UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2012
Commission File Number: 001-35368

MICHAEL KORS HOLDINGS LIMITED
(Translation of registrant’s name into English)

c/o Michael Kors Limited
Unit 1001, 10/F, Miramar Tower
132 Nathan Road
Tsim Sha Tsui, Hong Kong
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F   x             Form 40-F   ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   ¨

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 	 	MICHAEL KORS HOLDINGS LIMITED	
			
Date: February 14, 2012	 	By:	 	/s/ Joseph B. Parsons	
	 		 	Name:	 	Joseph B. Parsons	
	 		 	Title:	 	Executive Vice President, Chief Financial Officer, Chief Operating Officer & Treasurer	

Exhibit Index

Exhibit
No.	  	Description	
		
99.1	  	Consolidated Interim Financial Statements for the Three and Nine Months Ended December 31, 2011 and January 1, 2011	
		
99.2	  	Management’s Discussion and Analysis for the Three and Nine Months Ended December 31, 2011 and January 1, 2011	
		
99.3	  	Memorandum and Articles of Association of Michael Kors Holdings Limited, as amended and restated on December 21, 2011	

Exhibit 99.1
MICHAEL KORS HOLDINGS LIMITED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
DECEMBER 31, 2011 AND JANUARY 1, 2011

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

 	  	December 31,
2011	 	 	April 2,
2011	 	
Assets	  				 				
Current assets	  				 				
Cash and cash equivalents	  	$	105,668	  	 	$	21,065	  	
Receivables, net	  	 	88,762	  	 	 	80,081	  	
Inventories	  	 	160,800	  	 	 	117,173	  	
Deferred tax assets	  	 	11,589	  	 	 	7,322	  	
Prepaid expenses and other current assets	  	 	29,509	  	 	 	19,757	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	396,328	  	 	 	245,398	  	
Property and equipment, net	  	 	155,728	  	 	 	119,323	  	
Intangible assets, net	  	 	14,552	  	 	 	15,796	  	
Goodwill	  	 	14,005	  	 	 	14,005	  	
Deferred tax assets	  	 	2,416	  	 	 	1,951	  	
Other assets	  	 	7,330	  	 	 	3,022	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	590,359	  	 	$	399,495	  	

Liabilities and Shareholders’ Equity	  				 				
Current liabilities	  				 				
Revolving line of credit	  	$	15,539	  	 	$	12,765	  	
Accounts payable	  	 	79,203	  	 	 	52,873	  	
Accrued payroll and payroll related expenses	  	 	22,098	  	 	 	26,100	  	
Accrued income taxes	  	 	10,338	  	 	 	18,701	  	
Accrued expenses and other current liabilities	  	 	38,062	  	 	 	17,286	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	165,240	  	 	 	127,725	  	
Note payable to parent	  	 	—  	  	 	 	101,650	  	
Deferred rent	  	 	39,123	  	 	 	29,381	  	
Deferred tax liabilities	  	 	6,748	  	 	 	5,495	  	
Other long-term liabilities	  	 	3,987	  	 	 	3,218	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	215,098	  	 	 	267,469	  	
Commitments and contingencies	  				 				
Contingently redeemable ordinary shares	  	 	—  	  	 	 	6,706	  	
			
Shareholders’ equity	  				 				
Convertible preference shares, no par value; 10,163,920 shares issued and outstanding at April 2, 2011.	  	 	—  	  	 	 	—  	  	
Ordinary shares, no par value; 650,000,000 shares authorized, and 191,049,948 shares issued and outstanding at December 31, 2011, and 140,554,377 shares issued and outstanding at April 2, 2011.	  	 	—  	  	 	 	—  	  	
Additional paid-in capital	  	 	193,188	  	 	 	40,000	  	
Accumulated other comprehensive income (loss)	  	 	(2,966	) 	 	 	4,033	  	
Retained earnings	  	 	185,039	  	 	 	81,287	  	
	  	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	375,261	  	 	 	125,320	  	
	  	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	590,359	  	 	$	399,495	  	
	  	 	 	 	 	 	 	 	
See accompanying notes to consolidated financial statements.
 
2

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)

 	  	Three Months Ended	 	 	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	December 31,
2011	 	 	January 1,
2011	 	
					
Net sales	  	$	353,988	  	 	$	208,824	  	 	$	874,195	  	 	$	531,264	  	
Royalty revenue	  	 	19,618	  	 	 	13,628	  	 	 	48,069	  	 	 	32,072	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	  	 	373,606	  	 	 	222,452	  	 	 	922,264	  	 	 	563,336	  	
Cost of goods sold	  	 	151,701	  	 	 	95,688	  	 	 	388,290	  	 	 	251,392	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	221,905	  	 	 	126,764	  	 	 	533,974	  	 	 	311,944	  	
Selling, general and administrative expenses	  	 	143,400	  	 	 	75,458	  	 	 	334,199	  	 	 	196,819	  	
Depreciation and amortization	  	 	10,626	  	 	 	6,375	  	 	 	27,642	  	 	 	18,055	  	
Impairment of long-lived assets	  	 	3,292	  	 	 	—  	  	 	 	3,292	  	 	 	2,838	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	157,318	  	 	 	81,833	  	 	 	365,133	  	 	 	217,712	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	  	 	64,587	  	 	 	44,931	  	 	 	168,841	  	 	 	94,232	  	
Interest expense, net	  	 	452	  	 	 	468	  	 	 	1,112	  	 	 	1,698	  	
Foreign currency gain	  	 	(2,191	) 	 	 	(2,421	) 	 	 	(3,920	) 	 	 	(2,808	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before provision for income taxes	  	 	66,326	  	 	 	46,884	  	 	 	171,649	  	 	 	95,342	  	
Provision for income taxes	  	 	27,295	  	 	 	19,094	  	 	 	67,897	  	 	 	40,209	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	39,031	  	 	 	27,790	  	 	 	103,752	  	 	 	55,133	  	
Net income applicable to preference shareholders	  	 	7,032	  	 	 	5,990	  	 	 	21,227	  	 	 	11,884	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income available for ordinary shareholders	  	$	31,999	  	 	$	21,800	  	 	$	82,525	  	 	$	43,249	  	

Weighted average ordinary shares outstanding:	  				 				 				 				
Basic	  	 	154,738,356	  	 	 	140,554,377	  	 	 	147,282,778	  	 	 	140,554,377	  	
Diluted	  	 	193,583,954	  	 	 	179,177,268	  	 	 	186,780,461	  	 	 	179,177,268	  	
					
Net income per ordinary share:	  				 				 				 				
Basic	  	$	0.21	  	 	$	0.16	  	 	$	0.56	  	 	$	0.31	  	
Diluted	  	$	0.20	  	 	$	0.16	  	 	$	0.56	  	 	$	0.31	  	
					
Statements of Comprehensive Income:	  				 				 				 				
Net income	  	$	39,031	  	 	$	27,790	  	 	$	103,752	  	 	$	55,133	  	
Foreign currency translation adjustments	  	 	(1,345	) 	 	 	(2,342	) 	 	 	(6,999	) 	 	 	(895	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income	  	$	37,686	  	 	$	25,448	  	 	$	96,753	  	 	$	54,238	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to consolidated financial statements.
 
3

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	
Cash flows from operating activities	  				 				
Net income	  	$	103,752	  	 	$	55,133	  	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				
Depreciation and amortization	  	 	27,642	  	 	 	18,055	  	
Impairment and write-off of property and equipment	  	 	3,292	  	 	 	942	  	
Impairment of intangible assets	  	 	—  	  	 	 	1,896	  	
Unrealized foreign exchange gain	  	 	(3,920	) 	 	 	(2,808	) 	
Amortization of deferred financing costs	  	 	334	  	 	 	141	  	
Amortization of deferred rent	  	 	2,651	  	 	 	2,637	  	
Deferred income tax provision	  	 	(5,036	) 	 	 	—  	  	
Equity compensation expense	  	 	20,041	  	 	 	—  	  	
Tax benefits on exercise of share options	  	 	(9,869	) 	 	 	—  	  	
Change in assets and liabilities:	  				 				
Receivables, net	  	 	(10,158	) 	 	 	14,369	  	
Inventories	  	 	(45,056	) 	 	 	(40,668	) 	
Prepaid expenses and other current assets	  	 	(13,532	) 	 	 	(6,447	) 	
Other assets	  	 	(2,304	) 	 	 	(1,411	) 	
Accounts payable	  	 	27,134	  	 	 	25,756	  	
Accrued expenses and other current liabilities	  	 	14,899	  	 	 	33,841	  	
Other long-term liabilities and deferred credits	  	 	7,478	  	 	 	6,491	  	
	  	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	117,348	  	 	 	107,927	  	
	  	 	 	 	 	 	 	 	
Cash flows from investing activities	  				 				
Capital expenditures	  	 	(56,798	) 	 	 	(34,771	) 	
	  	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(56,798	) 	 	 	(34,771	) 	
	  	 	 	 	 	 	 	 	
Cash flows from financing activities	  				 				
Repayments of borrowings under revolving credit agreement	  	 	(51,026	) 	 	 	(228,288	) 	
Borrowings under revolving credit agreement	  	 	53,800	  	 	 	192,984	  	
Bank overdraft	  	 	—  	  	 	 	(4,380	) 	
Proceeds from private placement	  	 	9,550	  	 	 	—  	  	
Exercise of employee share options	  	 	5,372	  	 	 	—  	  	
Tax benefits on exercise of share options	  	 	9,869	  	 	 	—  	  	
Payment of deferred financing costs	  	 	(2,479	) 	 	 	(163	) 	
	  	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	  	 	25,086	  	 	 	(39,847	) 	
	  	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	  	 	(1,033	) 	 	 	557	  	
	  	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents	  	 	84,603 	  	 	 	33,866 	  	
Beginning of period	  	 	21,065	  	 	 	5,664	  	
	  	 	 	 	 	 	 	 	
End of period	  	$	105,668	  	 	$	39,530	  	

Supplemental disclosures of cash flow information	  				 				
Cash paid for interest	  	$	998	  	 	$	890	  	
Cash paid for income taxes	  	$	71,151	  	 	$	19,243	  	
Supplemental disclosure of noncash investing and financing activities	  				 				
Accrued capital expenditures	  	$	14,007	  	 	$	5,300	  	
See accompanying notes to consolidated financial statements.
 
4

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data)
(Unaudited)

 	  	Convertible
Preference Shares	 	  	Ordinary Shares	 	  	Additional
Paid-in
Capital	 	  	Accumulated
Other
Comprehensive
Income (Loss)	 	 	Retained
Earnings	 	  	Total	 	

 	  	Shares	 	 	Amounts	 	  	Shares	 	  	Amounts	 	  			  			 			  			
Balance at April 2, 2011	  	 	10,163,920	  	 	$	—  	  	  	 	140,554,377	  	  	$	—  	  	  	$	40,000	  	  	$	4,033	  	 	$	81,287	  	  	$	125,320	  	
Net income	  	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	 	 	103,752	  	  	 	103,752	  	
Foreign currency translation adjustment	  	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	(6,999	) 	 	 	—  	  	  	 	(6,999	) 	
	  				 				  				  				  				  				 				  	 	 	 	
Total comprehensive income	  	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	 	 	—  	  	  	 	96,753	  	
Issuance of shares in exchange for note*	  	 	475,796	  	 	 	—  	  	  	 	6,579,656	  	  	 	—  	  	  	 	101,650	  	  	 	—  	  	 	 	—  	  	  	 	101,650	  	
Elimination of contingent redemption on ordinary shares	  	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	6,706	  	  	 	—  	  	 	 	—  	  	  	 	6,706	  	
Issuance of convertible preference shares	  	 	217,137	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	9,550	  	  	 	—  	  	 	 	—  	  	  	 	9,550	  	
Issuance of restricted shares	  	 	—  	  	 	 	—  	  	  	 	666,250	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	 	 	—  	  	  	 	—  	  	
Exercise of employee share options	  	 	—  	  	 	 	—  	  	  	 	1,993,640	  	  	 	—  	  	  	 	5,372	  	  	 	—  	  	 	 	—  	  	  	 	5,372	  	
Equity compensation expense	  	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	20,041	  	  	 	—  	  	 	 	—  	  	  	 	20,041	  	
Tax benefits on exercise of share options	  				 				  				  				  	 	9,869	  	  				 				  	 	9,869	  	
Conversion of convertible preference shares	  	 	(10,856,853	) 	 	 	—  	  	  	 	41,256,025	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Balance at December 31, 2011	  	 	—  	  	 	$	—  	  	  	 	191,049,948	  	  	$	—  	  	  	$	193,188	  	  	$	(2,966	) 	 	$	185,039	  	  	$	375,261	  	

*	Represents the extinguishment of the note payable to the Company’s former parent.	
See accompanying notes to consolidated financial statements.
 
5

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Business and Basis of Presentation
Michael Kors Holdings Limited (“MKHL,” and together with its subsidiaries, the “Company”) was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002. The Company is a leading designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks “MICHAEL KORS,” “MICHAEL MICHAEL KORS,” “KORS MICHAEL KORS” and various other related trademarks and logos. The Company’s business consists of retail, wholesale and licensing segments. Retail operations consist of collection stores, lifestyle stores, including concessions and outlet stores located primarily in the United States, Canada, Europe and Japan. Wholesale revenues are principally derived from major department and specialty stores located throughout the United States, Canada and Europe. The Company licenses its trademarks on products such as fragrances, cosmetics, eyewear, leather goods, jewelry, watches, coats, footwear, men’s suits, swimwear, furs and ties.
For all periods presented, all ordinary share and per share amounts in these consolidated financial statements and the notes hereto have been adjusted retroactively to reflect the effects of a 3.8-to-1 share split, which was completed on November 30, 2011, as well as the effects of the July 2011 reorganization discussed in Note 2 below, as if such reorganization and share split had occurred at the beginning of the periods presented.
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The consolidated financial statements as of December 31, 2011 and for the three and nine months ended December 31, 2011 and January 1, 2011, are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The interim financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation in conformity with GAAP. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended April 2, 2011, as filed with the Securities and Exchange Commission on December 2, 2011, on Form F-1.The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.
The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31. As such, the term “Fiscal Year” or “Fiscal” refers to the 52-week or 53-week period, ending on that day. The results for the three and nine months ended December 31, 2011 and January 1, 2011, are each based on a 13-week period and 39-week period, respectively.
2. Reorganization and Initial Public Offering
On December 20, 2011, the Company completed an initial public offering (“IPO”), which resulted in the sale of 54,280,000 shares at a price of $20 per share, all of which were sold by selling shareholders. The Company did not receive any of the proceeds related to the sale of these shares. In addition, the Company incurred approximately $5.2 million in fees related to the offering which were charged to selling, general and administrative expenses during the third quarter of Fiscal 2012. On December 20, 2011, in connection with the consummation of the IPO, 10,856,853 convertible preference shares were converted to 41,256,025 ordinary shares at a ratio of 3.8-to-1 resulting in no preference shares issued and outstanding at December 31, 2011.
Prior to July 2011, the Company was owned 85% by SHL-Kors Limited, a BVI corporation, and 15% by Mr. Kors. SHL-Kors Limited was owned 100% by SHL Fashion Limited.
In July 2011, the Company underwent a corporate reorganization whereby the Company completed a merger with its former parent, SHL-Kors Limited, which merged with and into the Company, with the Company as the surviving corporation (the “First Merger”). Subsequent to the completion of the First Merger, SHL Fashion Limited, the former parent company of SHL-Kors Limited, merged with and into the Company (the “Second Merger”), with the Company as the surviving corporation. Upon completion of the Second Merger, all previous shareholders of SHL Fashion Limited and Mr. Kors became direct shareholders in the Company. Immediately prior to the Second Merger, the Company issued 475,796 preference shares and 6,579,656 ordinary shares to SHL Fashion Limited in consideration for the extinguishment of the Company’s $101.7 million note payable to SHL Fashion Limited. This exchange was based on the fair value of the Company at the time of exchange. In the Second Merger, Mr. Kors and the shareholders of SHL Fashion received 147,134,033 newly issued ordinary shares and 10,639,716 newly issued convertible preference shares of the Company in proportion to their ownership interests held prior to the Second Merger. The Company considered this transaction to be the acquisition of the non-controlling interest in the Company held by Mr. Kors, and, accordingly, the Company accounted for this transaction as an equity transaction.
Following the reorganization, in a private placement in July 2011, a group of investors purchased (i) all 10,639,716 convertible preference shares issued in the reorganization from the previous SHL Fashion Limited shareholders and Mr. Kors for $490 million, and (ii) 217,137 newly issued convertible preference shares from the Company for $10.0 million, of which $9.5 million in proceeds, net of placement fees of $0.5 million, were received by the Company. As a result of the aforementioned transactions, the capital structure of the Company increased from 4,351 issued and outstanding ordinary shares to 147,134,033 issued and outstanding ordinary shares (650,000,000 authorized) and 10,856,853 authorized, issued and outstanding convertible preference shares.
 
6

In addition to the above, immediately prior to the reorganization, the redemption feature related to the contingently redeemable ordinary shares was eliminated, thereby, resulting in the reclassification of $6.7 million from temporary equity, which was classified as “contingently redeemable ordinary shares” in the Company’s consolidated balance sheets, to permanent equity as additional paid-in capital (see Note 12).
3. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory recovery, the valuation of stock-based compensation, valuation of deferred taxes and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates.
Derivative Financial Instruments
The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risk related to these transactions. The Company records these derivative instruments on the consolidated balance sheets at fair value. Though the Company uses forward contracts to hedge its cash flows, the Company does not designate these instruments as hedges for hedge accounting purposes. Accordingly, changes in the fair value of these contracts, as of each balance sheet date and upon maturity, are recorded in cost of sales or operating expenses, within the Company’s consolidated statements of operations, as applicable to the transactions for which the forward exchange contracts were intended to hedge. For the nine months ended December 31, 2011, the gain recognized in operations was $3.9 million. The following table details the fair value of these contracts as of December 31, 2011, and April 2, 2011 (in thousands):

 	  	December 31,
2011	 	 	April 2,
2011	 	
	  			 			
Prepaid expenses and other current assets	  	$	2,915	  	 	$	745	  	
Accrued expenses and other current assets	  	$	(619	) 	 	$	(2,293	) 	
The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In attempts to mitigate counterparty credit risk, the Company enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 18 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.
Net Income Per Share
The Company reports earnings per share in conformity with the two-class method for calculating and presenting earnings per share, due to the existence of both ordinary and convertible preference securities. Under the two-class method, basic net income per ordinary share is computed by dividing the net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Net income available to shareholders is determined by allocating undistributed earnings between holders of ordinary and convertible preference shares, based on the participation rights of the preference shares. Diluted net income per share is computed by dividing the net income available to both ordinary and preference shareholders by the weighted-average number of dilutive shares outstanding during the period.
The Company’s basic net income per share excludes the dilutive effect of stock options and unvested restricted shares. It is based upon the weighted average number of ordinary shares outstanding during the period divided into net income.
Diluted net income per share reflects the potential dilution that would occur if stock option grants or any other dilutive equity instruments were exercised or converted into ordinary shares. These equity instruments are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods.
For the purposes of basic and diluted net income per share, as a result of the reorganization and exchange during July 2011, weighted average shares outstanding for purposes of presenting net income per share on a comparative basis were retroactively restated for all periods presented to reflect the exchange of ordinary shares for the newly issued ordinary and convertible preference shares as described in Note 2, as if such reorganization and exchange had occurred at the beginning of the periods presented. In addition, as a result of the 3.8-to-1 share split, which was completed on November 30, 2011, weighted average shares outstanding were retroactively restated for all periods presented.
 
