide for such returns at the time of sale. The Group does not operate any loyalty programs.

License income

License income is recognised on an accrual basis in accordance with the substance of the relevant agreements.

2.25 Costs of Goods Sold

The Group includes in cost of goods sold all costs and expenses related to obtaining merchandise incurred prior to the receipt of finished goods at the Group’s distribution facilities.

These costs include, but are not limited to, product cost, inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and internal transfer costs, as well as insurance, duty, brokers’ fees and consolidators’ fees.

In addition, certain costs in the Group’s retail distribution network, such as the costs of shipping merchandise to Group-owned retail stores, are charged to cost of goods sold.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

2.26 Selling and distribution cost

The Group includes in selling and distribution expenses costs incurred subsequent to the receipt of finished goods in the distribution centres, such as the cost of picking and packing goods for delivery to customers. In addition, selling and distribution expenses include product design costs, selling and store service costs and marketing expenses.

Advertising costs and promotion expenses include the costs of producing advertising media, purchasing media space and in general, the cost of all activities designed to promote the Group’s brands and products. Advertising and promotion expenses are recognised as expenses for the period in which they are incurred.

The Group has no long-term commitment for advertising programs. In conjunction with each seasonal selling season, the Group makes arrangements with certain retailers to enter into cooperative advertising programs whereby the retailers are reimbursed for a portion of the qualified advertising costs spent on behalf of the Group. The Group’s share of these programs, which typically represents 50% of the total cost incurred by the retailers, is classified as Selling and distribution expenses.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

3. Financial risk management

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.

Financial risk is managed by a central treasury department. The Group’s central treasury department will be embodied by the Group Treasury Committee (‘GTC’) consisting of the Group’s Chief Financial and Operating Officer and the Group Treasury Manager.

The Group Treasury Manager identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board of Directors provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

3.1.1 Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to purchases in US dollars (‘US$’) related to sales in €, Canadian dollars (‘CAD’) and Japanese Yen (‘¥’). Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations in a currency that is not the entity’s functional currency.

The Group uses a mix of foreign exchange (‘FX’) forward contracts and FX options with maturities shorter than one year in order to mitigate the risks associated with adverse movements in foreign currency which might affect certain firm commitments or transactions, including the purchase of inventory, capital expenditures, the collection of foreign royalty payments and certain inter-group transactions that would affect the consolidated profit and loss account of the Group.

The Group manages the foreign exchange risk against the functional currencies within the Group, which are as follows €, CAD, US$, and ¥. The Group’s operating companies are required to hedge significant foreign exchange risk exposure with external counterparties. The Group’s policies do not allow the use of financial instruments for speculative or trading purposes.

The Group consolidates all financial information from its subsidiary companies into the Group’s consolidated financial information, which is expressed in €. The non-cash or reporting impacts of such translations are not hedged, however are taken into consideration by the GTC for other potential hedge requirements. Furthermore, intercompany financing positions are not hedged with FX forward contracts.

The Group’s financial risk management policies evaluate the currency fluctuation impacts on the Group’s financial performance. Based on this, certain hedges on the anticipated cash flows (mainly purchases of goods in US$) with a maturity less than one year are put in place. These projected purchases in US$ can be qualified as ‘highly probable’ forecast transactions for hedge accounting purposes.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is primarily managed through borrowings denominated in the relevant foreign currencies.

The Group enters into derivative instruments (interest rate swaps and foreign exchange contracts) as part of its financial risk management activities. Its borrowings are denominated in € and US$ and they are at floating interest rates. Based on historic movements and volatilities in these market variables, and management’s knowledge and experience of the financial markets, the Group believes the following movements are ‘reasonable possible’ over a 12 month period. The movements are illustrative only.

The Group’s exposure to currency risk based on nominal values is indicated below, and provides the post-tax effect that a possible increase or decrease in the value of foreign currencies relative to the € would have, assuming all other circumstances remain unchanged, on the Group’s financial income and expenses and shareholders’ equity. In this connection, no account was taken of derivatives concluded to hedge the currency risk. The effects on shareholders’ equity and income are calculated using the closing rate as per balance sheet date.

