EDIROL EUROPE LIMITEDLiquidiert

Edirol Europe Limited

Köln

Jahresabschluss zum 31. Dezember 2006

BALANCE SHEET 31. December 2006

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2006

ACCOUNTING POLICIES

The financial statements are prepared in accordance with applicable United Kingdom accounting standards. The particular accounting policies adopted, which have been applied consistently throughout the current and the prior financial year, are described below.

Accounting convention

The financial statements are prepared under the historical cost convention.

Cash flow statement

Under Financial Reporting Standard 1, the company is not required to prepare a cash flow statement as a group cash flow statement has been included in the financial statements of its ultimate parent company.

Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Stocks

Stocks are valued at the lower of cost and net realisable value.

Pensions

The company operates a defined contribution pension scheme. Contributions under the scheme are charged to the profit and loss account as incurred.

Taxation

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements.

Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

Foreign currency

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the forward contract rate. These translation differences are dealt with in the profit and loss account.

Derivative financial instruments

The company uses derivative financial instruments to manage its exposure to foreign exchange risk. The company does not hold or issue derivative financial instruments for speculative purposes. Gains and losses arising on these contracts are deferred and recognised in the profit and loss account only when gains and losses associated with the hedged transaction have themselves been reflected in the company's financial statements.

Leases

Rentals payable under operating lease are charged against income on a straight-line basis over the lease term.