7

The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in thousands except share and per share data):

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
Numerator:	  				  				  				  				
Net Income	  	$	39,031	  	  	$	27,790	  	  	$	103,752	  	  	$	55,133	  	
Net income applicable to preference shareholders	  	 	7,032	  	  	 	5,990	  	  	 	21,227	  	  	 	11,884	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net income available for ordinary shareholders	  	$	31,999	  	  	$	21,800	  	  	$	82,525	  	  	$	43,249	  	

Denominator:	  				  				  				  				
Basic weighted average ordinary shares	  	 	154,738,356	  	  	 	140,554,377	  	  	 	147,282,778	  	  	 	140,554,377	  	
Weighted average dilutive share equivalents:	  				  				  				  				
Share options	  	 	4,843,366	  	  	 	—  	  	  	 	1,614,455	  	  	 	—  	  	
Convertible preference shares	  	 	34,002,232	  	  	 	38,622,891	  	  	 	37,883,228	  	  	 	38,622,891	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Diluted weighted average ordinary shares	  	 	193,583,954	  	  	 	179,177,268	  	  	 	186,780,461	  	  	 	179,177,268	  	
					
Basic net income per ordinary share	  	$	0.21	  	  	$	0.16	  	  	$	0.56	  	  	$	0.31	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Diluted net income per ordinary share	  	$	0.20	  	  	$	0.16	  	  	$	0.56	  	  	$	0.31	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Stock options for the three and nine months ended January 1, 2011 have been excluded from the calculation of diluted earnings per share as they were not exercisable during the periods presented, as the Company had completed the IPO subsequent to that date.
Recent Accounting Pronouncements —The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that have a material impact on results of operations, financial condition, or cash flows, based on current information.
4. Receivables
Receivables consist of (in thousands):

 	  	December 31,
2011	 	 	April 2,
2011	 	
Trade receivables:	  				 				
Credit risk assumed by factors	  	$	82,777	  	 	$	82,111	  	
Credit risk retained by Company	  	 	25,197	  	 	 	20,543	  	
Receivables due from licensees	  	 	18,883	  	 	 	5,315	  	
	  	 	 	 	 	 	 	 	
	  	 	126,857	  	 	 	107,969	  	
Less allowances (1):	  	 	(38,095	) 	 	 	(27,888	) 	
	  	 	 	 	 	 	 	 	
	  	$	88,762	  	 	$	80,081	  	

(1)	Allowances consist of the following: sales returns, discounts and credits, as well as doubtful accounts, which were $0.5 million and $0.4 million, at December 31, 2011 and April 2, 2011, respectively.	
The Company has historically assigned a substantial portion of its trade receivables to factors in the United States and Europe whereby the factors assumed credit risk with respect to such receivables assigned. Under the factor agreements, factors bear the risk of loss from the financial inability of the customer to pay the trade receivable when due, up to such amounts as accepted by the factor, but not the risk of non-payment of such trade receivable for any other reason. The Company provides an allowance for such non-payment risk at the time of sale.
 
8

Receivables are presented net of allowances for sales returns, discounts, markdowns, operational chargebacks and doubtful accounts. Sales returns are determined based on an evaluation of current market conditions and historical returns experience. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on retail sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in net sales.
The allowance for doubtful accounts is determined through analysis of periodic aging of receivables for which credit risk is not assumed by the factors and assessments of collectability based on an evaluation of historic and anticipated trends, the financial conditions of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered.
 
9

5. Property and Equipment
Property and equipment consist of (in thousands):

 	  	December 31,
2011	 	 	April 2,
2011	 	
Furniture and fixtures	  	$	52,840	  	 	$	39,564	  	
Equipment	  	 	10,918	  	 	 	8,593	  	
Computer equipment and software	  	 	17,392	  	 	 	14,042	  	
In-store shops	  	 	40,702	  	 	 	30,970	  	
Leasehold improvements	  	 	130,936	  	 	 	95,020	  	
	  	 	 	 	 	 	 	 	
	  	 	252,788	  	 	 	188,189	  	
Less: accumulated depreciation and amortization	  	 	(107,404	) 	 	 	(77,694	) 	
	  	 	 	 	 	 	 	 	
Subtotal	  	 	145,384	  	 	 	110,495	  	
Construction-in-progress	  	 	10,344	  	 	 	8,828	  	
	  	 	 	 	 	 	 	 	
	  	$	155,728	  	 	$	119,323	  	
	  	 	 	 	 	 	 	 	
Depreciation and amortization of property and equipment for the three and nine months ended December 31, 2011, was $10.2 million and $26.5 million, respectively, and for the three and nine months ended January 1, 2011, was $6.1 million and $17.1 million, respectively. During the three months ended December 31, 2011, the Company recorded an impairment charge of $3.3 million related to two retail stores still in operations. For the nine months ended January 1, 2011, the Company recorded an impairment charge of $0.9 million related to a retail store still in operations.
6. Intangible Assets and Goodwill
The following table discloses the carrying values of intangible assets and goodwill (in thousands):

 	  	December 31, 2011	 	  	April 2, 2011	 	
 	  	Gross
Carrying
Amount	 	  	Accumulated
Amortization	 	  	Net	 	  	Gross
Carrying
Amount	 	  	Accumulated
Amortization	 	  	Net	 	
							
Trademarks	  	$	23,000	  	  	$	10,257	  	  	$	12,743	  	  	$	23,000	  	  	$	9,395	  	  	$	13,605	  	
Lease Rights	  	 	3,838	  	  	 	2,029	  	  	 	1,809	  	  	 	3,823	  	  	 	1,632	  	  	 	2,191	  	
Goodwill	  	 	14,005	  	  	 	—  	  	  	 	14,005	  	  	 	14,005	  	  	 	—  	  	  	 	14,005	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	40,843	  	  	$	12,286	  	  	$	28,557	  	  	$	40,828	  	  	$	11,027	  	  	$	29,801	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The trademarks relate to the Company’s brand name and are amortized over twenty years. Lease rights are amortized over the respective terms of the underlying lease. Amortization expense was $0.4 million and $1.2 million, for the three and nine months ended December 31, 2011, respectively, and $0.3 million and $0.9 million for the three and nine months ended January 1, 2011, respectively.
The Company has allocated $12.1 million and $1.9 million of its recorded goodwill to its Wholesale and Licensing segments, respectively. Goodwill is not amortized but will be assessed for impairment in the last quarter of Fiscal 2012, or whenever impairment indicators exist. As of December 31, 2011, cumulative impairment related to goodwill totaled $5.4 million. There were no charges related to the impairment of goodwill in the periods presented.
 
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Estimated amortization expense for each of the next five years is as follows (in thousands):

Remainder of Fiscal 2012	  	$	443	  	
Fiscal 2013	  	 	1,493	  	
Fiscal 2014	  	 	1,407	  	
Fiscal 2015	  	 	1,388	  	
Fiscal 2016	  	 	1,381	  	
Thereafter	  	 	8,440	  	
	  	 	 	 	
	  	$	14,552	  	
	  	 	 	 	
As a result of an impairment charge recognized during the nine months ended January 1, 2011, related to a retail store, as described in Note 5, the Company recognized an impairment charge of $1.8 million for lease rights related to that store.
7. Credit Facilities
The Company has a secured revolving credit facility as amended (the “Credit Facility”), which expires on September 15, 2015. The Credit Facility provides for up to $100.0 million of borrowings and a sub-limit for loans and letters of credit to the Company’s European subsidiaries of $35.0 million. The Credit Facility provides for aggregate credit available to the Company equal to the lesser of (i) $100.0 million or (ii) the sum of specified percentages of eligible receivables and eligible inventory, as defined, plus $30.0 million. Amounts outstanding under the Credit Facility are collateralized by substantially all the assets of the Company. The Credit Facility contains covenants that, among other things, require the Company to maintain a fixed charge coverage ratio, set limits on capital expenditures and indebtedness, and restrict the incurrence of additional liens and cash dividends.
Borrowings under the Credit Facility accrue interest at the rate per annum announced from time to time by the agent of 1.25% above the prevailing applicable prime rate, or at a per annum rate equal to 2.25% above the prevailing LIBOR rate. The weighted average interest rate for the Credit Facility was 4.07% for the nine months ended December 31, 2011 and 4.57% for the nine months ended January 1, 2011. The Credit Facility requires an annual facility fee of $0.1 million, and an annual commitment fee of 0.35% on the unused portion of the available credit under the Credit Facility.
As of December 31, 2011, the amount of borrowings outstanding on the Credit Facility was $15.5 million, and the amount available for future borrowings was $46.6 million. The largest amount borrowed during the nine months ended December 31, 2011 was $34.8 million. At December 31, 2011, there were documentary letters of credit outstanding for approximately $24.7 million and stand-by letters of credit outstanding of $11.1 million.
8. Commitments and Contingencies
In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company’s management does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.
9. Fair Value of Financial Instruments
Financial assets and liabilities are measured at fair value using a valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date.
Level 2 – Valuations based on quoted inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The Company has historically entered into forward exchange contracts to hedge the foreign currency exposure of its firm commitments to purchase certain inventory from its foreign suppliers, as well as commitments for certain services. The forward contracts that are used in the program mature in eighteen months or less, consistent with the related purchase commitments. The Company attempts to hedge the majority of its total anticipated purchase and service contracts. Gains and losses applicable to derivatives used for purchase commitments are recognized in cost of sales, and those applicable to other services are recognized in
 
11

selling, general and administrative expenses. In determining the fair value of the Company’s foreign currency forward contracts, the Company’s only derivative instruments, observable inputs were available at December 31, 2011, and thus were relied upon for the valuation of the Company’s forward contracts.
The fair value of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or (liabilities) to the Company. Amounts recorded to the statement of operations related to the changes in fair value of foreign currency contracts during the nine months ended December 31, 2011, as a net gain, were approximately $3.8 million, most of which were included in cost of goods sold. All contracts are categorized in Level 2 of the fair value hierarchy as shown in the following table (in thousands):

 	  	 	 	 	Fair value at December 31, 2011, using:	 	
(In thousands)	  	Total	 	 	Quoted prices in
active markets for
identical assets
(Level 1)	 	  	Significant other
observable inputs
(Level 2)	 	 	Significant
unobservable
inputs
(Level 3)	 	
Foreign currency forward contracts- U.S. Dollar	  	$	(619	) 	 	$	—  	  	  	$	(619	) 	 	$	—  	  	
Foreign currency forward contracts- Euro	  	 	2,915	  	 	 	—  	  	  	 	2,915	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	2,296	  	 	$	—  	  	  	$	2,296	  	 	$	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value. Borrowings under the Credit Facility are recorded at face value as the fair value of the Credit Facility is synonymous with its recorded value as it is a short-term debt facility due to its revolving nature.
10. Stock-Based Compensation
The Company issues equity grants to certain employees and directors of the Company at the discretion of the Company’s Compensation Committee. The Company has two equity plans, one adopted in Fiscal 2008, the Michael Kors (USA), Inc. Stock Option Plan (as amended and restated, the “2008 Plan”), and the other adopted in the third fiscal quarter of Fiscal 2012, the Michael Kors Holdings Limited Omnibus Incentive Plan (the “2012 Plan”). The 2008 plan provided for the granting of share options only and was authorized to issue up to 23,980,823 ordinary shares. As of December 31, 2011, there are no shares available for the granting of equity awards under the 2008 plan. The 2012 plan allows for the granting of share options, restricted shares and restricted share units, and other equity awards, and authorizes a total issuance of up to 15,246,000 ordinary shares. At December 31, 2011, there were 12,729,815 ordinary shares available for the granting of equity awards under the 2012 Plan. Option grants issued from the 2008 plan generally expire ten years from the date of the grant, and those issued under the 2012 plan generally expire seven years from the date of the grant.
Stock Options
Stock options are generally exercisable at no less than the fair market value on the date of grant. The Company has issued two types of option grants, those that vest based on the attainment of a performance target and those that vest based on the passage of time. Performance based stock options may vest based upon the attainment of one of two performance measures. One performance measure is an individual performance target, which is based upon certain performance targets unique to the individual grantee, and the other measure is a company-wide performance target, which is based on a cumulative minimum growth requirement in consolidated net equity. The individual performance target vests 20% of the total option grant each year the target is satisfied. The individual has ten years in which to achieve five individual performance vesting tranches. The company-wide performance target must be achieved over the ten-year term. Performance is measured at the end of the term, and any unvested options under the grant vest if the target is achieved. The Company-wide performance target is established at the time of the grant. The target metrics underlying individual performance vesting requirements are established for each recipient each year up until such time as the grant is fully vested. Options subject to time based vesting requirements become vested in four equal increments on each of the first, second, third and fourth anniversaries of the date on which such options were awarded.
 
12

The following table summarizes the share options activity for the 2008 and 2012 plans, and information about options outstanding at December 31, 2011:

 	  	Number of
Options	 	 	Weighted
Average
Exercise price	 	  	Weighted
Average
Remaining
Contractual
Live (years)	 	  	Aggregate
Intrinsic
Value
(in thousands)	 	
Outstanding at April 2, 2011	  	 	19,414,315	  	 	$	3.06	  	  				  				
Granted	  	 	4,889,084	  	 	$	15.08	  	  				  				
Redeemed*	  	 	(1,140,984	) 	 	$	2.75	  	  				  				
Exercised	  	 	(1,993,640	) 	 	$	2.69	  	  				  				
Canceled/forfeited	  	 	(352,372	) 	 	$	6.88	  	  				  				
	  	 	 	 	 				  				  				
Outstanding at December 31, 2011	  	 	20,816,403	  	 	$	5.87	  	  	 	8.08	  	  	$	445,094	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Vested or expect to vest at December 31, 2011	  	 	18,182,813	  	 	$	5.71	  	  	 	8.02	  	  				
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Vested and exercisable at December 31, 2011	  	 	7,575,673	  	 	$	2.82	  	  	 	6.90	  	  	$	185,103	  	

*	The Company redeemed certain option grants during August 2011, for which it paid cash consideration of $10.7 million, representing the $12.12 share value established at the time of the private placement, less the exercise price of the option grants in the aggregate. The redemption was charged to selling, general and administrative expenses during the nine months ended December 31, 2011.	
The total intrinsic value of options exercised during the fiscal quarter ended December 31, 2011 was $35.7 million. The cash received from options exercised during fiscal quarter ended December 31, 2011, was $5.4 million. There were no exercises prior to the fiscal quarter ended December 31, 2011.
The weighted average grant date fair value was $8.60 and $7.54 for options granted during the three and nine months ended December 31, 2011, respectively. The weighted average grant date fair value was $1.20 for options granted during the three months ended January 1, 2011. There were no options granted during the first six months of Fiscal 2011.
The following table represents assumptions used to estimate the fair value of options:

 	  	Three Months Ended	 	 	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	December 31,
2011	 	 	January 1,
2011	 	
	  			 			 			 			
Expected dividend yield	  	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	
Volatility factor	  	 	50.2	% 	 	 	45.7	% 	 	 	46.1	% 	 	 	45.7	% 	
Weighted average risk-free interest rate	  	 	1.03	% 	 	 	2.7	% 	 	 	1.9	% 	 	 	2.7	% 	
Expected life of option	  	 	4.8 years	  	 	 	10.0 years	  	 	 	8.0 years	  	 	 	10.0 years	  	
Restricted Shares
The Company grants restricted shares and restricted share units at the fair market value at the date of the grant. Expense for restricted share grants is calculated based on the intrinsic value of the grant, which is the difference between the cost to the recipient and the fair market value of the underlying share (grants are generally issued at no cost to the recipient). Expense is recognized ratably over the vesting period which is generally four years from the date of the grant. Similar to share options, restricted share grants vest in four equal increments on each of the first, second, third and fourth anniversaries of the date on which such grants were awarded. Restricted share units vest in full on the first anniversary of the date of the grant.
 
13

The following table summarizes restricted shares and restricted share units for the 2012 Plan as of December 31, 2011 and changes during the nine month period then ended:

 	  	Number of Unvested
Restricted Shares/Units	 	  	Weighted
Average Grant
Date Fair Value	 	
Unvested at April 2, 2011	  	 	—  	  	  	$	—  	  	
Granted	  	 	683,051	  	  	$	20.00	  	
Vested	  	 	—  	  	  	$	—  	  	
Canceled/forfeited	  	 	—  	  	  	$	—  	  	
	  	 	 	 	  				
Unvested at December 31, 2011	  	 	683,051	  	  	$	20.00	  	
	  	 	 	 	  				
Compensation expense attributable to stock-based compensation for the three months ended December 31, 2011, was approximately $20.0 million. There was no compensation expense recognized prior to the third quarter ended December 31, 2011, as the Company had not completed an IPO which was one of the vesting requirements for all equity grants. As of December 31, 2011, the remaining unrecognized stock-based compensation expense for non-vested share options and restricted shares to be expensed in future periods is $57.6 million, and the related weighted-average period over which it is expected to be recognized is 3.4 years. There were 7,575,673 and 13,240,730 vested and non-vested outstanding options, respectively, at December 31, 2011. There were 683,051 unvested restricted grants at December 31, 2011. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on its historical forfeiture rate since the inception of stock option granting. The estimated value of future forfeitures for stock options and restricted shares as of December 31, 2011 is approximately $4.3 million.
11. Segment Information
The Company operates its business in three reportable segments—Retail, Wholesale and Licensing—which are based on its business activities and organization. The operating segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by executive management in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are net sales or revenue (in the case of Licensing) and operating income for each segment. The Company’s reportable segments represent channels of distribution that offer similar merchandise, customer experience and sales/marketing strategies. Sales of the Company’s products through Company owned stores for the Retail segment include “Collection,” “Lifestyle” including “concessions,” and outlet stores located throughout North America, Europe, and Japan. Products sold through the Retail segment include women’s apparel, accessories (which include handbags and small leather goods such as wallets), footwear and licensed products, such as watches, fragrances and eyewear. The Wholesale segment includes sales primarily to major department stores and specialty shops throughout North America, Europe and Japan. Products sold through the Wholesale segment include accessories (which include handbags and small leather goods such as wallets), footwear and women’s and men’s apparel. The Licensing segment includes royalties earned on licensed products and use of the Company’s trademarks, and rights granted to third parties for the right to sell the Company’s products in certain geographical regions such as Korea, the Philippines, Singapore, Malaysia, the Middle East and Turkey. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Corporate overhead expenses are allocated to the segments based upon specific usage or other allocation methods.
 