At 31 March 2008, if the € had strengthened by 10% against US$ with all other variables held constant, post-tax profit for the year would have been €11,118 (2007: €4,553) lower, mainly as a result of foreign exchange loss on translation of US$ denominated borrowings, trade payables, and cash and cash equivalents. Conversely, if € had weakened by 10% against US$ with all other variables held constant, post-tax profit for the year would have been €11,118 (2007: €4,553) higher. Other components of equity would not materially change as result of the exchange rate changes.

At 31 March 2008, if the US$ had strengthened by 10% against CAD with all other variables held constant, post-tax profit for the year would have been €115 lower (2007: €6,552 higher), mainly as a result of foreign exchange loss on translation of US$ denominated borrowings, trade payables, and cash and cash equivalents. Conversely, if US$ had weakened by 10% against CAD with all other variables held constant, post-tax profit for the year would have been €115 higher (2007: €6,552 lower). Other components of equity would not materially change as result of the exchange rate changes.

(ii) Cash flow and fair value interest rate risk

The Group attracts the majority of its financial sources at floating rate. It subsequently protects itself for adverse interest rate movements by limiting the interest expense by entering into pay-fixed, receive-floating interest rate swaps. It is currently the Group’s policy to hedge a minimum of 75% of its Senior Debt (including the Mezzanine loan) with fixed rate hedging instruments.

During fiscal 2008, the Group’s borrowings at variable rate were denominated in € and US$. At 31 March 2008, if € market interest rates had been 50 basis points higher and US$ market interest rates had been 50 basis points higher with all other variables held constant, post-tax profit for the year would have been €1,841 higher (2007: €3,509 higher), mainly as a result of favourable fair value changes of the interest rate swaps. At 31 March 2008, if € market interest rates had been 50 basis points lower and US$ market interest rates had been 50 basis points lower with all other variables held constant, post-tax profit for the year would have been €1,886 lower (2007: €3,603 lower), mainly as a result of favourable fair value changes of the interest rate swaps.

The effect following interest rate changes is predominantly driven by fair value changes of interest rate swaps.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

3.1.2 Credit risk

Credit risk is managed by region. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale customers, including outstanding receivables and committed transactions.

Regional management assesses the credit quality of the customer taking into account its financial position, past experience and other factors. If wholesale customers are independently rated, these ratings are used. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation of credit limits is regularly monitored by local (credit) management.

The Group has a significant retailer, whose accounts receivable position exceeds 5% of the consolidated gross trade receivables. This retailer has a good reputation, track record in credibility and is also insured. Sales to retail customers are settled in cash or using credit cards.

In Europe, the Group has an agreement with a European credit insurance group from whom it obtains credit insurance on an individual customer basis. In all cases the Group believes that the credit risk associated with such financial institutions is minimal. The Group outsources the collection of the majority of its U.S. receivables through a credit company, which is a subsidiary of a large financial institution. The credit company establishes maximum credit limits for each wholesale customer account. If the receivable becomes 120 days past due or the customer becomes bankrupt or insolvent, the full amount of the receivable is payable by the credit company. The third party collection and insurance credit company monitors and communicates with the Groups regional credit department regularly.

In Canada, the Group uses a financial institution to insure its trade receivables. As long as the Group stays within the credit limits approved by the credit insurer, the receivable amount will always be insured for collection. The Group hands over the collection of receivables to the financial institution once the receivables become 100 days past due.

The credit rating of the Group’s major financial institutional counterparties, with the amount of exposure for these counterparties, is presented below in carrying amounts at 31 March 2008 (cash and cash equivalents including bank overdrafts; Note 12):

		S&P Rating
Counterparty		2008				2008				2007
Citibank		AA					17,761				4,790
Mitsui Sumitomo		A-1					12,538				—
HSBC		AA-					12,328				17,760
Fortis Bank		AA-					11,837				73,913
JP Morgan		AA					858				15,580
Others		N/A					19,430				10,644
							74,752				122,687

The Group’s year-end cash balances reported in Canada and Europe were held in current accounts. The cash balances held in the US are invested in overnight Money Market Funds, which are freely obtainable the next day. The majority of the current account balances are held with banks with a minimum S&P rating of A.