14

The Company has allocated $12.1 million and $1.9 million of its recorded goodwill to its Wholesale and Licensing segments, respectively. The Company does not have identifiable assets separated by segment. The following table presents the key performance information of the Company’s reportable segments (in thousands):
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT OPERATING DATA
(Unaudited)

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
					
Revenue:	  				  				  				  				
Net sales: Retail	  	$	199,376	  	  	$	109,067	  	  	$	454,753	  	  	$	248,706	  	
  Wholesale	  	 	154,612	  	  	 	99,757	  	  	 	419,442	  	  	 	282,558	  	
Licensing	  	 	19,618	  	  	 	13,628	  	  	 	48,069	  	  	 	32,072	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Revenue	  	$	373,606	  	  	$	222,452	  	  	$	922,264	  	  	$	563,336	  	

Income from operations:	  				  				  				  				
Retail	  	$	34,711	  	  	$	27,148	  	  	$	87,892	  	  	$	46,487	  	
Wholesale	  	 	17,778	  	  	 	10,641	  	  	 	50,523	  	  	 	31,855	  	
Licensing	  	 	12,098	  	  	 	7,142	  	  	 	30,426	  	  	 	15,890	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income from operations	  	$	64,587	  	  	$	44,931	  	  	$	168,841	  	  	$	94,232	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Depreciation and amortization expense for each segment are as follows (in thousands):

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
Depreciation and Amortization:	  				  				  				  				
Retail (1)	  	$	7,433	  	  	$	4,258	  	  	$	18,657	  	  	$	11,647	  	
Wholesale	  	 	3,124	  	  	 	2,084	  	  	 	8,801	  	  	 	6,322	  	
Licensing	  	 	69	  	  	 	33	  	  	 	184	  	  	 	86	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total depreciation and amortization	  	$	10,626	  	  	$	6,375	  	  	$	27,642	  	  	$	18,055	  	

(1)	Excluded in the above table are impairment charges related to the retail segment for $3.3 million for the three and nine months ended December 31, 2011, and $2.8 million for the nine months ended January 1, 2011.	
 
15

Total revenue (as recognized based on country of origin), and long-lived assets by geographic location of the consolidated Company are as follows (in thousands):

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
					
North America (U.S. and Canada)	  	$	343,432	  	  	$	213,795	  	  	$	843,902	  	  	$	540,892	  	
Europe	  	 	27,193	  	  	 	8,398	  	  	 	72,163	  	  	 	22,051	  	
Other regions	  	 	2,981	  	  	 	259	  	  	 	6,199	  	  	 	393	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total revenues	  	$	373,606	  	  	$	222,452	  	  	$	922,264	  	  	$	563,336	  	

									
 	  	As of	 	
 	  	December 31,
2011	 	  	April 2,
2011	 	
Long-lived assets:	  				  				
North America (U.S. and Canada)	  	$	139,669	  	  	$	113,702	  	
Europe	  	 	25,786	  	  	 	19,539	  	
Other regions	  	 	4,825	  	  	 	1,878	  	
	  	 	 	 	  	 	 	 	
Total Long-lived assets:	  	$	170,280	  	  	$	135,119	  	
	  	 	 	 	  	 	 	 	
12. Agreements with Shareholders and Related Party Transactions –
The shareholder’s agreement between the Company, SHL-Kors Limited (the Company’s former parent), and Mr. Kors, which provided for the right of the estate of Mr. Kors for a period of 180 days after his death, to elect to sell to the Company all, but not less than all, of the ordinary shares of MKHL then owned by Mr. Kors, was terminated prior to the time of the reorganization as described in Note 2. As a result of this termination, the ordinary shares that were presented in temporary equity in the Company’s consolidated balance sheet at April 2, 2011 as “contingently redeemable ordinary shares” for a value of $6.7 million (which represented the value of the ordinary shares on the date they were acquired by Mr. Kors), were reclassified to permanent equity during July 2011.
During July 2011, the note payable to the Company’s former parent, for $101.7 million, was exchanged for 475,796 preference shares and 6,579,662 ordinary shares, after taking into effect the impact of the share exchange that resulted from the reorganization discussed in Note 2. Accordingly, as of December 31, 2011, there are no outstanding balances related to the note.
 
16

Exhibit 99.2
MICHAEL KORS HOLDINGS LIMITED
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE THREE AND NINE MONTHS ENDED
DECEMBER 31, 2011 AND JANUARY 1, 2011

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and notes thereto included as part of this interim report. This report contains forward-looking statements that are based upon current expectations. We sometimes identify forward-looking statements with such words as “may,” “expect,” “anticipate,” “estimate,” “seek,” “intend,” “believe” or similar words concerning future events. The forward-looking statements contained herein, include, without limitation, statements concerning future revenue sources and concentration, gross profit margins, selling and marketing expenses, capital expenditures, research and development expenses, general and administrative expenses, capital resources, new stores, additional financings or borrowings and additional losses and are subject to risks and uncertainties including, but not limited to, those discussed in this report that could cause actual results to differ materially from the results contemplated by these forward-looking statements. We also urge you to carefully review “Cautionary Note Regarding Forward-looking Statements” and the risk factors set forth under “Risk Factors” in our Registration Statement on Form F-1 filed on December 2, 2011 with the Securities and Exchange Commission.
Overview
Our Business
We are a rapidly growing global luxury lifestyle brand led by a world-class management team and a renowned, award-winning designer. Since launching his namesake brand 30 years ago, Michael Kors has featured distinctive designs, materials and craftsmanship with a jet-set aesthetic that combines stylish elegance and a sporty attitude. Mr. Kors’ vision has taken the Company from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a presence in 74 countries. As a highly recognized luxury lifestyle brand in North America with accelerating awareness in targeted international markets, we have experienced exceptional sales momentum and have a clear trajectory for significant future growth. Over the years, we have successfully expanded beyond apparel into accessories (including handbags, small leather goods, eyewear, jewelry and watches) and footwear, which together now account for the majority of our wholesale and retail sales. We have also expanded our distribution capabilities beyond wholesale into retail which account for a major portion of our total revenue.
We operate our business in three segments—retail, wholesale and licensing—and we have a strategically controlled global distribution network focused on company-operated retail stores, leading department stores, specialty stores and select licensing partners. As of December 31, 2011, our retail segment included 188 North American retail stores, including concessions, and 43 international retail stores, including concessions, in Europe and Japan. As of December 31, 2011, our wholesale segment included wholesale sales through approximately 1,860 department store and specialty store doors in North America and wholesale sales through approximately 478 department store and specialty store doors internationally. Our remaining revenue is generated through our licensing segment, through which we license to third parties certain production, sales and/or distribution rights. During the first nine months of Fiscal 2012, our licensing segment accounted for approximately 5.2% of our total revenue and consisted primarily of royalties earned on licensed products and our geographic licenses.
We offer two primary collections: the Michael Kors luxury collection and the MICHAEL Michael Kors accessible luxury collection. The Michael Kors collection establishes the aesthetic authority of our entire brand and is carried in many of our retail stores as well as in the finest luxury department stores in the world. In 2004, we introduced the MICHAEL Michael Kors collection, which has a strong focus on accessories, in addition to offering footwear and apparel, and addresses the significant demand opportunity in accessible luxury goods. Taken together, our two collections target a broad customer base while retaining a premium luxury image.
As of February 14, 2012, we had 191,049,948 shares of ordinary shares outstanding.
Certain Factors Affecting Financial Condition and Results of Operations
Broaden Distribution Capabilities Beyond Wholesale into Retail . Over the years, we have successfully broadened our distribution capabilities beyond wholesale into retail, and we believe that this trend will continue as our retail store network grows at a faster rate than wholesale. We believe that retail allows greater control over the shopping environment, merchandise selection and many other aspects of the shopping experience that attracts and retains loyal customers and increases sales.
Costs of Manufacturing . Our industry is subject to volatility in costs related to certain raw materials used in the manufacturing of our products. This volatility applies primarily to costs driven by commodity prices, which can increase or decrease dramatically over a short period of time. These fluctuations may have a material impact on our sales, results of operations and cash flows to the extent they occur. We use commercially reasonable efforts to mitigate these effects by sourcing our products as efficiently as possible. In addition, manufacturing labor costs are also subject to degrees of volatility based on local and global economic conditions. We use commercially reasonable efforts to source from localities that suit our manufacturing standards and result in more favorable labor driven costs to our products.
 
1

Demand for Our Accessories and Related Merchandise . Our performance is affected by trends in the luxury goods industry, as well as shifts in demographics and changes in lifestyle preferences. Currently, demand for our products is predicted to grow. According to the Altagamma Studies*, demand for the worldwide luxury goods industry is predicted to grow from approximately $230.1 billion in 2010 to between $299.3 billion and $305.9 billion in 2014. The accessories product category represented 25% of total sales for the worldwide luxury goods industry in 2010 and was the fastest growing product category between 2005 and 2010, growing at a compound annual rate of 9%. We believe that we are well positioned to capitalize on the continued growth of the accessories product category, as it is one of our primary product category focuses.
 
*	Comprised of: the Luxury Goods Worldwide Market Study, 2011, Luxury Goods Worldwide Market Study Spring 2011 Update, the Luxury Goods Worldwide Market Study, and the Altagamma 2006 Worldwide Markets Monitor (together, the “Altagamma Studies”). These studies were prepared by the Altagamma Foundation in cooperation with Bain & Company and can be obtained free of charge or at a nominal cost by contacting Bain & Company’s media contacts at cheryl.krauss@bain.com or frank.pinto@bain.com. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from  third-party sources.	
Segment Information
We generate revenue through three business segments: retail, wholesale and licensing. The following table presents our revenue and income from operations by segment for the three and nine months ended December 31, 2011 and January 1, 2011 (in thousands):

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
					
Revenue:	  				  				  				  				
Net sales: Retail	  	$	199,376	  	  	$	109,067	  	  	$	454,753	  	  	$	248,706	  	
  Wholesale	  	 	154,612	  	  	 	99,757	  	  	 	419,442	  	  	 	282,558	  	
Licensing	  	 	19,618	  	  	 	13,628	  	  	 	48,069	  	  	 	32,072	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Revenue	  	$	373,606	  	  	$	222,452	  	  	$	922,264	  	  	$	563,336	  	

Income from operations:	  				  				  				  				
Retail	  	$	34,711	  	  	$	27,148	  	  	$	87,892	  	  	$	46,487	  	
Wholesale	  	 	17,778	  	  	 	10,641	  	  	 	50,523	  	  	 	31,855	  	
Licensing	  	 	12,098	  	  	 	7,142	  	  	 	30,426	  	  	 	15,890	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income from operations	  	$	64,587	  	  	$	44,931	  	  	$	168,841	  	  	$	94,232	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retail
From the beginning of Fiscal 2007, when we first undertook our major retail growth initiative, through December 31, 2011, we have leveraged our successful retail store formats by opening a total of 221 new stores. During this time period, we have grown our North American retail presence significantly, increasing our North American store count by 178 stores, as well as increasing our international store count by 43 stores.
 
2

The following table presents the growth in our network of retail stores during the three and nine months ended December 31, 2011 and January1, 2011:

 	  	Three Months Ended	 	 	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	December 31,
2011	 	 	January 1,
2011	 	
Full price retail stores including concessions:	  				 				 				 				
Number of stores	  	 	155	  	 	 	105	  	 	 	155	  	 	 	105	  	
Increase during period	  	 	23	  	 	 	12	  	 	 	42	  	 	 	42	  	
Percentage increase vs. prior period	  	 	47.6	% 	 	 	72.1	% 	 	 	47.6	% 	 	 	72.1	% 	
Total gross square footage	  	 	311,783	  	 	 	201,866	  	 	 	311,783	  	 	 	201,866	  	
Average square footage per store	  	 	2,012	  	 	 	1,923	  	 	 	2,012	  	 	 	1,923	  	
					
Outlet stores:	  				 				 				 				
Number of stores	  	 	76	  	 	 	51	  	 	 	76	  	 	 	51	  	
Increase during period	  	 	5	  	 	 	4	  	 	 	23	  	 	 	8	  	
Percentage increase vs. prior period	  	 	49.0	% 	 	 	18.6	% 	 	 	49.0	% 	 	 	18.6	% 	
Total gross square footage	  	 	212,504	  	 	 	140,301	  	 	 	212,504	  	 	 	140,301	  	
Average square footage per store	  	 	2,796	  	 	 	2,751	  	 	 	2,796	  	 	 	2,751	  	
Wholesale
We sell our products directly to department stores across North America and Europe to accommodate consumers who prefer to shop at major department stores. In addition, we sell to specialty stores for those consumers who enjoy the boutique experience afforded by such stores. We continue to focus our sales efforts and drive sales in existing locations by enhancing presentation, primarily through the creation of more shop-in-shops with our proprietary fixtures that effectively communicate our brand and create a more personalized shopping experience for consumers. We tailor our assortments through wholesale product planning and allocation processes to better match the demands of our department store customers in each local market.
The following table presents the growth in our network of wholesale doors during the three and nine months ended December 31, 2011 and January 1, 2011:

 	  	Three Months Ended	 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	  	December 31,
2011	 	  	January 1,
2011	 	
Number of wholesale doors	  	 	2,338	  	 	 	1,805	  	  	 	2,338	  	  	 	1,805	  	
Increase/(decrease) during period	  	 	(12	) 	 	 	30	  	  	 	306	  	  	 	205	  	
Licensing
We generate revenue through product and geographic licensing arrangements. Our product license agreements allow third parties to use our brand name and trademarks in connection with the manufacturing and sale of a variety of products, including watches, fragrances, eyewear and jewelry. In our product licensing arrangements, we take an active role in the design process, marketing and distribution of products under our brands. Our geographic licensing arrangements allow third parties to use our tradenames in connection with the retail and/or wholesale sales of our branded products in specific geographic regions.
 
3

Key Performance Indicators and Statistics
We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in thousands):

 	  	Three Months Ended	 	 	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	December 31,
2011	 	 	January 1,
2011	 	
Total revenue	  	$	373,606	  	 	$	222,452	  	 	$	922,264	  	 	$	563,336	  	
Gross profit as a percent of total revenue	  	 	59.4	% 	 	 	57.0	% 	 	 	57.9	% 	 	 	55.4	% 	
Income from operations	  	$	64,587	  	 	$	44,931	  	 	$	168,841	  	 	$	94,232	  	
Retail net sales- North America	  	$	183,643	  	 	$	105,474	  	 	$	418,550	  	 	$	241,106	  	
Retail net sales- Europe	  	$	12,752	  	 	$	3,334	  	 	$	30,004	  	 	$	7,207	  	
Retail net sales- Japan	  	$	2,981	  	 	$	259	  	 	$	6,199	  	 	$	393	  	
Increase in comparable store net sales- North American	  	 	38.0	% 	 	 	60.4	% 	 	 	40.8	% 	 	 	48.4	% 	
Increase in comparable store net sales- Europe	  	 	34.4	% 	 	 	0.5	% 	 	 	26.5	% 	 	 	20.0	% 	
Increase in comparable store net sales- Japan *	  	 	59.1	% 	 	 	n/a	  	 	 	47.2	% 	 	 	n/a	  	
					
Wholesale net sales- North America	  	$	140,172	  	 	$	94,693	  	 	$	377,283	  	 	$	267,714	  	
Wholesale net sales- Europe	  	$	14,440	  	 	$	5,064	  	 	$	42,159	  	 	$	14,844	  	
 
*	Where n/a is used, stores in that region were not open for the requisite comparable period.	
General Definitions for Operating Results
Net sales consist of sales from comparable retail stores and non-comparable retail stores, net of returns and markdowns, as well as those made to our wholesale customers, net of returns, discounts, markdowns and allowances.
Comparable store sales include sales from a store that has been opened for one full year after the end of the first month of its operations. All comparable store sales are presented on a 52-week basis.
Royalty revenue from licensing consists of fees charged on sales of licensed products to our licensees as well as contractual royalty rates for the use of our trademarks in certain geographic territories.
Cost of goods sold includes the cost of inventory sold, freight-in on merchandise and foreign currency exchange gains/losses related to forward contracts for purchase commitments.
Gross profit is net sales minus cost of goods sold.
Selling, general and administrative expenses consist of warehousing and distribution costs, rent for our distribution centers, store payroll, store occupancy costs (such as rent, common area maintenance, real estate taxes and utilities), information technology and systems costs, corporate payroll and related benefits, advertising and promotion expense and other general expenses.
Depreciation and amortization includes depreciation and amortization of fixed and definite-lived intangible assets.
Impairment charges consist of charges to write-down both fixed and intangible assets to fair value.
Income from operations consists of gross profit minus total operating expenses.
Interest expense represents interest and fees on our revolving credit facility (“Credit Facility”) and amortization of deferred financing costs.
Foreign currency gain represents unrealized income or loss from the re-measurement of monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries.
 
4

Results of Operations
Comparison of the three months ended December 31, 2011 with the three months ended January 1, 2011
The following table details the results of our operations for the three months ended December 31, 2011 and for the three months ended January 1, 2011, and expresses the relationship of certain line items to total revenue as a percentage (dollars in thousands):

 	  	Three Months Ended	 	 	 	 	 	 	 	 	% of Total
Revenue
the three months	 	 	% of Total
Revenue
the three months	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	$ Change	 	 	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
							
Statement of Operations Data:	  				 				 				 				 				 				
Net sales	  	$	353,988	  	 	$	208,824	  	 	$	145,164	  	 	 	69.5	% 	 				 				
Royalty revenue	  	 	19,618	  	 	 	13,628	  	 	 	5,990	  	 	 	44.0	% 	 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total revenue	  	 	373,606	  	 	 	222,452	  	 	 	151,154	  	 	 	67.9	% 	 				 				
Cost of goods sold	  	 	151,701	  	 	 	95,688	  	 	 	56,013	  	 	 	58.5	% 	 	 	40.6	% 	 	 	43.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Gross profit	  	 	221,905	  	 	 	126,764	  	 	 	95,141	  	 	 	75.1	% 	 	 	59.4	% 	 	 	57.0	% 	
Selling, general and administrative expenses	  	 	143,400	  	 	 	75,458	  	 	 	67,942	  	 	 	90.0	% 	 	 	38.4	% 	 	 	33.9	% 	
Depreciation and amortization	  	 	10,626	  	 	 	6,375	  	 	 	4,251	  	 	 	66.7	% 	 	 	2.8	% 	 	 	2.9	% 	
Impairment of long-lived assets	  	 	3,292	  	 	 	—  	  	 	 	3,292	  	 				 	 	0.9	% 	 	 	0.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total operating expenses	  	 	157,318	  	 	 	81,833	  	 	 	75,485	  	 	 	92.2	% 	 	 	42.1	% 	 	 	36.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Income from operations	  	 	64,587	  	 	 	44,931	  	 	 	19,656	  	 	 	43.7	% 	 	 	17.3	% 	 	 	20.2	% 	
Interest expense, net	  	 	452	  	 	 	468	  	 	 	(16	) 	 	 	-3.4	% 	 	 	0.1	% 	 	 	0.2	% 	
Foreign currency gain	  	 	(2,191	) 	 	 	(2,421	) 	 	 	230	  	 	 	-9.5	% 	 	 	-0.6	% 	 	 	-1.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Income before provision for income taxes	  	 	66,326	  	 	 	46,884	  	 	 	19,442	  	 	 	41.5	% 	 	 	17.8	% 	 	 	21.1	% 	
Provision for income taxes	  	 	27,295	  	 	 	19,094	  	 	 	8,201	  	 	 	43.0	% 	 	 	7.3	% 	 	 	8.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Net income	  	$	39,031	  	 	$	27,790	  	 	$	11,241	  	 	 	40.4	% 	 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total Revenue
Total revenue increased $151.2 million, or 67.9%, to $373.6 million for the three months ended December 31, 2011, compared to $222.5 million for the three months ended January 1, 2011. The increase was the result of an increase in our comparable and non-comparable retail store sales and wholesale sales, as well as increases in our royalty revenue.
The following table details revenues for our three business segments (dollars in thousands):

 	  	Three Months Ended	 	  	 	 	  	 	 	 	% of Total
Revenue for
the three months	 	 	% of Total
Revenue for
the three months	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	$ Change	 	  	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
Revenue:	  				  				  				  				 				 				
Net sales: Retail	  	$	199,376	  	  	$	109,067	  	  	$	90,309	  	  	 	82.8	% 	 	 	53.4	% 	 	 	49.0	% 	
  Wholesale	  	 	154,612	  	  	 	99,757	  	  	 	54,855	  	  	 	55.0	% 	 	 	41.4	% 	 	 	44.9	% 	
Licensing	  	 	19,618	  	  	 	13,628	  	  	 	5,990	  	  	 	44.0	% 	 	 	5.2	% 	 	 	6.1	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Total revenue	  	$	373,606	  	  	$	222,452	  	  	$	151,154	  	  				 				 				
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Retail
Net sales from our retail stores increased $90.3 million, or 82.8%, to $199.4 million for the three months ended December 31, 2011, compared to $109.1 million for the three months ended January 1, 2011. We operated 231 retail stores, including concessions, as of December 31, 2011, compared to 156 retail stores, including concessions, as of January 1, 2011. During the three months ended December 31, 2011, our comparable store sales growth increased $41.3 million, or 38.0%, from the three months ended January 1,
 
5

2011. The growth in our comparable store sales was primarily due to an increase in sales of our accessories line and watches during the three months ended December 31, 2011. In addition, our non-comparable store sales were $49.0 million during the three months ended December 31, 2011, which was primarily the result of opening 75 new stores since January 1, 2011.
Wholesale
Net sales to our wholesale customers increased $54.9 million, or 55.0%, to $154.6 million for the three months ended December 31, 2011, compared to $99.8 million for the three months ended January 1, 2011. The increase in our wholesale net sales occurred primarily as a result of increased sales of our accessories line during the three months ended December 31, 2011, as we continue to enhance our presence in department and specialty stores by converting more doors to shop-in-shops, and working with existing retailers in optimizing our presence in their stores. In addition, our net sales from our European operations increased approximately threefold during the three months ended December 31, 2011 as compared to the three months ended January 1, 2011, due largely to an increase in doors to 478 from 246 in the same period last year.
Licensing
Royalties earned on our licensing agreements increased $6.0 million, or 44.0%, to $19.6 million for the three months ended December 31, 2011, compared to $13.6 million for the three months ended January 1, 2011. The increase in royalties was primarily due to royalties earned on licensing agreements related to sales of watches.
Gross Profit
Gross profit increased $95.1 million, or 75.1%, to $221.9 million during the three months ended December 31, 2011, compared to $126.8 million for the three months ended January 1, 2011. Gross profit as a percentage of total revenue increased to 59.4% during the three months ended December 31, 2011, compared to 57.0% during the three months ended January 1, 2011. The increase in gross profit margin was primarily due to the growth in our retail net sales relative to our overall total revenue growth during the period, as our retail net sales generate higher gross profit margins relative to those of wholesale. In addition, we experienced increases of approximately 370 basis points in gross profit margin from our wholesale segment. The increase in gross profit margin on our wholesale segment largely resulted from the increase in our wholesale European net sales, as a component of total wholesale net sales, which impacted gross profit margin favorably as our European wholesale operations benefited from the revaluation of foreign currency exchange contracts during the three months ended December 31, 2011.
Total Operating Expense
Total operating expenses increased $75.5 million, or 92.2%, to $157.3 million during the three months ended December 31, 2011, compared to $81.8 million for the three months ended January 1, 2011. Total operating expenses increased to 42.1% as a percentage of total revenue for the three months ended December 31, 2011, compared to 36.8% for the three months ended January 1, 2011. The components that comprise total operating expenses are explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $67.9 million, or 90.0%, to $143.4 million during the three months ended December 31, 2011, compared to $75.5 million for the three months ended January 1, 2011. The increase was primarily due to increases in our retail occupancy and salary costs of $31.7 million, increases in corporate employee-related costs of $32.2 million, and an increase in professional fees of approximately $5.2 million related to expenses incurred in our initial public offering (“IPO”). The increase in our retail occupancy and payroll costs was due to operating 231 retail stores versus 156 retail stores in the prior period. The increase in our corporate employee-related costs was due primarily to compensation expense related to equity grants of approximately $20.0 million, as well as to an increase in our corporate staff to accommodate our North American and international growth. The equity compensation expense represents a one-time charge of approximately $15.9 million, for expense related to periods prior to the three months ended December 31, 2011, as no equity compensation expense was recognized previously as an initial public offering had not occurred, as well as a charge for $4.1 million which represents the equity compensation expense related to the three months ended December 31, 2011. Selling, general and administrative expenses as a percentage of total revenue increased to 38.4% during the three months ended December 31, 2011, compared to 33.9% for the three months ended January 1, 2011. The increase as a percentage of total revenue was primarily due to the one-time charge for equity compensation expense and IPO fees recognized during the three months ended December 31, 2011.
Depreciation and Amortization
Depreciation and amortization increased $4.3 million, or 66.7%, to $10.6 million during the three months ended December 31, 2011, compared to $6.4 million for the three months ended January 1, 2011. Increases in depreciation and amortization were primarily due to an increase in the build-out of our new retail locations, new shop-in-shop locations and investments made in our information systems infrastructure to accommodate our growth. Depreciation and amortization decreased to 2.8% as a percentage of total revenue during the three months ended December 31, 2011, compared to 2.9% for the three months ended January 1, 2011.
 
6

Impairment on Long-Lived Assets
We recognized an impairment charge of approximately $3.3 million on fixed assets related to two of our retail locations during the three months ended December 31, 2011. There were no impairment charges on long-lived assets during the three months ended January 1, 2011.
Income from Operations
As a result of the foregoing, income from operations increased $19.7 million, or 43.7%, to $64.6 million during the three months ended December 31, 2011, compared to $44.9 million for the three months ended January 1, 2011. Income from operations as a percentage of total revenue decreased to 17.3% during the three months ended December 31, 2011, compared to 20.2% for the three months ended January 1, 2011.
The following table details income from operations for our three business segments (dollars in thousands):

 	  	Three Months Ended	 	  	 	 	  	 	 	 	% of Net Sales/
Revenue for
the three months	 	 	% of Net Sales/
Revenue for
the three months	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	$ Change	 	  	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
Income from operations:	  				  				  				  				 				 				
Retail	  	$	34,711	  	  	$	27,148	  	  	$	7,563	  	  	 	27.9	% 	 	 	17.4	% 	 	 	24.9	% 	
Wholesale	  	 	17,778	  	  	 	10,641	  	  	 	7,137	  	  	 	67.1	% 	 	 	11.5	% 	 	 	10.7	% 	
Licensing	  	 	12,098	  	  	 	7,142	  	  	 	4,956	  	  	 	69.4	% 	 	 	61.7	% 	 	 	52.4	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Income from operations	  	$	64,587	  	  	$	44,931	  	  	$	19,656	  	  	 	43.7	% 	 				 				
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Retail
Income from operations for our retail segment increased $7.6 million, or 27.9%, to $34.7 million during the three months ended December 31, 2011, compared to $27.1 million for the three months ended January 1, 2011. Income from operations as a percentage of net retail sales for the retail segment decreased approximately 7.5% as a percentage of net retail sales to 17.4% during the three months ended December 31, 2011. The decrease in retail income from operations as a percentage of net sales was due primarily to the equity compensation expense recognized and increases in professional fees incurred during the three months ended December 31, 2011, as discussed above in selling, general and administrative expenses, as well as to the impairment charge recognized during the period. In addition, advertising and promotional expense related to the retail segment increased by approximately $3.7 million during the three months ended December 31, 2011, attributable to promotions for certain of our new retail stores in Japan.
Wholesale
Income from operations for our wholesale segment increased $7.1 million, or 67.1%, to $17.8 million during the three months ended December 31, 2011, compared to $10.6 million for the three months ended January 1, 2011. Income from operations as a percentage of net sales for the wholesale segment increased 0.8% as a percentage of net wholesale sales to 11.5% during the three months ended December 31, 2011. This increase as a percentage of net sales was primarily the result of the increase in gross profit margin, as described in the gross profit discussion above, which offset increases to operating expenses related to the aforementioned equity compensation and professional fees during the three months ended December 31, 2011.
Licensing
Income from operations for our licensing segment increased $5.0 million, or 69.4%, to $12.1 million during the three months ended December 31, 2011, compared to $7.1 million for the three months ended January 1, 2011. Income from operations as a percentage of royalty revenue for the licensing segment increased 9.3% as a percentage of royalty revenue to 61.7% during the three months ended December 31, 2011. This increase was primarily the result of the aforementioned increase in sales of licensed products, while our operating expenses remained relatively fixed as compared to the prior comparable period.
 
7

Interest Expense
Interest expense remained relatively unchanged at $0.5 million for the three months ended December 31, 2011 and the three months ended January 1, 2011.
Foreign Currency Gain
Foreign currency gain during the three months ended December 31, 2011 was $2.2 million as compared to foreign currency gain of $2.4 million during the three months ended January 1, 2011. The decrease in income during the three months ended December 31, 2011 was primarily due to a decrease in the balances on intercompany loans with certain of our European subsidiaries, which are denominated in U.S. dollars.
Provision for Income Taxes
We recognized $27.3 million of income tax expense during the three months ended December 31, 2011, compared with $19.1 million for the three months ended January 1, 2011. Our effective tax rate for the three months ended December 31, 2011 was 41.2%, compared to 40.7% for the three months ended January 1, 2011. The increase in our effective tax rate resulted primarily due to an impairment charge recognized during the three months ended December 31, 2011, which was related to one of our non-U.S. subsidiaries whose losses yield no income tax benefits as it is not expected to be profitable in the near term. This increase in our effective tax rate was offset in part by decreases in statutory income tax rates applicable to certain of our non-U.S. subsidiaries, and in our U.S. blended state income tax rate.
Our effective tax rate may fluctuate from time to time due to the effects of changes in U.S. state and local taxes, tax rates in foreign jurisdictions, and certain other nondeductible expenses (such as fees related to a public offering) and income earned in certain non-U.S. entities with significant net operating loss carryforwards. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods.
Net Income
As a result of the foregoing, our net income increased $11.2 million, or 40.4%, to $39.0 million during the three months ended December 31, 2011, compared to $27.8 million for the three months ended January 1, 2011.
 
8

Comparison of the nine months ended December 31, 2011 with the nine months ended January 1, 2011
The following table details the results of our operations for the nine months ended December 31, 2011 and January 1, 2011 and expresses the relationship of certain line items to total revenue as a percentage (dollars in thousands):

 	  	Nine Months Ended	 	 	 	 	 	 	 	 	% of Total
Revenue
the nine months	 	 	% of Total
Revenue
the nine months	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	 	$ Change	 	 	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
							
Statement of Operations Data:	  				 				 				 				 				 				
Net sales	  	$	874,195	  	 	$	531,264	  	 	$	342,931	  	 	 	64.6	% 	 				 				
Royalty revenue	  	 	48,069	  	 	 	32,072	  	 	 	15,997	  	 	 	49.9	% 	 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total revenue	  	 	922,264	  	 	 	563,336	  	 	 	358,928	  	 	 	63.7	% 	 				 				
Cost of goods sold	  	 	388,290	  	 	 	251,392	  	 	 	136,898	  	 	 	54.5	% 	 	 	42.1	% 	 	 	44.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Gross profit	  	 	533,974	  	 	 	311,944	  	 	 	222,030	  	 	 	71.2	% 	 	 	57.9	% 	 	 	55.4	% 	
Selling, general and administrative expenses	  	 	334,199	  	 	 	196,819	  	 	 	137,380	  	 	 	69.8	% 	 	 	36.2	% 	 	 	34.9	% 	
Depreciation and amortization	  	 	27,642	  	 	 	18,055	  	 	 	9,587	  	 	 	53.1	% 	 	 	3.0	% 	 	 	3.2	% 	
Impairment of long-lived assets	  	 	3,292	  	 	 	2,838	  	 	 	454	  	 	 	16.0	% 	 	 	0.4	% 	 	 	0.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total operating expenses	  	 	365,133	  	 	 	217,712	  	 	 	147,421	  	 	 	67.7	% 	 	 	39.6	% 	 	 	38.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Income from operations	  	 	168,841	  	 	 	94,232	  	 	 	74,609	  	 	 	79.2	% 	 	 	18.3	% 	 	 	16.7	% 	
Interest expense, net	  	 	1,112	  	 	 	1,698	  	 	 	(586	) 	 	 	-34.5	% 	 	 	0.1	% 	 	 	0.3	% 	
Foreign currency gain	  	 	(3,920	) 	 	 	(2,808	) 	 	 	(1,112	) 	 	 	39.6	% 	 	 	-0.4	% 	 	 	-0.5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Income before provision for income taxes	  	 	171,649	  	 	 	95,342	  	 	 	76,307	  	 	 	80.0	% 	 	 	18.6	% 	 	 	16.9	% 	
Provision for income taxes	  	 	67,897	  	 	 	40,209	  	 	 	27,688	  	 	 	68.9	% 	 	 	7.4	% 	 	 	7.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Net income	  	$	103,752	  	 	$	55,133	  	 	$	48,619	  	 	 	88.2	% 	 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				 				
Total Revenue
Total revenue increased $358.9 million, or 63.7%, to $922.3 million for the nine months ended December 31, 2011, compared to $563.3 million for the nine months ended January 1, 2011. The increase was the result of an increase in our comparable and non-comparable retail store sales and wholesale sales, as well as increases in our royalty revenue.
The following table details revenues for our three business segments (dollars in thousands):

 	  	Nine Months Ended	 	  	 	 	  	 	 	 	% of Total
Revenue
the nine months	 	 	% of Total
Revenue
the nine months	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	$ Change	 	  	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
Revenue:	  				  				  				  				 				 				
Net sales: Retail	  	$	454,753	  	  	$	248,706	  	  	$	206,047	  	  	 	82.8	% 	 	 	49.3	% 	 	 	44.1	% 	
  Wholesale	  	 	419,442	  	  	 	282,558	  	  	 	136,884	  	  	 	48.4	% 	 	 	45.5	% 	 	 	50.2	% 	
Licensing	  	 	48,069	  	  	 	32,072	  	  	 	15,997	  	  	 	49.9	% 	 	 	5.2	% 	 	 	5.7	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Total revenue	  	$	922,264	  	  	$	563,336	  	  	$	358,928	  	  	 	63.7	% 	 				 				
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Retail
Net sales from our retail stores increased $206.0 million, or 82.8%, to $454.8 million for the nine months ended December 31, 2011, compared to $248.7 million for the nine months ended January 1, 2011. We operated 231 retail stores, including concessions, as of December 31, 2011, compared to 156 retail stores, including concessions, as of January 1, 2011. During the nine months ended December 31, 2011, our comparable store sales growth increased $99.2 million, or 40.4%, from the nine months ended January 1, 2011. The growth in our comparable store sales was primarily due to an increase in sales of our accessories line and watches during the nine months ended December 31, 2011. In addition, our non-comparable store sales were $106.8 million during the nine months ended December 31, 2011, which was primarily the result of opening 75 new stores since January 1, 2011.
 
9

Wholesale
Net sales to our wholesale customers increased $136.9 million, or 48.4%, to $419.4 million for the nine months ended December 31, 2011, compared to $282.6 million for the nine months ended January 1, 2011. The increase in our wholesale net sales occurred primarily as a result of increased sales of our accessories line during the nine months ended December 31, 2011, as well as our continued efforts to work with our wholesale partners to enhance our presence in their department and specialty stores by converting more doors to shop-in-shops, and working with existing retailers in optimizing our presence in their stores.
Licensing
Royalties earned on our licensing agreements increased $16.0 million, or 49.9%, to $48.1 million for the nine months ended December 31, 2011, compared to $32.1 million for the nine months ended January 1, 2011. The increase in royalties was primarily due to royalties earned on licensing agreements related to sales of watches.
Gross Profit
Gross profit increased $222.0 million, or 71.2%, to $534.0 million during the nine months ended December 31, 2011, compared to $311.9 million for the nine months ended January 1, 2011. Gross profit as a percentage of total revenue increased to 57.9% during the nine months ended December 31, 2011, compared to 55.4% during the nine months ended January 1, 2011. This increase in gross profit margin was primarily due to the growth in our retail net sales relative to our overall total revenue growth during the period, as our retail net sales generate higher gross profit margins relative to those of wholesale, as well as to an increase of approximately 240 basis points in gross profit margin generated from our wholesale segment. The increase in gross profit margin in our wholesale segment resulted largely from a decrease in markdown allowances during the nine months ended December 31, 2011, as compared to the nine months ended January 1, 2011, as well an increase in gross profit margin contribution from European wholesale sales which benefited from the revaluation of foreign currency exchange contracts during the nine months ended December 31, 2011.
Total Operating Expense
Total operating expenses increased $147.4 million, or 67.7%, to $365.1 million during the nine months ended December 31, 2011, compared to $217.7 million for the nine months ended January 1, 2011. Total operating expenses increased to 39.6% as a percentage of total revenue for the nine months ended December 31, 2011, compared to 38.6% for the nine months ended January 1, 2011. The components that comprise total operating expenses are explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $137.4 million, or 69.8%, to $334.2 million during the nine months ended December 31, 2011, compared to $196.8 million for the nine months ended January 1, 2011. The dollar increase was primarily due to increases in our retail occupancy and salary costs of $69.2 million, increases in professional fees related to our IPO of approximately $5.2 million, increases in advertising and promotional costs of $6.4 million and increases in corporate employee-related costs of $49.6 million. The increase in our retail occupancy and payroll costs was due to the opening of an additional 65 retail stores during the nine months ended December 31, 2011. Advertising costs increased primarily due to our expansion into new markets during the nine months ended December 31, 2011, including domestic and international. The increase in our corporate employee-related costs was due primarily to the equity based compensation charge of approximately $20.0 million, as well as a $10.7 million charge related to the redemption of employee share options during our private placement in the second fiscal quarter of Fiscal 2012. The equity based compensation charge represented approximately $10.6 million of expenses related to periods prior to the nine months ended December 31, 2011, and $9.4 million of expenses related to the nine months ending December 31, 2011. Selling, general and administrative expenses as a percentage of total revenue increased to 36.2% during the nine months ended December 31, 2011, compared to 34.9% for the nine months ended January 1, 2011. The increase as a percentage of total revenue was primarily due to equity compensation expense recognized during the nine months ended December 31, 2011.
Depreciation and Amortization
Depreciation and amortization increased $9.6 million, or 53.1%, to $27.6 million during the nine months ended December 31, 2011, compared to $18.1 million for the nine months ended January 1, 2011. Dollar increases in depreciation and amortization were primarily due to the build-out of 65 new retail locations during this fiscal year as compared to 50 locations for the prior fiscal year, new shop-in-shop locations, and investments made in our information systems infrastructure to accommodate our growth. Depreciation and amortization decreased to 3.0% as a percentage of total revenue during the nine months ended December 31, 2011, compared to 3.2% for the nine months ended January 1, 2011.
 