Furthermore, the Group’s major derivative financial instruments (the interest rate swaps) are with Credit Suisse (S&P Rating AAA) and have at the balance sheet date a fair value of €6,388 (asset) (2007: €9,786, asset) and of €7,909 (liability) (2007: €799, liability).

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

3.1.3 Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, the availability of funding from 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 maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flows.

The table below analyses the Group’s derivative financial instruments that will be settled on a gross basis into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are displayed at fair value. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

		Less than 1
At 31 March 2008		year
Forward foreign exchange contracts – cash flow hedges:
– outflow			18,737
– inflow			19,289
Forward foreign exchange contracts – held for trading:
– outflow			57,396
– inflow			56,265

At 31 March 2007
Forward foreign exchange contracts – cash flow hedges:
– outflow			22,711
– inflow			22,912
Forward foreign exchange contracts – held for trading:
– outflow			29,298
– inflow			28,967

Refer to Note 18 for contractual maturity of the Group’s total borrowings.

3.2 Capital Risk Management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. These adjustments are subject to approval by the Board of Directors.

Consistent with others in the industry, the Group monitors its financial credibility every quarter-end with four financial covenant ratios:

	•		Cash Flow Cover
	•		Interest Cover
	•		Consolidated Total Net Debt Cover
	•		Capital Expenditure

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

These ratios were defined in close conjunction with the Group’s Senior Debt Lenders. For the relevant periods the Group has not breached the above stated ratios. The interest to be paid in the next fiscal year is depending on the actual level of the covenant ratios over the previous quarter.

3.3 Fair value estimation

The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. Fair values are derived from counterparties and are used as benchmark.

At 31 March 2008, the fair value of the Group’s cash and cash equivalents is equal to their carrying value. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of the Group’s other monetary assets and liabilities approximate carrying value due to the relatively short-term nature of these items. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

4. Critical accounting estimates and judgements

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.

4.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely 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 outlined below.

Estimated impairment of intangible assets

The Group evaluates identifiable intangible assets that are subject to amortisation for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. Recoverability is evaluated by a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by the asset.

Identifiable intangible assets not subject to amortisation are assessed for impairment when triggering events occur or at least annually. The impairment test for identifiable intangible assets not subject to amortisation consists of a comparison of the recoverable value of the intangible asset with its carrying amount. An impairment loss is recognised for the amount by which the carrying value exceeds the recoverable value of the asset. In making this assessment, management relies on a number of factors to discount anticipated future cash flows including operating results, business plans and present value techniques. Rates used to discount cash flows are dependent upon interest rates and the cost of capital at a point of time. There are inherent uncertainties related to these factors and management’s judgement in applying them to the analysis of intangible asset impairment. It is possible that assumptions underlying the impairment analysis will change in such a manner that impairment in value may occur in the future.

Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated in Note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. Based on these calculations it is not likely that a reasonably possible change in a key assumption on which management has based its determination of the recoverable amount would cause the carrying amount to exceed its recoverable amount.

Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are certain transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. 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.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Measurement of directly operated stores

When property and equipment related to own stores are tested for impairment, the following assumptions are made:

	•		The individual directly operated stores are defined as cash generating units;
	•		The future discounted cash flows used for impairment tests are determined on the basis of budget planning as well as mid-term forecasting for the individual own stores.

Fair value of assets acquired in a business combination

The fair value of intangibles acquired in a business combination is determined by using valuation techniques. The Group applies judgment to select a variety of methods and makes assumptions that are mainly based on market conditions existing at the acquisition date. For more information on fair value of assets acquired in a business combination and the valuation techniques used, please refer to Note 32 Acquisitions.