10

Impairment on Long-Lived Assets
We recognized an impairment charge of approximately $3.3 million on fixed assets related to two of our retail locations during the nine months ended December 31, 2011. Impairment charges of $2.8 million for the nine months ended January 1, 2011, represented a write-off of fixed assets related to one of our retail locations.
Income from Operations
As a result of the foregoing, income from operations increased $74.6 million, or 79.2%, to $168.8 million during the nine months ended December 31, 2011, compared to $94.2 million for the nine months ended January 1, 2011. Income from operations as a percentage of total revenue increased to 18.3% during the nine months ended December 31, 2011, compared to 16.7% for the nine months ended January 1, 2011.
The following table details income from operations for our three business segments (dollars in thousands):

 	  	Nine Months Ended	 	  	 	 	  	 	 	 	% of Net Sales/
Revenue for
the nine months	 	 	% of Net Sales/
Revenue for
the nine months	 	
 	  	December 31,
2011	 	  	January 1,
2011	 	  	$ Change	 	  	% Change	 	 	ended December 31,
2011	 	 	ended January 1,
2011	 	
Income from operations:	  				  				  				  				 				 				
Retail	  	$	87,892	  	  	$	46,487	  	  	$	41,405	  	  	 	89.1	% 	 	 	19.3	% 	 	 	18.7	% 	
Wholesale	  	 	50,523	  	  	 	31,855	  	  	 	18,668	  	  	 	58.6	% 	 	 	12.0	% 	 	 	11.3	% 	
Licensing	  	 	30,426	  	  	 	15,890	  	  	 	14,536	  	  	 	91.5	% 	 	 	63.3	% 	 	 	49.5	% 	
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Income from operations	  	$	168,841	  	  	$	94,232	  	  	$	74,609	  	  	 	79.2	% 	 				 				
	  	 	 	 	  	 	 	 	  	 	 	 	  				 				 				
Retail
Income from operations for our retail segment increased $41.4 million, or 89.1%, to $87.9 million during the nine months ended December 31, 2011, compared to $46.5 million for the nine months ended January 1, 2011. Income from operations as a percentage of net retail sales for the retail segment increased approximately 0.6% as a percentage of new retail sales to 19.3% during the nine months ended December 31, 2011. The increase as a percentage of net sales was primarily due to a decrease in operating expenses as a percentage of net retail sales, the cost of which increased at a lesser rate than the rate of increase in net sales during the nine months ended December 31, 2011, the impact of which more than offset the additional expenses incurred during the period relating to equity compensation and professional fees as discussed above in selling, general and administrative expenses, as well as charges related to the impairment of long-lived assets.
Wholesale
Income from operations for our wholesale segment increased $18.7 million, or 58.6%, to $50.5 million during the nine months ended December 31, 2011, compared to $31.9 million for the nine months ended January 1, 2011. Income from operations as a percentage of net wholesale sales for the wholesale segment increased approximately 0.7% as a percentage of net wholesale sales to 12.0%. This increase was primarily the result of the aforementioned increase in gross profit margin as a percentage of net sales which more than offset the increase to operating expenses as a percentage of net wholesale sales during the nine months ended December 31, 2011 compared to the nine months ended January 1, 2011.
Licensing
Income from operations for our licensing segment increased $14.6 million, or 91.5%, to $30.4 million during the nine months ended December 31, 2011, compared to $15.9 million for the nine months ended January 1, 2011. Income from operations as a percentage of royalty revenue for the licensing segment increased approximately 13.8% as a percentage of revenue to 63.3%. This increase is primarily the result of the aforementioned increase in sales of licensed products, while our operating expenses remained relatively fixed during the nine months ended December 31, 2011, as compared to the nine months ended January 1, 2011.
 
11

Interest Expense
Interest expense decreased $0.6 million, or 34.5%, to $1.1 million during the nine months ended December 31, 2011, compared to $1.7 million for the nine months ended January 1, 2011. The decrease in interest expense was primarily due to the decrease in the average balance on our Credit Facility of approximately $3.9 million during the nine months ended December 31, 2011, as well as a decrease in interest rates experienced during the period.
Foreign Currency Gain
Foreign currency gain increased $1.1 million, or 39.6%, to $3.9 million during the nine months ended December 31, 2011, as compared to foreign currency gain of $2.8 million during the nine months ended January 1, 2011. The increase in gain during the nine months ended December 31, 2011 was primarily due to the strengthening of the U.S. dollar relative to the Euro, which impacted the re-measurement of intercompany loans with certain of our European subsidiaries, which are denominated in U.S. dollars. We expect the impact resulting from the re-measurement of these loans to diminish in future periods as certain of these intercompany loans were assumed by subsidiaries whose functional currency is the U.S. dollar, and as such are no longer subject to currency re-measurement.
Provision for Income Taxes
We recognized $67.9 million of income tax expense during the nine months ended December 31, 2011, compared with $40.2 million for the nine months ended January 1, 2011. Our effective tax rate for the nine months ended December 31, 2011 was 39.6%, compared to 42.2% for the nine months ended January 1, 2011. The decrease in our effective tax rate resulted primarily from the following: earnings related to certain of our non-U.S. subsidiaries, which are not expected to be profitable for Fiscal 2012; a decrease in statutory income tax rates applicable to certain of our non-U.S. subsidiaries; and a decrease in our U.S. blended state income tax rate. This decrease was offset in part by the impairment charge recognized during the third fiscal quarter, which yielded no income tax benefits.
Our effective tax rate may fluctuate from time to time due to the effects of changes in U.S. state and local taxes, tax rates in foreign jurisdictions, and certain other nondeductible expenses (such as fees related to a public offering) and income earned in certain non-U.S. entities with significant net operating loss carryforwards. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods.
Net Income
As a result of the foregoing, our net income increased $48.6 million, or 88.2%, to $103.8 million during the nine months ended December 31, 2011, compared to $55.1 million for the nine months ended January 1, 2011.
Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity are the cash flows generated from our operations, along with borrowings available under our Credit Facility and available cash and cash equivalents. Our primary use of this liquidity is to fund our ongoing cash requirements, including working capital requirements, global retail store expansion and renovation, construction and renovation of shop-in-shops, investment in information systems infrastructure and expansion of our distribution and corporate facilities. We believe that the cash generated from our operations, together with borrowings available under our Credit Facility and available cash and cash equivalents, will be sufficient to meet our working capital needs for the next 12 months, including investments made and expenses incurred in connection with our store growth plans, systems development and store improvements. We expect to spend between approximately $95 million and $105 million on capital expenditures during Fiscal 2012, of which we have spent $56.8 million for the nine months ended December 31, 2011. The majority of these expected expenditures relate to new retail store openings planned for the year, with the remainder being used for investments in connection with developing new shop-in-shops, build-out of our new warehouse, corporate offices and enhancing our information systems infrastructure.
 
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The following table sets forth key indicators of our liquidity and capital resources (in thousands):

 	  	As of	 	
 	  	December 31,
2011	 	  	April 2,
2011	 	
Balance Sheet Data:	  				  				
Cash and cash equivalents	  	$	105,668	  	  	$	21,065	  	
Working capital	  	$	231,088	  	  	$	117,673	  	
Total assets	  	$	590,359	  	  	$	399,495	  	
Revolving line of credit	  	$	15,539	  	  	$	12,765	  	

 	  	Nine Months Ended	 	
 	  	December 31,
2011	 	 	January 1,
2011	 	
Cash Flows Provided By (Used In):	  				 				
Operating activities	  	$	117,348	  	 	$	107,927	  	
Investing activities	  	 	(56,798	) 	 	 	(34,771	) 	
Financing activities	  	 	25,086	  	 	 	(39,847	) 	
Effect of exchange rate	  	 	(1,033	) 	 	 	557	  	
	  	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	$	84,603	  	 	$	33,866	  	
	  	 	 	 	 	 	 	 	
Cash Provided by Operating Activities
Cash provided by operating activities increased $4.7 million to $117.3 million during the nine months ended December 31, 2011, as compared to $112.6 million for the nine months ended January 1, 2011. The increase in cash flows from operating activities is primarily due to an increase in our net income, offset, in part, by a decrease in changes to our accounts receivable and an increase in cash outflows on our inventory during the nine months ended December 31, 2011 as compared to the nine months ended January 1, 2011. The decrease in the change to our accounts receivable was largely the result of cash received during the nine months ended January 1, 2011, which was related to sales billed late in our 2010 fiscal year. The increase in cash outflows on our inventory occurred primarily to accommodate the increase to our net sales for the nine months ended December 31, 2011.
Cash Used in Investing Activities
Net cash used in investing activities increased $17.3 million to $56.8 million during the nine months ended December 31, 2011, as compared to $34.8 million during the nine months ended January 1, 2011. The increase in cash used in investing activities is primarily the result of the build-out of our new retail stores, which were constructed during the nine months ended December 31, 2011, and shop-in-shops we installed during the nine months ended December 31, 2011.
Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities was $25.1 million in the nine months ended December 31, 2011, compared to net cash used in financing activities of $39.8 million during the nine months ended January 1, 2011. The $64.9 million increase in cash flows from financing activities was primarily due to the net borrowings on our Credit Facility of $2.8 million during the nine months ended December 31, 2011, as compared to net repayments of $35.3 million during the nine months ended January 1, 2011. In addition, we received net proceeds from the private placement of our convertible preference shares, completed in July 2011, of $9.6 million, as well as $5.4 million from the exercise of employee share options.
Revolving Credit Facility
On September 15, 2011, we completed an amendment to our Credit Facility, which was originally entered into during Fiscal 2007. Pursuant to such amendment, the Credit Facility provides for up to $100.0 million of borrowings, and expires on September 15, 2015. The agreement also provides for loans and letters of credit to our European subsidiaries of up to $35.0 million. All other terms and conditions under the Credit Facility remained consistent with the original agreement. The Credit Facility provides for aggregate credit available equal to the lesser of (i) $100.0 million, or (ii) the sum of specified percentages of eligible receivables and eligible
 
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inventory, as defined, plus $30.0 million. Amounts outstanding under the Credit Facility are collateralized by substantially all of our assets. The Credit Facility contains financial covenants limiting our capital expenditures to $110.0 million for any one fiscal year plus additional amounts as permitted, and a minimum fixed charge coverage ratio of 2.0 to 1.0 (with the ratio being EBITDA plus consolidated rent expense to the sum of fixed charges plus consolidated rent expense), restrict and limit additional indebtedness, and restrict the incurrence of additional liens and cash dividends. As of the nine months ended December 31, 2011, we were in compliance with all of our covenants covered under the agreement.
Borrowings under the Credit Facility accrue interest at the rate per annum announced from time to time by the agent of 1.25% above the prevailing applicable prime rate, or at a per annum rate equal to 2.25% above the prevailing LIBOR rate. The weighted average interest rate for the revolving credit facility was 4.07% during the nine months ended December 31, 2011. The Credit Facility requires an annual facility fee of $0.1 million, and an annual commitment fee of 0.35% on the unused portion of the available credit under the Credit Facility, payable quarterly.
As of the December 31, 2011, the amount outstanding under the Credit Facility was $15.5 million, and the amount available for future borrowings was $46.6 million. The largest amount borrowed during the nine months ended December 31, 2011 was $34.8 million. At December 31, 2011, there were documentary letters of credit outstanding for approximately $24.7  million, and stand-by letters of credit of $11.1 million.
Contractual Obligations and Commercial Commitments
As of December 31, 2011, our lease commitments and contractual obligations were as follows (in thousands):

Fiscal year ending	  	Remainder
of Fiscal
2012	 	  	Fiscal
2013-2014	 	  	Fiscal
2015-2016	 	  	Fiscal
2017 and
Thereafter	 	  	Total	 	
Operating leases	  	$	14,488	  	  	$	116,675	  	  	$	118,128	  	  	 	260,392	  	  	$	509,683	  	
Credit Facility	  	 	—  	  	  	 	—  	  	  	 	15,539	  	  	 	—  	  	  	 	15,539	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	14,488	  	  	$	116,675	  	  	$	133,667	  	  	$	260,392	  	  	$	525,222	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Operating lease obligations represent the minimum lease rental payments under non-cancelable operating leases for our real estate locations globally. In addition to the above amounts, we are typically required to pay real estate taxes, contingent rent based on sales volume and other occupancy costs relating to our leased properties for our retail stores.
Credit Facility represents the balance as of December 31, 2011, which although it has a maturity date of September 15, 2015, is classified as a current liability on our consolidated balance sheets due to its revolving nature. In addition, interest on the Credit Facility is excluded from the above table as the amount due in future periods is unknown based on its revolving nature.
Excluded from the above commitments is $2.3 million of long-term liabilities related to uncertain tax positions, due to the uncertainty of the time and nature of resolution.
The above table also excludes amounts included in current liabilities in our consolidated balance sheet as of December 31, 2011, as these items will be paid within one year, and non-current liabilities that have no cash outflows associated with them (e.g., deferred taxes).
We do not have any long-term purchase obligations that represent firm commitments at December 31, 2011.
Research and Development, Patents and Licenses, etc.
We do not conduct research and development activities.
Off-Balance Sheet Arrangements
We have not created, and are not affiliated with, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. We do not have any off-balance sheet arrangements or relationships with entities that are not consolidated into our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
 
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Recent Accounting Pronouncements
We have considered all new accounting pronouncements and have concluded that there are no new pronouncements that have a material impact on our results of operations, financial condition or cash flows based on current information.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to certain market risks during the normal course of our business, such as risk arising from fluctuations in foreign currency exchange rates, as well as fluctuations in interest rates. In attempts to manage these risks, we employ certain strategies to mitigate the effect of these fluctuations. Currently we enter into foreign currency forward contracts to manage our foreign currency exposure to the fluctuations of certain foreign currencies. The use of these instruments helps to manage our exposure to our foreign purchase commitments and better control our product costs. Other than these purchase commitments, we do not use these foreign exchange contracts for any other purposes. In addition, we do not use derivatives for speculative purposes.
Foreign Currency Exchange Risk
We are exposed to risks on certain purchase commitments to foreign suppliers based on the value of the functional currency relative to the local currency of the supplier on the date of the commitment. As such, we enter into forward currency contracts that generally mature in 18 months or less and are consistent with the related purchase commitments. These contracts are recorded at fair value in our consolidated balance sheets as either an asset or liability. Although these are derivative contracts to hedge cash flow risks, we do not designate these contracts as hedges for accounting purposes. Accordingly, the changes in the fair value of these contracts at the balance sheet date and upon maturity (settlement) are recorded in our cost of sales or operating expenses, in our consolidated statement of operations, as applicable to the transactions for which the forward exchange contracts were established.
We perform a sensitivity analysis to determine the effects of fluctuations in foreign currency exchange rates. For this sensitivity analysis, we assume a hypothetical change in foreign exchange rates against the U.S. dollar. Based on all foreign currency exchange contracts outstanding as of December 31, 2011, a 10% devaluation of the U.S. dollar compared to the level of foreign currency exchange rates for currencies under contract as of December 31, 2011 would result in a decrease of approximately $3.7 million of net unrealized foreign currency loss. Conversely, a 10% appreciation of the U.S. dollar would result in an increase of approximately of $3.9 million of net unrealized gains.
Interest Rate Risk
We are exposed to interest rate risk in relation to our Credit Facility, the balance of which was $15.5 million at December 31, 2011. Our Credit Facility carries interest rates that are tied to LIBOR and the prime rate, and therefore our statements of operations and cash flows are exposed to changes in interest rates. A one percentage point increase in either the prime rate or LIBOR would cause an increase to the interest expense on our Credit Facility of approximately $0.2 million. The balance of our Credit Facility at December 31, 2011 is not indicative of future balances that may be subject to fluctuations in interest rates.
 
15

Exhibit 99.3
BC No. 524407
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT
(NO. 16 OF 2004)
MEMORANDUM AND ARTICLES
OF ASSOCIATION
OF
MICHAEL KORS HOLDINGS LIMITED
Incorporated the 13th day of December, 2002
under the International Business Companies Act
(CAP. 291)
Amended and Restated on the 21th day of December, 2011
INCORPORATED IN THE BRITISH VIRGIN ISLANDS

TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT
(NO. 16 OF 2004)
MEMORANDUM OF ASSOCIATION
OF
MICHAEL KORS HOLDINGS LIMITED

NAME	
		
1.	 	The Name of the Company is Michael Kors Holdings Limited.	
	
REGISTERED OFFICE	
		
2.	 	The registered office of the Company will be located at the offices of Offshore Incorporations Limited, P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.	
	
REGISTERED AGENT	
		
3.	 	The registered agent of the Company will be Offshore Incorporations Limited of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.	
	
GENERAL OBJECTS AND POWERS	
			
4.	 	(a)	 	Subject to the following provisions of this Memorandum, the objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Act or any other Law of the British Virgin Islands.	
			
	 	(b)	 	Without limiting the foregoing, the powers of the Company include the power to do the following:	
				
	 		 	(i)	  	grant options over unissued shares in the Company and treasury shares;	
				
	 		 	(ii)	  	issue securities that are convertible into shares;	
				
	 		 	(iii)	  	give financial assistance to any person in connection with the acquisition of the Company’s own shares;	

 

	 		 	(iv)	  	issue debt obligations of every kind and grant options, warrants and rights to acquire debt obligations;	
				
	 		 	(v)	  	guarantee a liability or obligation of any person and secure any of its obligations by mortgage, pledge or other charge, of any of its assets for that purpose; and	
				
	 		 	(vi)	  	protect the assets of the Company for the benefit of the Company, its creditors and its members and, at the discretion of the directors, for any person having a direct or indirect interest in the Company.	
	
EXCLUSIONS	
			
5.	 	(a)	 	The Company may not:	
				
	 		 	(i)	  	carry on business with persons resident in the British Virgin Islands;	
				
	 		 	(ii)	  	own an interest in real property situate in the British Virgin Islands, other than a lease referred to in paragraph 5(b)(v) of subclause 5(b);	
				
	 		 	(iii)	  	carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;	
				
	 		 	(iv)	  	carry on business as an insurance or re-insurance company, insurance agent or insurance broker, unless it is licensed under an enactment authorising it to carry on that business;	
				
	 		 	(v)	  	carry on business of company management, unless it is licensed under the Company Management Act, 1990; or	
				
	 		 	(vi)	  	carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands.	
			
	 	(b)	 	For purposes of paragraph 5(a)(i) of subclause 5(a), the Company shall not be treated as carrying on business with persons resident in the British Virgin Islands if:	
				
	 		 	(i)	  	it makes or maintains deposits with a person carrying on banking business within the British Virgin Islands;	
				
	 		 	(ii)	  	it makes or maintains professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, administration companies, investment advisers or other similar persons carrying on business within the British Virgin Islands;	
 
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	 		 	(iii)	  	it prepares or maintains books and records within the British Virgin Islands;	
				
	 		 	(iv)	  	it holds, within the British Virgin Islands, meetings of its directors or members;	
				
	 		 	(v)	  	it holds a lease of property for use as an office from which to communicate with members or where books and records of the Company are prepared or maintained;	
				
	 		 	(vi)	  	it holds shares, debt obligations or other securities in a company incorporated under the International Business Companies Act or under the Act; or	
				
	 		 	(vii)	  	shares, debt obligations or other securities in the Company are owned by any person resident in the British Virgin Islands or by any company incorporated under the International Business Companies Act or under the Act.	
	
LIMITATION OF LIABILITY	
		
6.	 	The Company is a company limited by shares. The liability of each member is limited to:	
			
	 	(a)	 	the amount from time to time unpaid on that member’s shares;	
			
	 	(b)	 	any liability expressly provided for in this Memorandum or the Articles; and	
			
	 	(c)	 	any liability to repay a distribution pursuant to section 58(1) of the Act.	
	
CURRENCY	
		
7.	 	Shares in the Company shall be issued in the currency of the United States of America.	
	
AUTHORISED CAPITAL	
		
8.	 	The Company shall have no authorised capital.	
	
CLASSES, NUMBER AND PAR VALUE OF SHARES	
		
9.	 	The Company is authorised to issue a maximum of 650,000,000 shares, comprised of one class of ordinary shares of no par value each (the “ Ordinary Shares ”) in one or more series. In addition, the Board of Directors may, from time to time, create and authorize one or more new class of shares pursuant to clauses 20, 23 and 24 below (any such class, a “ New Class of Shares ” and the shares of any such class, the “ New Shares ”)	
 
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DESIGNATIONS, POWERS, PREFERENCES, ETC. OF ORDINARY SHARES	
		
10.	 	Dividends . Subject to this Memorandum, the Articles and the prior rights of holders of classes of Equity Securities of the Company having prior rights as to dividends, the holders of Ordinary Shares shall be entitled to receive, when and as declared by the Board of Directors, out of any assets of the Company legally available therefor, such dividends as may be declared from time to time by the Board of Directors.	
		
11.	 	Liquidation . Subject to this Memorandum, the Articles and the prior rights of holders of classes of Equity Securities of the Company having prior rights as to a Liquidation Event, upon the occurrence of a Liquidation Event each holder of Ordinary Shares shall be entitled to receive a distribution in respect of its Ordinary Shares from the remaining assets of the Company or the proceeds of such Liquidation Event legally available for distribution, in an amount equal to the aggregate amount of such assets or proceeds available for distribution to all holders of Ordinary Shares, multiplied by the quotient of (i) the number of Ordinary Shares held by such holder as of such time, divided by (ii) the total number of Ordinary Shares issued and outstanding as of such time.	
		
12.	 	Redemption . Subject to this Memorandum and the Articles, Ordinary Shares shall be subject to redemption, purchase or acquisition by the Company for fair value following a resolution of directors only with the consent of the holder thereof, except as specified in the terms of the applicable class or series of shares or as permitted by the Act.	
		
13.	 	Voting Rights .	
			
	 	(a)	  	Each holder of Ordinary Shares shall be entitled to notice of any meeting of members and shall be entitled to vote upon such matters and in such manner as provided in this Memorandum and the Articles.	
			
	 	(b)	  	Any New Class of Shares created and authorized pursuant to clauses 20, 23 and 24 below shall have such voting and other powers as are fixed by the Board of Directors in the resolution of directors establishing such New Class of Shares, which may include, without limitation, the ability to vote together as one class with the holders of Ordinary Shares on all matters submitted to a vote of the members.	
			
	 	(c)	  	Each holder of Ordinary Shares shall be entitled to one (1) vote for each Ordinary Share held as of the applicable date on any matter that is submitted to a vote of the members.	
		
14.	 	Equal Status . Ordinary Shares shall have the same rights and privileges and rank equally, share ratably and be identical in all respects to all matters.	
 
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VARIATION OF RIGHTS	
		
15.	 	The rights attached to any class of shares may be varied, whether or not the Company is being wound up, only by a resolution passed at a meeting by the holders of more than 50 percent of the issued shares of that class of shares and the holders of more than 50 percent of the issued shares of any other class of shares that would be adversely affected by such variation.	
	
RIGHTS NOT VARIED BY THE ISSUANCE OF SHARES PARI PASSU OR SUPERIOR	
		
16.	 	The rights conferred upon the holders of shares of any class shall not, unless otherwise expressly provided by the terms of the shares of that class, be deemed to be varied, and clause 15 above shall not be implicated, by the creation or issuance of any other class of shares ranking pari passu therewith or superior thereto.	
	
REGISTERED SHARES	
		
17.	 	Shares may be issued as registered shares only.	
		
18.	 	Registered shares shall not be exchanged for bearer shares.	
	
TRANSFER OF REGISTERED SHARES	
		
19.	 	Registered shares in the Company may be transferred subject to the provisions relating to the transfer of shares set forth in the Articles.	
	
AMENDMENT OF MEMORANDUM AND ARTICLES	
			
20.	 	(a)	 	Subject to clauses 15, 24 and 26 herein, the Company may amend this Memorandum and the Articles by a resolution of members or by a resolution of directors, save that no amendment may be made by resolution of directors:	
				
	 		 	(i)	  	to restrict the rights or powers of the members to amend this Memorandum or the Articles;	
				
	 		 	(ii)	  	to change the percentage of members required to pass a resolution of members to amend this Memorandum or the Articles;	
				
	 		 	(iii)	  	in circumstances where, pursuant to the Act, this Memorandum or the Articles cannot be amended by the members; or	
				
	 		 	(iv)	  	to clauses 10 through 16 or this clause 20.	
			
	 	(b)	 	Notwithstanding clause 20(a), the Board of Directors may act by itself at any time, subject to any applicable filing requirements of the Registrar, to	
 
6

 

	 		 	remove any provisions and/or definitions from this Memorandum or the Articles that relate to a class or series of shares that has ceased to be outstanding.	
		
21.	 	Notwithstanding any other provisions of this Memorandum or the Articles, the affirmative vote of the holders of at least 75% of the voting power of the shares of the then outstanding voting shares of the Company, voting together as a single class, shall be required to amend, repeal or adopt any provisions inconsistent with the definition of “resolution of members” in the Articles, Regulations 49, 68, 69, 70, 71, 73, 74, 75, 76 and 78 of the Articles and this clause 21.	
		
22.	 	Any amendment to this Memorandum or the Articles will take effect upon the registration by the Registrar of a notice of such amendment following the filing thereof by the registered agent of the Company.	
		
23.	 	Nothing in this Memorandum or the Articles shall preclude the Board of Directors from amending this Memorandum for the purpose of creating New Classes of Shares in accordance with this Memorandum and the Articles, provided that clauses 10 through 14 above are not amended other than as contemplated by clauses 15 and/or 29 herein.	
		
24.	 	One or more New Classes of Shares may be created and authorized from time to time by the Board of Directors by way of a resolution of directors, without obtaining the consent of any member or class of members. For this purpose, additional clauses may be inserted into this Memorandum that shall specify the voting and other powers (if any) attaching to any New Class of Shares, and the preferences and any relative, participating, optional or other special rights and any qualifications, limitations or restrictions thereof. Except as otherwise provided in this Memorandum or the Articles, New Shares may be issued from time to time at such prices and on such terms as the Board of Directors deems advisable. The holders of Ordinary Shares shall have voting rights with respect to their Ordinary Shares as provided in this Memorandum and the Articles and shall have the rights with respect to distributions from the Company as are set forth herein. The number of Ordinary Shares of each member as of any given time shall be set forth in the Company’s register of members, as it may be updated from time to time in accordance with this Memorandum and the Articles. Subject to the provisions of this Memorandum and the Articles, upon the issuance of New Shares to any person, the Board of Directors may, by resolution of directors, admit such person as a member (an “ Additional Member ”), and such Additional Member shall be treated as a member for all purposes under this Memorandum, the Articles and any applicable Law. The number of New Shares of each Additional Member, as of any given time, shall be set forth in the Company’s register of members.	
 
7

					
25.	 	The authority of the Board of Directors with respect to the establishment of the powers, preferences and relative, participating, optional and other special rights of any New Class of Shares, and the qualifications, limitations or restrictions thereof, shall include, but not be limited to, the determination or fixing of the following:	
			
	 	(a)	  	the dividend rate of such New Class of Shares, the conditions and dates upon which such dividends will be payable, the relation that such dividends will bear to the dividends payable on any other class of shares and whether such dividends shall be cumulative or non-cumulative;	
			
	 	(b)	  	whether the New Shares will be subject to redemption for cash, property or rights, including securities of the Company or of any other corporation, by the Company at the option of either the Company or the holder or both or upon the happening of a specified event, and, if made subject to any such redemption, the times or events, prices and other terms and conditions of such redemption;	
			
	 	(c)	  	the terms and amount of any sinking fund provided for the purchase or redemption of the shares of such class;	
			
	 	(d)	  	whether or not the New Shares will be convertible into, or exchangeable for, at the option of either the holder or the Company or upon the happening of a specified event, shares of any other class of shares, and, if provision be made for conversion or exchange, the times or events, prices, rates, adjustments and other terms and conditions of such conversions or exchanges;	
			
	 	(e)	  	the restrictions, if any, on the issue or reissue of any New Shares;	
			
	 	(f)	  	the provisions as to voting (which may be one or more votes per share or a fraction of a vote per share) and the number of votes of the New Shares relative to the Ordinary Shares and any other class of shares), optional and/or other special rights and preferences, if any, and whether the New Shares shall vote separately from other classes of shares; and	
			
	 	(g)	  	the rights of the holders of the New Shares upon the voluntary or involuntary liquidation, dissolution or winding up of the Company.	
		
26.	 	The Company may, by resolution of directors, pursuant to clause 24 above, make such modifications to this Memorandum and the Articles as are necessary to admit Additional Members following the creation, authorization and issuance of a New Class of Shares pursuant to clause 24 above. The Company shall notify all members after any such amendment has taken effect.	
		
27.	 	Except as may otherwise be provided from time to time in this Memorandum or by applicable Law, no holder of any New Shares, as such, shall be entitled to any voting powers in respect thereof.	
		
28.	 	If any class of the Company’s shares shall be entitled to more or less than one vote for any share on any matter, every reference in this Memorandum and in any relevant provision of Law to a majority or other proportion of shares shall refer to such majority or other proportion of the votes attached to such class of shares or if such class of shares votes together with another class of shares, the majority or other proportion of the votes attached to such classes of shares.	
 
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29.	 	For the avoidance of doubt, if there exists more than one class of shares of the Company, then the approval contemplated by clause 15 above shall be required in order to amend the wording of clauses 10 through 14 above and of any additional clauses that may be inserted into this Memorandum specifying the voting and other powers (if any) attaching to any New Class of Shares, and the preferences and any relative, participating, optional or other special rights and any qualifications, limitations or restrictions thereof.	
	
DEFINITIONS	
		
30.	 	Words used in this Memorandum and not defined herein shall have the respective meanings ascribed to them in the Articles.	
[remainder of page left intentionally blank]
 
9

We, Offshore Incorporations Limited, of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands for the purpose of incorporating an International Business Company under the Laws of the British Virgin Islands hereby subscribe our name to this Memorandum of Association the 1st day of July, 2002.

	 	SUBSCRIBER	  	Offshore Incorporations Limited	
			
	 		  	(Sd.)    E.T. POWELL	
	 		  	Authorised Signatory	
			
	 	in the presence of: WITNESS	  		
	 		  	(Sd.)    Fandy Tsoi	
	 		  	9/F Ruttonjee House	
	 		  	11 Duddell Street, Central	
	 		  	Hong Kong	
	 		  	Production Supervisor	

TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT
(NO. 16 OF 2004)
ARTICLES OF ASSOCIATION
OF
MICHAEL KORS HOLDINGS LIMITED

	  	PRELIMINARY	  		
		
31.	  	In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear the meanings set opposite them respectively in the second column thereof. Words used in these Articles and not otherwise defined shall have the meanings ascribed to them in the Memorandum.	
			
	  	Words	  	Meaning	
			
	  	Act	  	The BVI Business Companies Act, 2004 (as amended).	
			
	  	Articles	  	The Articles of Association of the Company as originally framed or as from time to time amended.	
			
	  	Board of Directors	  	The Board of Directors of the Company.	
			
	  	Business Day	  	Any day, except a Saturday, Sunday or day on which banking institutions are legally authorized to close in New York City or in the British Virgin Islands.	
 
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	 	Derivative	  	An agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions and borrowed or loaned shares), the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the person or persons entering into such Derivative with respect to shares of the Company.	
			
	 	Distribution	  	In relation to a distribution by the Company to a member, the direct or indirect transfer of an asset, other than shares, to or for the benefit of the member, or the incurring of a debt to or for the benefit of a member, in relation to shares held by such member, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes a dividend.	
			
	 	Equity Securities	  	With respect to any entity, all forms of equity securities in such entity or any successor of such entity (however designated, whether voting or non-voting), all securities convertible into or exchangeable or exercisable for such equity securities, and all warrants, options or other rights to purchase or acquire from such entity or any successor of such entity, such equity securities, or securities convertible into or exchangeable or exercisable for such equity securities, including, with respect to the Company, the Ordinary Shares and any Share Equivalents (including any New Class of Shares).	
 
12

 

	 	Exchange Act	  	The United States Securities Exchange Act of 1934, as amended from time to time.	
			
	 	Governmental Authority	  	Any federal, national, state, foreign, provincial, local or other government or any governmental, regulatory, administrative or self-regulatory authority, agency, bureau, board, commission, court, judicial or arbitral body, department, political subdivision, tribunal or other instrumentality thereof.	
			
	 	Law	  	Any statute or law (including common law), constitution, code, ordinance, rule, treaty or regulation and any Order.	
			
	 	member	  	A person who holds shares in the Company and whose name is entered in the Company’s register of members as the registered holder of such shares.	
			
	 	Member Associated Person	  	With respect to any member, (i) any other beneficial owner of shares of the Company that are owned by such member and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the member or such beneficial owner.	
			
	 	Member Business	  	Any business brought before a meeting of members in accordance with Regulation 69(b)(ii).	
			
	 	Member Information	  	The information required by Regulation 69(d)(i)-69(d)(iii).	
 
13

 

			
	 	Member Nominee	  	A person nominated for election as a director in accordance with
Regulation 69(b)(ii).	
			
	 	Memorandum	  	The Memorandum of Association of the Company as originally framed or as from time to time amended.	
			
	 	New Share Directors	  	Directors elected by the holders of any New Class of Shares.	
			
	 	Nominating Member	  	A member nominating persons for election as a director.	
			
	 	Notice of Business	  	Written notice given by or on behalf of a member of record of the Company and setting forth the information required by Regulation 69(d).	
			
	 	Notice of Nomination	  	Written notice given by or on behalf of a member of record of the Company setting forth the information required by Regulation 70(f).	
			
	 	Order	  	Any award, injunction, judgment, decree, order, ruling, subpoena, assessment, writ or verdict or other decision issued, promulgated or entered by or with any Governmental Authority of competent jurisdiction.	
			
	 	person	  	An association, a corporation, an individual, a partnership, a limited liability company, a trust or any other entity or organization, including a Governmental Authority.	
			
	 	Proponent	  	A member proposing Member Business.	
			
	 	Public Disclosure	  	Means disclosure by a press release reported by the Dow Jones News Services, Associated Press or comparable U.S. national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.	
 
14

 

	 	Registrar	  	Registrar of Corporate Affairs appointed under section 229 of the Act.	
			
	 	resolution of directors	  	(a) A resolution approved at a duly convened and constituted meeting of directors of the Company or of a committee of directors of the Company by the affirmative vote of a simple majority of the directors present at the meeting who voted and did not abstain; or	
			
	 		  	(b) a resolution consented to in writing by a simple majority of the directors or a simple majority of the members of the committee, as the case may be;	
			
	 		  	except that where a director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority.	
			
	 	resolution of members	  	A resolution approved at a duly convened and constituted meeting of the members of the Company by the affirmative vote of:	
			
	 		  	(i) a simple majority of the votes of the shares entitled to vote thereon, voting together as a class, that were present at the meeting and were voted and not abstained, or	
			
	 		  	(ii) a simple majority of the votes of each class or series of shares that were present at the meeting and entitled to vote thereon as a class or	
 
15

 

	 		  	series and were voted and not abstained and of a simple majority of the votes of the remaining shares entitled to vote thereon that were present at the meeting and were voted and not abstained.	
			
	 		  	No action may be taken by members by written consent, unless the action to be effected by written consent of the members and the taking of such action by such written consent have expressly been approved in advance by the Board of Directors.	
			
	 	Secretary	  	The Secretary of the Company.	
			
	 	securities	  	Shares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debt obligations.	
			
	 	Securities Act	  	The United States Securities Act of 1933, as amended from time to time.	
			
	 	Share Equivalents	  	Any securities convertible into or exchangeable or exercisable for Ordinary Shares, and any warrants, options or other rights to purchase or acquire Ordinary Shares or securities convertible into or exchangeable or exercisable for Ordinary Shares.	
			
	 	shares	  	Collectively, Equity Securities of the Company, including the Ordinary Shares and any New Class of Shares.	
			
	 	subsidiary	  	With respect to any specified person, (a) any corporation or company more than 50% of whose voting or capital stock is, as of the time in question, directly or indirectly owned by such person and (b) any partnership, joint venture, association, or other entity in which such person, directly or indirectly, owns more than 50% of the equity or economic interest thereof or has the power to elect or direct the election of more than 50% of the members of the governing body of such entity.	
 
16

 

			
	 	the Seal	  	Any Seal which has been duly adopted as the Seal of the Company.	
			
	 	treasury shares	  	Shares in the Company that were previously issued but were repurchased, redeemed or otherwise acquired by the Company and not cancelled.	
			
	 	Voting Commitment	  	With respect to any person, an agreement, arrangement, understanding, commitment or assurance as to how such person will act or vote as a director of the Company on any issue or question.	

32.	 	“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced by any mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.	
		
33.	 	Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.	
		
34.	 	Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits, include the others and a reference to “Regulation” is a reference to a regulation of the Articles and a reference to “Clause” is a reference to a clause of the Memorandum.	
		
35.	 	A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is the votes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meeting shall be given a corresponding construction.	
		
36.	 	A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according to the provisions of the Memorandum.	
 
17

 

37.	 	A reference to a provision of Law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation.	
		
38.	 	A reference to an agreement is a reference to that agreement as amended.	
		
	 	REGISTERED SHARES	
		
39.	 	Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company, or any other person authorized by resolution of directors, or under the Seal specifying the share or shares held by him and the signature of the director, officer or authorized person and the Seal may be facsimiles; provided that the shares in the Company may be represented by uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such shares, or a combination of both certificated and uncertificated shares.	
		
40.	 	Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its Board of Directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by a resolution of directors.	
		
41.	 	If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any dividend payable in respect of such shares.	
		
	 	SHARES	
		
42.	 	Subject to the provisions of these Articles, the Memorandum and any resolution of members, the unissued shares of the Company shall be at the disposal of the Board of Directors who may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolution of directors determine.	
		
43.	 	No share in the Company may be issued until the consideration in respect thereof is fully paid, and when issued the share is for all purposes fully paid and non-assessable save that a share issued for a promissory note or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.	
		
44.	 	Shares in the Company shall be issued for money, services rendered, personal property, an estate in real property, a promissory note or other binding obligation to contribute money or property or any combination of the foregoing as shall be determined by a resolution of directors.	
 
18

 

45.	 	Shares in the Company may be issued for such amount of consideration as the Board of Directors may from time to time by resolution of directors determine, except that in the case of shares with par value, the amount shall not be less than the par value, and in the absence of fraud the decision of the Board of Directors as to the value of the consideration received by the Company in respect of the issue is conclusive unless a question of Law is involved.	
		
46.	 	A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company shall be treated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respect of the other share, debt obligation or security.	
		
47.	 	Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company may by resolution of directors determine.	
		