4.2 Critical judgments in applying the Group’s accounting policies

Share-based compensation

In accordance with IFRS 2, the grant of equity instruments to employees and others providing similar services rendered to the Group represents a supplementary benefit provided by the Group. Under IFRS 2, for equity-settled share based payment arrangements, the Group estimates the fair value of these equity instruments at the grant date and records the value within shareholders’ equity, and where applicable this value is spread over the vesting period of the instruments. For cash-settled share based payment arrangements operated by the Company, the Group estimates the fair value of these equity instruments at each reporting date and the associated liability is spread over the vesting period of the instruments. The fair market value applied for the underlying Company’s shares is based on the shareholder value which has been derived from the Enterprise Value (‘EV’) estimated for the Company. For this estimation, EV/EBITDA multiples have been applied that were based on (i) a market approach by using trading multiples of comparable companies as a benchmark and (ii) an income approach as a cross-check in the valuation.

Management participation plans

During the year ended 31 March 2008 eligible key managers and service providers of the Group were offered the opportunity by the Company to purchase depositary receipts over Ordinary Shares of the Company (the ‘Depositary Receipts’) under the terms and conditions of the Management Co-investment Agreement (the ‘Agreement’) against payment of a predetermined subscription price. The Agreement is regarded to be an equity-settled share based payment transaction. The fair value per Depositary Receipt recognised is equal to the difference between (i) the fair market value per Depositary Receipt and (ii) the subscription price per Depositary Receipt. A related expense has been recognised in the consolidated income statement for FY2008. Also refer to Note 15 Management participation plans.

Management Option Plan

Options over Depositary Receipts (the ‘Options’) have been granted to two members of the Management Board by Tommy Hilfiger Holding S.à r.l. For certain Options grants an option price was payable by the members of the Management Board in order to receive such Options. The fair value per Option recognised is equal to the difference between (i) the fair market value per Option and (ii) any subscription price payable for each Option granted and is recognised as an expense. The fair value the Options granted to the Management Board is recognised as an employee expense with a corresponding increase in equity as a contribution from Tommy Hilfiger Holding S.à r.l. The options are regarded to be an equity-settled share based payment transaction and the fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a Black & Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Employee bonus plan

The Company has granted certificates to eligible employees, which certificates are linked to the underlying price of the Company’s shares. The certificates will be converted into a cash bonus payment at the time of an eventual change in ownership of the Company and the actual payout for each certificate is capped at €1,000 (per certificate). This bonus arrangement is regarded to be a cash-settled share based incentive arrangement under IFRS 2. The fair value of the liability is re-measured at each reporting date and for each certificate granted the fair value is currently set at the maximum pay-out level of €1,000 (per certificate). Based on communication of this plan to employees and the expected timing of such change in ownership the expense is spread over the period during which the employees become unconditionally entitled to the certificates and recognised as a liability. As at 31 March 2008, this has resulted in an income statement expense of €9,123. The total expected costs are estimated at €26,300.

Agreement with a key management member

The contract with a member of key management states various instances under which the member of key management is entitled to a payment upon pre-defined exit events. The exit events contemplated by the contract relate to sale of control of the Group or substantially all its assets. The Company concluded that based on the facts and circumstances this right is currently not relevant and therefore has valued this element of the contract at nil. Also refer to Note 36 Related party transactions.

Return and Chargeback provisions

The Group recognises various customer incentive schemes and return policies. The Group has estimated the costs associated with these schemes and policies based on statistics of historical returns and customer specific arrangements.

Revenue recognition on the sale of the sourcing business

During FY2007, the Group sold its Buying Office activities for a total consideration of €192.1 million, of which €155 million related to activities undertaken by Buying Offices owned and operated by the Group and €37.1 million related to a consideration received for additional sourcing agreed in the agreement with Li & Fung. Any net result generated by the buying offices over the period 10 May 2006 to the date of sale was presented as profit from discontinued operations in the income statement (Refer to Note 33).

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

5. Segment information

Primary reporting format — geographic segments

At 31 March 2008, the Group is organised on a worldwide basis into 4 main geographic segments.

•

United States

•

Europe

•

Canada

•

Rest of the world/other

Rest of the World operations mainly comprise Japan operations (as of February 2008), Karl Lagerfeld operations, Head Office and licensing in regions other than USA and Europe.

Intersegment transfers: segment revenue, segment expenses and segment result include transfers between business segments and between geographical segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods. Those transfers are eliminated in consolidation.

The segment results for the year ended 31 March 2008 are as follows:

		United																Elimina-
		States				Europe				Canada				Other				tions				Total
Revenue			519,328				706,526				135,689				44,158				(36,324	)			1,369,377
Intersegment revenue			(35,854	)			—				—				(470	)			36,324				—
Net revenue			483,474				706,526				135,689				43,688				—				1,369,377
Operating result			55,802				131,928				8,446				(30,071	)			—				166,105
Finance costs, net																							(149,479	)
Income tax expense																							(26,978	)
Result for the period from continuing operations																							(10,352	)
Result for the period from discontinued operations																							—
Result for the year																							(10,352	)

The segment results for the year ended 31 March 2007 are as follows:

		United																Elimina-
		States				Europe				Canada				Other				tions				Total
Revenue			533,913				545,303				126,331				19,108				(27,409	)			1,197,246
Intersegment revenue			(27,409	)															27,409				—
Net revenue			506,504				545,303				126,331				19,108				—				1,197,246
Operating result			(42,471	)			76,764				2,688				(7,922	)			—				29,059
Finance costs, net																							(155,333	)
Income tax expense																							57,204
Result for the period from continuing operations																							(69,070	)
Result for the period from discontinued operations															8,943								8,943
Result for the year																							(60,127	)

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Significant non-cash items included in operating result for the year ended 31 March 2008 are as follows:

		United												Rest of the
		States				Europe				Canada				World/Other				Group
Depreciation and impairment			(16,344	)			(20,016	)			(6,524	)			(852	)			(43,736	)
Amortisation			(3,571	)			(10,278	)			(1,395	)			(961	)			(16,205	)
Total			(19,915	)			(30,294	)			(7,919	)			(1,813	)			(59,941	)

Significant non-cash items included in operating result for the year ended 31 March 2007 are as follows:

		United												Rest of the
		States				Europe				Canada				World/Other				Group
Depreciation and impairment			(39,810	)			(16,443	)			(5,178	)			(70	)			(61,501	)
Amortisation			(901	)			(25,435	)			(1,621	)			(756	)			(28,713	)
Onerous contracts			(6,426	)			—				—				—				(6,426	)
Total			(47,137	)			(41,878	)			(6,799	)			(826	)			(96,640	)

Segment assets consist primarily of Property and Equipment, Intangible assets, Inventories, Trade and Other receivables. Segment liabilities comprise mainly Trade and Other payables. Non-allocated assets primarily include deferred and current income tax assets, derivative financial instruments and cash and cash equivalents. Non-allocated liabilities mainly include deferred and current income tax liabilities, borrowings, other current liabilities and the shareholders loan.

Capital expenditure comprises additions to Property and Equipment (Note 6) and Intangible Assets (Note 7).

The segment assets and liabilities at 31 March 2008 and capital expenditure for the year ended are as follows:

		United												Rest of the
		States				Europe				Canada				World/Other				Un-allocated				Total
Assets			350,330				801,087				117,193				165,507				60,618				1,494,735
Liabilities			(118,994	)			(114,972	)			(26,229	)			(40,577	)			(1,211,466	)			(1,512,238	)
Capital expenditure			32,865				29,221				5,423				16,481				—				83,990

The segment assets and liabilities at 31 March 2007 and capital expenditure for the year then ended are as follows:

		United												Rest of the
		States				Europe				Canada				World/Other				Un-allocated				Total
Assets			387,623				722,898				131,832				32,604				143,889				1,418,846
Liabilities			(136,612	)			(87,919	)			(25,003	)			(9,056	)			(1,187,463	)			(1,446,053	)
Capital expenditure			31,175				30,444				15,615				30				—				77,264

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

Secondary reporting format — business segments

At 31 March 2008, the Group is organised on a worldwide basis into four main business segments:

•

Retail

•

Wholesale

•

Licensing

•

Other

Retail segment comprises the distribution and sale of the Group’s products through anchor stores, satellite stores, mall stores, company stores, European outlet stores and E-commerce.

Wholesale segment comprises the distribution and sale of the Group’s products to third party retailers, including franchise operators of Tommy Hilfiger stores.