48.	 	The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares. Notwithstanding the foregoing, in the event that the Company undertakes a division (but not a combination) of Ordinary Shares that results in a member who holds Ordinary Shares being entitled to receive a fraction of an Ordinary Share, then the Company shall compulsorily redeem and cancel any such fraction of an Ordinary Share and pay to such member in cash in U.S. dollars an amount (computed to the nearest U.S. cent) equal to the fraction multiplied by the fair market value per Ordinary Share as determined by the Board of Directors in good faith.	
		
49.	 	The Company may purchase, redeem or otherwise acquire and hold its own shares.	
		
50.	 	Subject to provisions to the contrary in the Memorandum or these Articles, the Company may not purchase, redeem or otherwise acquire its own shares without the consent of members whose shares are to be purchased, redeemed or otherwise acquired.	
		
51.	 	No purchase, redemption or other acquisition of shares shall be made unless the resolution of directors relating to such purchase, redemption or other acquisition contains a statement that the directors are satisfied, on reasonable grounds, that immediately after the purchase, redemption or other acquisition the Company will be able to pay its debts as they fall due and the value of the assets of the Company will exceed its liabilities, and in the absence of fraud the decision of the Board of Directors as to the value of the assets of the Company is conclusive, unless a question of Law is involved.	
 
19

 

52.	 	A determination by the Board of Directors under the preceding Regulation is not required when shares are purchased, redeemed or otherwise acquired:	
			
	 	(a)	  	pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for money or other property of the Company;	
			
	 	(b)	  	by virtue of the provisions of the Act; or	
			
	 	(c)	  	pursuant to an order of the Court.	
		
53.	 	Shares that the Company purchases, redeems or otherwise acquires pursuant to the preceding Regulation may be cancelled or held as treasury shares except to the extent that such shares are in excess of 50 percent of the issued shares of the Company, in which case they shall be cancelled but they shall be available for reissue.	
		
54.	 	Where shares in the Company are held by the Company as treasury shares or are held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the votes in the election of directors of the other company, such shares of the Company are not entitled to vote or to have dividends paid thereon.	
		
55.	 	The Company may purchase, redeem or otherwise acquire its shares at a price lower than the fair value if permitted by, and then only in accordance with, the terms of:	
			
	 	(a)	  	the Memorandum or these Articles; or	
			
	 	(b)	  	a written agreement for the subscription for the shares to be purchased, redeemed or otherwise acquired.	
		
	 	MORTGAGES AND CHARGES OF REGISTERED SHARES	
		
56.	 	Members may mortgage or charge their registered shares in the Company and upon satisfactory evidence thereof the Company shall give effect to the terms of any valid mortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.	
		
57.	 	In the case of the mortgage or charge of registered shares there may be entered in the register of members of the Company at the request of the registered holder of such shares:	
			
	 	(a)	  	a statement that the shares held by him are mortgaged or charged;	
			
	 	(b)	  	the name of the mortgagee or chargee; and	
			
	 	(c)	  	the date on which the aforesaid particulars are entered in the register of members.	
 
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58.	 	Where particulars of a mortgage or charge are registered, such particulars shall be cancelled:	
			
	 	(a)	  	with the consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or	
			
	 	(b)	  	upon evidence satisfactory to the Board of Directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the Board of Directors shall consider necessary or desirable.	
		
59.	 	Whilst particulars of a mortgage or charge are registered, no transfer of any share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf.	
		
	 	F ORFEITURE	
		
60.	 	When shares issued for a promissory note or other written obligation for payment of a debt have been issued subject to forfeiture, the provisions set forth in the following four regulations shall apply.	
		
61.	 	Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member who defaults in making payment pursuant to a promissory note or other written obligations to pay a debt.	
		
62.	 	The written notice specifying a date for payment shall:	
			
	 	(a)	  	name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by the notice is to be made; and	
			
	 	(b)	  	contain a statement that in the event of non-payment at or before the time named in the notice the shares, or any of them, in respect of which payment is not made will be liable to be forfeited.	
		
63.	 	Where a written notice has been issued and the requirements have not been complied with within the prescribed time, the Board of Directors may at any time before tender of payment forfeit and cancel the shares to which the notice relates.	
		
64.	 	The Company is under no obligation to refund any monies to the member whose shares have been forfeited and cancelled pursuant to these provisions. Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeited and cancelled.	
 
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	 	LIEN	
		
65.	 	The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money or property or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in the name of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether the time for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such member or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all dividends payable thereon. The Board of Directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Regulation.	
		
66.	 	In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company may sell, in such manner as the Board of Directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of twenty one days after a notice in writing, stating and demanding payment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share.	
		
67.	 	The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissory note or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same is presently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the holder of the share immediately before such sale. For giving effect to any such sale the Board of Directors may authorise some person to transfer the share sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.	
		
	 	TRANSFER OF SHARES	
		
68.	 	Subject to any limitations in these Articles and the Memorandum, registered shares in the Company may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, but in the absence of such written instrument of transfer the Board of Directors may accept such evidence of a transfer of shares as they consider appropriate.	
 
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69.	 	The Company shall not be required to treat a transferee of a registered share in the Company as a member until the transferee’s name has been entered in the register of members.	
		
70.	 	Subject to any limitations in these Articles and the Memorandum, the Company must on the application of the transferor or transferee of a registered share in the Company enter in the register of members the name of the transferee of the share, save that the registration of transfers may be suspended and the register of members closed at such times and for such periods as the Company may from time to time by resolution of directors determine, provided that such registration shall not be suspended nor the register of members closed for more than 60 days in any period of 12 months.	
		
	 	TRANSMISSION OF SHARES	
		
71.	 	The executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt member shall be the only person recognised by the Company as having any title to his share, but they shall not be entitled to exercise any rights as a member of the Company until they have proceeded as set forth in the next following three regulations.	
		
72.	 	The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member may be accepted by the Company even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant of probate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which had competent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the Board of Directors may obtain appropriate legal advice. The Board of Directors may also require an indemnity to be given by the executor, administrator, guardian or trustee in bankruptcy.	
		
73.	 	Any person becoming entitled by operation of Law or otherwise to a share or shares in consequence of the death, incompetence or bankruptcy of any member may be registered as a member upon such evidence being produced as may reasonably be required by the Board of Directors. An application by any such person to be registered as a member shall for all purposes be deemed to be a transfer of shares of the deceased, incompetent or bankrupt member and the Board of Directors shall treat it as such.	
		
74.	 	Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of being registered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shall likewise be treated as if it were a transfer.	
 
23

 

75.	 	What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and the circumstances of the case.	
		
	 	REDUCTION OR INCREASE IN MAXIMUM AUTHORISED NUMBER OF SHARES	
		
76.	 	Subject to any limitations in these Articles or the Memorandum, the Company may by a resolution of directors amend the Memorandum to increase or reduce its maximum authorised number of shares, and in connection therewith the Company may in respect of any unissued shares increase or reduce the number of such shares, increase or reduce the par value of any such shares or effect any combination of the foregoing.	
		
77.	 	The Company may by resolution of directors amend the Memorandum to:	
			
	 	(a)	  	divide the shares, including issued shares, of a class or series into a larger number of shares of the same class or series; or	
			
	 	(b)	  	combine the shares, including issued shares, of a class or series into a smaller number of shares of the same class or series,	
		
	 	provided, however, that where shares are divided or combined under (a) or (b) of this Regulation, the aggregate par value, if any, of the new shares must be equal to the aggregate par value, if any, of the original shares.	
		
	 	MEETINGS AND CONSENTS OF MEMBERS	
		
78.	 	The Board of Directors may convene meetings of the members of the Company at such times and in such manner and places within or outside the British Virgin Islands as the Board of Directors considers necessary or desirable; provided that at least one meeting of members must be held each year.	
		
79.	 	Upon the written request of members entitled to exercise 30 percent or more of the voting rights in respect of a matter for which a meeting is requested, the Board of Directors shall convene a meeting of members. Any such request shall state the proposed purpose of the meeting.	
		
80.	 	The Board of Directors shall give not less than seven days notice of meetings of members to those persons whose names on the date the notice is given appear as members in the register of members of the Company and are entitled to vote at the meeting.	
		
81.	 	The Board of Directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at the meeting.	
 
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82.	 	A meeting of members may be called on short notice:	
			
	 	(a)	  	if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90 percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a 90 percent majority of the remaining votes, have agreed to short notice of the meeting, or	
			
	 	(b)	  	if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting, and for this purpose presence at the meeting shall be deemed to constitute waiver.	
		
83.	 	The inadvertent failure of the Board of Directors to give notice of a meeting to a member, or the fact that a member has not received a notice that has been properly given, shall not invalidate the meeting.	
		
84.	 	A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.	
		
85.	 	The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote.	
		
86.	 	An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properly evidencing the wishes of the member appointing the proxy:	

(Name of Company)	
		
	 	I/We                    being a member of the above Company with    shares HEREBY APPOINT                    of                     or failing him                    of                    to be my/our proxy to vote for me/us at the meeting of members to be held on the    day of                and at any adjournment thereof.	
		
	 	(Any restrictions on voting to be inserted here.)	
			
	 	Signed this    day of                	 		

	 	Member	 		

	 	A proxy need not be a member, and a member may appoint one or more than one person to act as his proxy. On a poll, votes may be given in person or by proxy, and a member entitled to more than one vote need not, if he votes, use all of his votes or cast all the votes he uses in the same way. The appointment of a proxy does not prevent a member from attending and voting in person at the meeting or	
 
25

					
	 	an adjournment or on a poll. The appointment of a proxy is (unless the contrary is stated in such proxy) valid for an adjournment of the meeting as well as for the meeting or meetings to which it relates and is valid for 12 months following the date of execution unless terminated earlier.	
		
87.	 	The following shall apply in respect of joint ownership of shares:	
			
	 	(a)	  	if two or more persons hold shares jointly, each of them may be present in person or by proxy at a meeting of members and may speak as a member;	
			
	 	(b)	  	if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and	
			
	 	(c)	  	if two or more of the joint owners are present in person or by proxy they must vote as one.	
		
88.	 	A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating in the meeting are able to hear each other.	
		
89.	 	A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of the votes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If such a quorum be present, notwithstanding the fact that such quorum may be represented by only one person, then such person may resolve any matter, and a certificate signed by such person, accompanied where such person is a proxy by a copy of the proxy form, shall constitute a valid resolution of members.	
		
90.	 	If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the request of members, shall be dissolved; in any other case, it shall be adjourned to the next Business Day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other date, time and place as the Board of Directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitled to vote on the matters to be considered by the meeting, those present shall constitute a quorum, but otherwise the meeting shall be dissolved. Notice of the adjourned meeting need not be given if the date, time and place of such meeting are announced at the meeting at which the adjournment is taken.	
		
91.	 	At every meeting of members, the Chairman of the Board of Directors shall preside as Chairman of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose someone of their number to be the Chairman. If the members are unable to choose a Chairman for any reason, then	
 
26

			
	 	the person representing the greatest number of voting shares present in person or by prescribed form of proxy at the meeting shall preside as Chairman, failing which the oldest individual member or representative of a member present shall take the chair.	
		
92.	 	The Chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.	
		
93.	 	At any meeting of the members, the Chairman shall be responsible for deciding in such manner as he shall consider appropriate, whether any resolution has been carried or not, and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the Chairman shall have any doubt as to the outcome of any resolution put to the vote, he or she shall cause a poll to be taken of all votes cast upon such resolution, but if the Chairman shall fail to take a poll then any member present in person or by proxy who disputes the announcement by the Chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the Chairman shall thereupon cause a poll to be taken. If a poll is taken at any meeting the result thereof shall be duly recorded in the minutes of that meeting by the Chairman.	
		
94.	 	Any person other than an individual shall be regarded as one member and, subject to the specific provisions hereinafter contained for the appointment of representatives of such persons, the right of any individual to speak for or represent such member shall be determined by the Law of the jurisdiction where, and by the documents by which, the person is constituted or derives its existence. In case of doubt, the Board of Directors may in good faith seek legal advice from any qualified person, and unless and until a court of competent jurisdiction shall otherwise rule, the Board of Directors may rely and act upon such advice without incurring any liability to any member.	
		
95.	 	Any person other than an individual which is a member of the Company may by resolution of its Board of Directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorised shall be entitled to exercise the same power on behalf of the person which he represents as that person could exercise if it were an individual member of the Company.	
		
96.	 	The Chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy of such proxy or authority which shall be produced within seven days of being so requested or the votes cast by such proxy or on behalf of such person shall be disregarded.	
 
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97.	 	Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class or series of shares in the Company.	
		
98.	 	Except as otherwise provided for or fixed pursuant to the rights of holders of any New Class of Shares with respect to resolutions of members holding New Shares, a resolution of members is valid only if approved at a duly convened and constituted meeting of members by the affirmative vote of a simple majority of the votes of the shares entitled to vote thereon, voting together as one class, that were present at the meeting and were voted and not abstained, and no action may be taken by members except at a duly convened and constituted meeting of members, and no action may be taken by members by written consent, unless the action to be effected by written consent of the members and the taking of such action by such written consent have expressly been approved in advance by the Board of Directors.	
			
99.	 	(a)	  	A meeting of members for the election of directors and other business shall be held annually at such date and time as may be designated by the Board of Directors from time to time.	
			
	 	(b)	  	At an annual meeting of members, only business (other than business relating to the nomination or election of directors, which is governed by Regulation 70) that has been properly brought before the meeting of members in accordance with the procedures set forth in this Regulation 69 shall be conducted. To be properly brought before a meeting of members, such business must be brought before the meeting (i) by or at the direction of the Board of Directors or any committee thereof or (ii) by a member who (a) was a member of record of the Company when the notice required by this Regulation 69 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote at the meeting and (c) complies with the notice and other provisions of this Regulation 69. Subject to Regulation 69(i), and except with respect to nominations or elections of directors, which are governed by Regulation 70, Regulation 69(b)(ii) is the exclusive means by which a member may bring business before a meeting of members.	
			
	 	(c)	  	Subject to Regulation 69(i), at any annual meeting of members, all proposals of Member Business must be made by timely Notice of Business and must otherwise be a proper matter for member action. To be timely, the Notice of Business must be delivered personally or mailed to, and received at the principal executive office of the Company, addressed to the Secretary, by no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of members; provided, however, that if (i) the annual meeting of members is advanced by more than 30 days, or delayed by more than 70 days, from the first anniversary of the prior year’s annual meeting of members, (ii) no annual meeting was held during the prior year or (iii) in the case of the	
 
28

							
	 		 	Company’s first annual meeting of members as a company with a class of equity securities registered under the Exchange Act, the notice by the member to be timely must be received (a) no earlier than 120 days before such annual meeting and (b) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure. In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of a meeting of members commence a new time period (or extend any time period) for the giving of the Notice of Business.	
			
	 	(d)	 	A Notice of Business must set forth:	
				
	 		 	(i)	  	the name and record address of the Proponent, as they appear on the Company’s books;	
				
	 		 	(ii)	  	the name and address of any Member Associated Person;	
				
	 		 	(iii)	  	as to each Proponent and any Member Associated Person, (a) the class or series and number of shares directly or indirectly held of record and beneficially by the Proponent or Member Associated Person, (b) the date such shares were acquired, (c) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such Member Business between or among the Proponent, any Member Associated Person or any others (including their names) acting in concert with any of the foregoing, (d) a description of any Derivative that has been entered into, directly or indirectly, as of the date of the Proponent’s notice by, or on behalf of, the Proponent or any Member Associated Person, (e) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the Proponent or Member Associated Person has a right to vote any shares of the Company, (f) any rights to dividends on the shares of the Company owned beneficially by the Proponent or Member Associated Person that are separated or separable from the underlying shares of the Company, (g) any proportionate interest in shares of the Company or Derivatives held, directly or indirectly, by a general or limited partnership in which the Proponent or Member Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (h) any performance-related fees (other than an asset-based fee) to which the Proponent or Member Associated Person is entitled based on any increase or decrease in the value of shares of the Company or Derivatives thereof, if any, as of the date of such notice;	
 
29

							
	 		 	(iv)	  	a representation that each Proponent is a holder of record of shares of the Company entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such Member Business;	
				
	 		 	(v)	  	a brief description of the Member Business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the Memorandum or these Articles, the language of the proposed amendment) and the reasons for conducting such Member Business at the meeting;	
				
	 		 	(vi)	  	any material interest of each Proponent and any Member Associated Person in such Member Business;	
				
	 		 	(vii)	  	a representation as to whether the Proponent intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s outstanding shares required to approve or adopt such Member Business or (b) otherwise to solicit proxies from members in support of such Member Business;	
				
	 		 	(viii)	  	all other information that would be required to be filed with the Securities and Exchange Commission if the Proponent or Member Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and	
				
	 		 	(ix)	  	a representation that the Proponent shall provide any other information reasonably requested by the Company.	
			
	 	(e)	 	The Proponent shall also provide any other information reasonably requested by the Company within ten Business Days after such request.	
			
	 	(f)	 	In addition, the Proponent shall further update and supplement the information provided to the Company in the Notice of Business or upon the Company’s request pursuant to Regulation 69(e), as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of ten Business Days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the principal executive office of the Company, addressed to the Secretary, by no later than five Business Days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven Business Days before the date for the meeting (in the case of the update and supplement required to be made as of ten Business Days before the meeting or any adjournment or postponement thereof).	
 
30

							
			
	 	(g)	 	The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that business was not properly brought before the meeting in accordance with the procedures set forth in this Regulation 69, and, if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.	
			
	 	(h)	 	If the Proponent (or a qualified representative of the Proponent) does not appear at the meeting of members to present the Member Business, such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Regulation 69, to be considered a qualified representative of the Proponent, a person must be a duly authorised officer, manager or partner of such Proponent or must be authorised by a writing executed by such Proponent or an electronic transmission delivered by such Proponent to act for such Proponent as proxy at the meeting of members, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of members.	
			
	 	(i)	 	The notice requirements of this Regulation 69 shall be deemed satisfied with respect to member proposals that have been properly brought under Rule 14a-8 of the Exchange Act and that are included in a proxy statement that has been prepared by the Company to solicit proxies for such annual meeting. Further, nothing in this Regulation 69 shall be deemed to affect any rights of the holders of any New Class of Shares pursuant to any applicable provision of the Memorandum or these Articles.	
			
100.	 	(a)	 	Subject to Regulation 70(k), only persons who are nominated in accordance with the procedures set forth in this Regulation 70 are eligible for election as Directors.	
			
	 	(b)	 	Nominations of persons for election to the Board of Directors may only be made at a meeting properly called for the election of directors and only (i) by or at the direction of the Board of Directors or any committee thereof or (ii) by a member who (a) was a member of record of the Company when the notice required by this Regulation 70 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote for the election of directors at the meeting and (c) complies with the notice and other provisions of this Regulation 70. Subject to Regulation 70(k), Regulation 70(b)(ii) is the exclusive means by which a member may nominate a person for election to the Board of Directors.	
 
31

 

	 	(c)	 	Subject to Regulation 70(k), all nominations of Member Nominees must be made by timely Notice of Nomination. To be timely, the Notice of Nomination must be delivered personally or mailed to and received at the principal executive office of the Company, addressed to the attention of the Secretary, by the following dates:	
				
	 		 	(i)	  	in the case of the nomination of a Member Nominee for election as a director at an annual meeting of members, no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of members; provided, however, that if (a) the annual meeting of members is advanced by more than 30 days, or delayed by more than 70 days, from the first anniversary of the prior year’s annual meeting of members, (b) no annual meeting was held during the prior year or (c) in the case of the Company’s first annual meeting of members as a company with a class of equity securities registered under the Exchange Act, the notice by the member to be timely must be received (1) no earlier than 120 days before such annual meeting and (2) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure; and	
				
	 		 	(ii)	  	in the case of the nomination of a Member Nominee for election as a director at a special meeting of members, no earlier than 120 days before and no later than the later of 90 days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or Public Disclosure.	
			
	 	(d)	 	Notwithstanding anything herein to the contrary, if the number of directors to be elected to the Board of Directors at a meeting of members is increased and there is no Public Disclosure by the Company naming the nominees for the additional directorships at least 100 days before the first anniversary of the preceding year’s annual meeting, a Notice of Nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered personally and received at the principal executive office of the Company, addressed to the attention of the Secretary, no later than the close of business on the tenth day following the day on which such Public Disclosure is first made by the Company.	
			
	 	(e)	 	In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of an annual or special meeting commence a new time period (or extend any time period) for the giving of the Notice of Nomination.	
			
	 	(f)	 	The Notice of Nomination shall set forth:	
				
	 		 	(i)	  	the Member Information with respect to each Nominating Member and Member Associated Person;	
 
32

 

 	 	 	 	(ii)	  	a representation that each member nominating a Member Nominee is a holder of record of shares of the Company
entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such
nomination;	
				
	 		 	(iii)	  	all information regarding each Member Nominee and Member Associated Person that would be required to be disclosed in a solicitation of proxies subject to Section 14 of the Exchange Act, the written consent of each Member Nominee to being named in a proxy statement as a nominee and to serve if elected and a completed signed questionnaire, representation and agreement required by Regulation 71;	
				
	 		 	(iv)	  	a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among a Nominating Member, Member Associated Person or their respective associates, or others acting in concert therewith, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Nominating Member, Member Associated Person or any person acting in concert therewith, were the “registrant” for purposes of such rule and the Member Nominee were a director or executive of such registrant;	
				
	 		 	(v)	  	a representation as to whether the Nominating Member intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s outstanding shares required to approve the nomination or (b) otherwise to solicit proxies from members in support of such nomination;	
				
	 		 	(vi)	  	all other information that would be required to be filed with the Securities and Exchange Commission if the Nominating Member and Member Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and	
				
	 		 	(vii)	  	a representation that the Nominating Member shall provide any other information reasonably requested by the Company.	
			
	 	(g)	 	The Nominating Member shall also provide any other information reasonably requested by the Company within ten Business Days after such request.	
			
	 	(h)	 	In addition, the Nominating Member shall further update and supplement the information provided to the Company in the Notice of Nomination or upon the Company’s request pursuant to Regulation 70(g), as needed, so that such information shall be true and correct as of the record date for the	
 
33

					
 	 	 	  	meeting and as of the date that is ten Business Days before the meeting or any adjournment or postponement thereof.
Such update and supplement must be delivered personally or mailed to, and received at the principal executive office of
the Company, addressed to the Secretary, by no later than five Business Days after the record date for the meeting (in the
case of the update and supplement required to be made as of the record date), and not later than seven Business Days
before the date for the meeting (in the case of the update and supplement required to be made as of ten Business Days
before the meeting or any adjournment or postponement thereof).	
			
	 	(i)	  	The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that the nomination was not made in accordance with the procedures set forth in this Regulation 70, and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.	
			
	 	(j)	  	If the Nominating Member (or a qualified representative of the Nominating Member) does not appear at the applicable meeting of members to nominate the Member Nominee, such nomination shall be disregarded and such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Regulation 70, to be considered a qualified representative of the Nominating Member, a person must be a duly authorised officer, manager or partner of such Nominating Member or must be authorised by a writing executed by such Nominating Member or an electronic transmission delivered by such Nominating Member to act for such Nominating Member as proxy at the meeting of members, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of members.	
			
	 	(k)	  	Nothing in this Regulation 70 shall be deemed to affect any rights of the holders of any New Class of Shares pursuant to any applicable provision of the Memorandum or these Articles.	
		
101.	 	Unless the Board of Directors determines otherwise, to be eligible to be a nominee for election or reelection as a director, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Regulation 70) to the Secretary at the principal executive office of the Company a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any Voting Commitment with any person or entity that has not been disclosed to the Company or (ii) any Voting Commitment that	
 
34

									
	 	could limit or interfere with such person’s ability to comply with such person’s fiduciary duties as a director under applicable Law and (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein.	
		
102.	 	The order of business at all meetings of members shall be as determined by the person presiding over the meeting.	
		
	 	DIRECTORS	
		
103.	 	The first directors of the Company shall be appointed by the subscribers to the Memorandum; and thereafter, the directors (other than New Share Directors) shall be elected by resolution of members at the annual meeting of members.	
			
104.	 	(a)	  	Except as otherwise provided for or fixed pursuant to the rights of the holders of any New Class of Shares to elect additional directors, the total number of directors constituting the entire Board of Directors shall be not less than one nor more than 12, with the then-authorised number of directors being fixed from time to time by the Board of Directors in accordance with these Articles.	
			
	 	(b)	  	During any period when the holders of any New Class of Shares have the right to elect additional directors, upon the commencement, and for the duration, of the period during which such right continues: (i) the then total authorised number of directors of the Company shall automatically be increased by such specified number of additional directors, and the holders of New Shares shall be entitled to elect the additional directors pursuant to the designation of the New Class of Shares, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board of Directors, whenever the holders of any New Class of Shares having such right to elect additional directors are divested of such right pursuant to the provisions of such New Class of Shares, the terms of office of all such additional directors elected by the holders of such New Class of Shares, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate, and the total and authorised number of directors of the Company shall be reduced accordingly.	
		
105.	 	The Board of Directors (other than New Share Directors) shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the 2012 annual meeting of members; Class II directors shall initially serve until the 2013 annual meeting	
 
35

					
	 	of members; and Class III directors shall initially serve until the 2014 annual meeting of members. Commencing with the 2012 annual meeting of members, directors of each class the term of which shall then expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office. In case of any increase or decrease, from time to time, in the number of directors (other than New Share Directors), the number of directors in each class shall be apportioned as nearly equal as possible.	
		
106.	 	Except for New Share Directors, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by a resolution of members.	
		
107.	 	A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice is received by the Company or from such later date as may be specified in the notice.	
		
108.	 	Notwithstanding Regulation 70 above and subject to the rights of the holders of any New Class of Shares then outstanding, newly created directorships resulting from any increase in the authorised number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Board of Directors. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.	
		
109.	 	The Company may determine by resolution of directors to keep a register of the Board of Directors containing:	
			
	 	(a)	  	the names and addresses of the persons who are directors of the Company;	
			
	 	(b)	  	the date on which each person whose name is entered in the register was appointed as a director of the Company; and	
			
	 	(c)	  	the date on which each person named as a director ceased to be a director of the Company.	
		
110.	 	If the Board of Directors determines to maintain a register of directors, a copy thereof shall be kept at the registered office of the Company, and the Company may determine by resolution of directors to register a copy of the register with the Registrar.	
		
111.	 	With prior or subsequent approval by a resolution of members, the Board of Directors may, by a resolution of directors, fix the emoluments of the Board of Directors with respect to services to be rendered in any capacity to the Company.	
 
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112.	 	A director shall not require a share qualification and may be an individual or a company.	
		
	 	POWERS OF DIRECTORS	
		
113.	 	The business and affairs of the Company shall be managed by the directors, who may pay all expenses incurred preliminary to and in connection with the formation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or these Articles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorised by these Articles and to such requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistent with these Articles, nor shall such requirement invalidate any prior act of the Board of Directors which would have been valid if such requirement had not been made.	
		
114.	 	The Board of Directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. The resolution of directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company.	
		
115.	 	Every officer or agent of the Company has such powers and authority of the Board of Directors, including the power and authority to affix the Seal, as are set forth in these Articles or in the resolution of directors appointing the officer or agent, except that no officer or agent has any power or authority with respect to the matters requiring a resolution of directors under the Act.	
		
116.	 	Any director which is a body corporate may appoint any person its duly authorised representative for the purpose of representing it at meetings of the Board of Directors or with respect to written consents.	
		
117.	 	The continuing directors may act notwithstanding any vacancy in the Board of Directors, save that if their number is reduced to their knowledge below the number fixed by or pursuant to these Articles as the necessary quorum for a meeting of the Board of Directors, the continuing directors or director may act only for the purpose of appointing directors to fill any vacancy that has arisen or summoning a meeting of members.	
		
118.	 	The Board of Directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or pledged as security for any debt, liability or obligation of the Company or of any third party.	
		
119.	 	All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.	
 
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120.	 	The Company may determine by resolution of directors to maintain at its registered office a register of mortgages, charges and other encumbrances in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance:	
			
	 	(a)	  	the sum secured;	
			
	 	(b)	  	the assets secured;	
			
	 	(c)	  	the name and address of the mortgagee, chargee or other encumbrancer;	
			
	 	(d)	  	the date of creation of the mortgage, charge or other encumbrance; and	
			
	 	(e)	  	the date on which the particulars specified above in respect of the mortgage, charge or other encumbrance are entered in the register.	
		
121.	 	The Company may further determine by a resolution of directors to register a copy of the register of mortgages, charges or other encumbrances with the Registrar.	
		
122.	 	The consent of the members shall not be required under Section 175 of the Act for any sale, transfer, lease, exchange or other disposition of more than fifty percent in value of the assets of the Company if such disposition is made by the Company to one or more subsidiaries of the Company.	
		
	 	PROCEEDINGS OF DIRECTORS	
		
123.	 	The Board of Directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as the Board of Directors may determine to be necessary or desirable.	
		
124.	 	A director shall be deemed to be present at a meeting of the Board of Directors if he participates by telephone or other electronic means and all directors participating in the meeting are able to hear each other.	
		
125.	 	A director shall be given not less than three days notice of meetings of the Board of Directors, but a meeting of the Board of Directors held without three days notice having been given to all directors shall be valid if all the directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a director at a meeting shall constitute waiver on his part.	
		
126.	 	A director may by a written instrument appoint an alternate who need not be a director, and an alternate is entitled to attend meetings in the absence of the director who appointed him and to vote or consent in place of the director.	
 
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127.	 	A meeting of the Board of Directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one half of the total number of directors, unless the total number of directors is two, in which case a quorum shall be two directors.	
		
128.	 	If the Company shall have only one director, the provisions herein contained for meetings of the Board of Directors shall not apply, but such sole director shall have full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or these Articles required to be exercised by the members of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution of directors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.	
		
129.	 	At every meeting of the Board of Directors, the Chairman of the Board of Directors shall preside as Chairman of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board of Directors is not present at the meeting, the Vice Chairman of the Board of Directors shall preside. If there is no Vice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting, the directors present shall choose someone of their number to be Chairman of the meeting.	
		
130.	 	An action that may be taken by the Board of Directors or a committee of the Board of Directors at a meeting may also be taken by a resolution of directors or a committee of the Board of Directors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by a simple majority of the directors or members of the committee, as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one or more directors.	
		
131.	 	The Board of Directors shall cause the following corporate records to be kept:	
			
	 	(a)	  	minutes of all meetings of the Board of Directors, members, committees of the Board of Directors, committees of officers and committees of members;	
			
	 	(b)	  	copies of all resolutions consented to by the Board of Directors, members, committees of the Board of Directors, committees of officers and committees of members; and	
			
	 	(c)	  	such other accounts and records as the Board of Directors by resolution of directors consider necessary or desirable in order to reflect the financial position of the Company.	
		
132.	 	The books, records and minutes shall be kept at the registered office of the Company, its principal place of business or at such other place as the Board of Directors determines.	
 
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133.	 	The Board of Directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.	
		
134.	 	Each committee of the Board of Directors has such powers and authorities of the Board of Directors, including the power and authority to affix the Seal, as are set forth in the resolution of directors establishing the committee, except that no committee has any power or authority to amend the Memorandum or these Articles, to appoint the Board of Directors or fix their emoluments, or to appoint officers or agents of the Company.	
		
135.	 	The meetings and proceedings of each committee of the Board of Directors consisting of two or more directors shall be governed mutatis mutandis by the provisions of these Articles regulating the proceedings of the Board of Directors so far as the same are not superseded by any provisions in the resolution establishing the committee.	
		
	 	OFFICERS	
		
136.	 	The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officers may consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries and Treasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.	
		
137.	 	The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibility of the Chairman of the Board of Directors to preside at meetings of the Board of Directors and members, the Vice Chairman to act in the absence of the Chairman, the President to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise to perform such duties as may be delegated to them by the President, the Secretaries to maintain the register of members, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable Law, and the Treasurer to be responsible for the financial affairs of the Company.	
		
138.	 	The emoluments of all officers shall be fixed by resolution of directors.	
		
139.	 	The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolution of directors.	
 
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	 	CONFLICT OF INTERESTS	
		
140.	 	No agreement or transaction between the Company and one or more of its directors or any person in which any director has a financial interest or to whom any director is related, including as a director of that other person, is void or voidable for this reason only or by reason only that the director is present at the meeting of the Board of Directors or at the meeting of the committee of the Board of Directors that approves the agreement or transaction or that the vote or consent of the director is counted for that purpose if the material facts of the interest of each director in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith or are known by the other directors.	
		
141.	 	A director who has an interest in any particular business to be considered at a meeting of the Board of Directors or members may be counted for purposes of determining whether the meeting is duly constituted.	
		
	 	INDEMNIFICATION	
			
142.	 	(a)	 	To the fullest extent permitted by applicable Law, directors shall not be personally liable to the Company or any member for any acts or omissions in the performance of their duties as directors.	
			
	 	(b)	 	The rights conferred on any person to be indemnified hereunder shall not be exclusive of any other rights that such person may have or hereafter acquire under any Law, provision of the Memorandum or these Articles, agreement, resolution of directors, resolution of members or otherwise.	
			
	 	(c)	 	Subject to the limitations hereinafter provided, the Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who:	
				
	 		 	(i)	  	is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; or	
				
	 		 	(ii)	  	is or was, at the request of the Company, serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.	
			
	 	(d)	 	If a person to be indemnified provides an undertaking to repay expense advances if it should be ultimately determined that the person is not entitled to be indemnified pursuant to these Articles, the Company shall	
 
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	 		  	pay any expenses, including legal fees, reasonably incurred by any such person in defending any legal, administrative or investigative proceedings in advance of the final disposition of such proceedings.	
		
143.	 	Notwithstanding the foregoing, the Company shall indemnify a person only if the person acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.	
		
144.	 	The decision of the Board of Directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is in the absence of fraud, sufficient for the purposes of these Articles, unless a question of Law is involved.	
		
145.	 	The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful.	
		
146.	 	If a person to be indemnified has been successful in defence of any proceedings referred to above, the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments and fines reasonably incurred by the person in connection with the proceedings.	
		
147.	 	The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who at the request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.	
		
	 	SEAL	
		
148.	 	The Company may have more than one Seal and references herein to the Seal shall be references to every Seal which shall have been duly adopted by resolution of directors. The Board of Directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the registered office of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of a director or any other person so authorised from time to time by resolution of directors. Such authorisation may be before or after the seal is affixed, may be general or specific and may refer to any number of sealings. The Board of Directors may provide for a facsimile of the Seal and of the signature of any director or	
 
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	 	authorised person which may be reproduced by printing or other means on any instrument, and it shall have the same force and validity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.	
		
	 	DISTRIBUTIONS BY WAY OF DIVIDENDS	
		
149.	 	The Board of Directors may, by resolution of directors, authorise a Distribution by way of dividend at a time and in an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the Distribution, the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.	
		
150.	 	Dividends may be paid in money, shares or other property.	
		
151.	 	Notice of any dividend that may have been declared shall be given to each member as specified in Regulation 132, and all dividends unclaimed for three years after having been declared may be forfeited by resolution of directors for the benefit of the Company.	
		
152.	 	No dividend shall bear interest as against the Company, and no dividend shall be paid on treasury shares.	
		
	 	ACCOUNTS AND AUDIT	
		
153.	 	The Company may by resolution of members call for the Board of Directors to prepare periodically a profit and loss account and a balance sheet. The profit and loss account and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit or loss of the Company for the financial period and a true and fair view of the state of affairs of the Company as at the end of the financial period.	
		
154.	 	The Company may by resolution of members call for the accounts to be examined by auditors.	
		
155.	 	The first auditors shall be appointed by resolution of directors, subsequent auditors shall be appointed by a resolution of members.	
		
156.	 	The auditors may be members of the Company but no director or other officer shall be eligible to be an auditor of the Company during his continuance in office.	
		
157.	 	The remuneration of the auditors of the Company:	
			
	 	(a)	  	in the case of auditors appointed by the Board of Directors, may be fixed by resolution of directors; and	
			
	 	(b)	  	subject to the foregoing, shall be fixed by resolution of members or in such manner as the Company may by resolution of members determine.	
 
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158.	 	The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meeting of the members of the Company and shall state in a written report whether or not:	
			
	 	(a)	  	in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit or loss for the period covered by the accounts, and of the state of affairs of the Company at the end of that period, and	
			
	 	(b)	  	all the information and explanations required by the auditors have been obtained.	
		
159.	 	The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Company or shall be served on the members.	
		
160.	 	Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.	
		
161.	 	The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company as which the Company’s profit and loss account and balance sheet are to be presented.	
		
	 	NOTICES	
		
162.	 	Any notice, information or written statement to be given by the Company to members may be served in the case of members holding registered shares in any way by which it can reasonably be expected to reach each member or by mail addressed to each member at the address shown in the register of members.	
		
163.	 	Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sending it by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the Company.	
		
164.	 	Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.	
 
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	  	PENSION AND SUPERANNUATION FUNDS	
		
165.	  	The Board of Directors may establish and maintain or procure the establishment and maintenance of any non-contributory or contributory pension or superannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to any persons who are or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated with the Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid or who hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any such other company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may make payments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with any such other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment, or office shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.	
		
	  	ARBITRATION	
		
166.	  	Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the other hand, touching the true intent and construction or the incidence or consequences of the Memorandum, these Articles or of the Act, touching anything done or executed, omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, the Memorandum, or to any Act or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a single arbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the reference appoint an umpire.	
		
167.	  	If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitrator shall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint an arbitrator to act in the place of the arbitrator of the defaulting party.	
		
	  	VOLUNTARY WINDING UP AND DISSOLUTION	
		
168.	  	The Company may voluntarily commence to wind up and dissolve by a resolution of members, but if the Company has never issued shares it may voluntarily commence to wind up and dissolve by resolution of directors.	
 
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	 	CONTINUATION	
		
169.	 	The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporated under the Laws of a jurisdiction outside the British Virgin Islands in the manner provided under those Laws.	
 
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We, Offshore Incorporations Limited, of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands for the purpose of incorporating an International Business Company under the Laws of the British Virgin Islands hereby subscribe our name to these Articles of Association the 1 st day of July, 2002.

	 	SUBSCRIBER	  	Offshore Incorporations Limited	
	 		  	E. T. POWELL	
			
	 		  	(Sd.)    E.T. POWELL	
	 		  	Authorised Signatory	
			
	 	in the presence of: WITNESS	  	FANDY TSOI	
			
	 		  	(Sd.)    Fandy Tsoi	
	 		  	/F Ruttonjee House
Duddell Street, Central	
	 		  	Hong Kong	
	 		  	Production Supervisor