Licensing segment comprises the licensing of the Group’s brands to third parties that either produce goods (such as fragrances, handbags, watches and eyewear) not currently sold by the Group, or that operate in geographic locations where the Group currently has no operations, in each case in exchange for a royalty typically calculated as a percentage of sales.

Other Group activities mainly comprise the Group’s Karl Lagerfeld businesses as well as corporate activities such as finance, executive compensation and certain marketing costs. Neither of these constitutes a separately reportable segment.

The segment results, assets and liabilities at 31 March 2008 and capital expenditure for the year ended are as follows:

		Wholesale				Retail				Licensing				Other				Total
Revenue			727,487				590,765				46,769				4,356				1,369,377
Operating result			106,890				73,643				33,681				(48,109	)			166,105
Total assets			403,673				258,254				5,362				827,446				1,494,735
Capital expenditure			19,468				36,670				—				27,852				83,990

The segment results, assets and liabilities at 31 March 2007 and capital expenditure for the year ended are as follows:

		Wholesale				Retail				Licensing				Other				Total
Revenue			668,633				479,377				45,401				3,836				1,197,247
Operating result			59,316				36,663				31,398				(98,318	)			29,059
Total assets			355,466				188,153				14,610				965,817				1,524,046
Capital expenditure			18,959				58,305				—				—				77,264

Unallocated assets mainly relate to intangibles, deferred income tax assets and cash and cash equivalents.

Tommy Hilfiger B.V.
Special Purpose Consolidated Financial Statements 2007/2008

(amounts in € thousands, except per share/option amounts and/or as otherwise indicated)

6. Property and Equipment

Property and equipment consists of the following at 31 March 2008:

		Furniture &				Land and				Leasehold				Computer				Machinery &
		Fixture				buildings				Improvement				Equipment				equipment				Total
At cost
31 March 2007			68,409				6,902				104,890				19,374				9,605				209,180
Additions			27,452				13,500				29,954				2,127				463				73,496
Acquisitions			1,236				—				7,312				—				—				8,548
Disposals			(3,367	)			—				(3,617	)			(1,290	)			(192	)			(8,466	)
Translation			(13,818	)			(369	)			(17,538	)			(3,046	)			(1,980	)			(36,751	)
31 March 2008			79,912				20,033				121,001				17,165				7,896				246,007
Accumulated depreciation
31 March 2007			23,894				138				25,290				10,683				1,706				61,711
Depreciation for the period			20,791				291				16,278				3,923				2,453				43,736
Disposals			(3,093	)			—				(3,183	)			(493	)			(192	)			(6,961	)
Translation			(10,254	)			(37	)			(10,373	)			(2,364	)			(1,350	)			(24,378	)
31 March 2008			31,338				392				28,012				11,749				2,617				74,108
Net book value at 31 March 2008			48,574				19,641				92,989				5,416				5,279				171,899
Net book value at 31 March 2007			44,515				6,764				79,600				8,691				7,899				147,469

Property and equipment consists of the following at 31 March 2007:

		Furniture &				Land and				Leasehold				Computer				Machinery &
		Fixture				buildings				Improvement				Equipment				equipment				Total
At cost
31 March 2006			—				—				—				—				—				—
Acquisitions			49,510				—				71,787				8,946				7,762				138,005
Additions			19,830				7,228				36,357				10,697				2,363				76,475
Disposals			(162	)			—				(605	)			—				(139	)			(906	)
Translation			(769	)			(326	)			(2,649	)			(269	)			(381	)			(4,394	)
31 March 2007			68,409				6,902				104,890				19,374				9,605				209,180
Accumulated depreciation
31 March 2006			—				—				—				—				—				—
Depreciation for the period			20,912				145				12,276				5,171				965				39,469
Impairment charges			2,881				—				12,879				5,531				741				22,032
Translation			101				(7	)			135				(19	)			—				210
31 March 2007			23,894				138				25,290				10,683				1,706				61,711
Net book value at 31 March 2007			44,515				6,764				79,600				8,691				7,899				147,469
Net book value at 31 March 2006			—				—				—				—				—				—

Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets:

		Years
Buildings			0-25
Machinery and equipment			3-5
Furniture and fixtures, including shop-in-shop displays			3-5