Financials

FULL YEAR FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 OCTOBER 2009

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Balance Sheet

Review of Performance

Overview

Amidst challenging market conditions, the Group's revenue decreased by 9% to $29.5 million in FY2009. However, due to lower operating costs, Group net profit increased by 23% to $1.4 million in FY2009.

Revenue

Retail revenue decreased by 10% or $2.5 million to $22.2 million due to lower sales recorded in Singapore and Malaysia. Sales in these two countries decreased by 15% or $1.8 million and 7% or $0.8 million respectively as the retail sector in both countries was affected by the economic downturn. On a positive note, sales in Hong Kong increased by $0.1 million driven mainly by the demand from Chinese tourists.

Wholesale revenue decreased by 7% or $0.4 million to $5.1 million in FY2009 due to lower sales to Indonesia and to "Other Markets" such as Vietnam and Philippines. Our business partners in these markets had deferred their purchases amidst unfavourable economic conditions. However, sales to Thailand was higher as a result of inventory replenishment by our partner there during the period under review and this had helped to cushion the decrease in wholesale revenue.

Revenue from our golf management business decreased marginally due to lower golf professional coaching fees despite an increase in the driving range collections.

"Other Revenue" decreased by $0.1 million to $0.4 millon in FY2009.

Profitability

The Group's operating profit was comparable to FY2008 notwithstanding a decrease in revenue due mainly to prudent costs management.

The cost of goods decreased by 8% or $1.5 million on the back of lower sales revenue. Gross margin was relatively lower compared to FY2008 due to stiff competition and aggresive promotion amidst the economic downturn. Staff costs decreased by 10% or $0.4 million due mainly to lower costs incurred by the Singapore operations as a result of a lower incentive expense coupled with the costs savings provided from the government's jobs credit scheme. Rental costs dipped by 8% or $0.2 million as a lower rental costs in the Singapore operations had helped to offset the higher costs incurred by the Malaysia and Hong Kong operations. The higher depreciation charge was mainly attributed to new additions of plant, machinery and equipment. The foreign currency exchange gain as oppose to a loss in the previous conrresponding period was mainly attributable to revaluation gain of foreign currency denominated deposits. Other operating expenses decreased by 13% or $0.4 million.

Tax expense was lower due mainly to a lower chargeable income and a decrease in tax rate of the Singapore operations.

As a result of the above, the Group's net profit increased by 23% or $0.3 million to $1.4 million in FY2009.

Financial Position
(31 October 2009 versus 31 October 2008)

The Group's current ratio improved from 6.9 times to 9.0 times. Working capital balance amounted to $19.9 million as compared to $21.3 miilion in FY2008. Inventories had decreased by $2.1 million to $8.8 million in FY2009 as the Group had been prudent in its purchases and an aggresive sale promotion had improved inventory turnover. The Group maintained a comfortable cash position of $8.7 million despite the purchase of an available for sale investment of approximately $2.0 million during the last quarter of FY2009.

Commentary

The Board expects the operating environment in the next twelve months to remain uncertain and challenging despite an improved economic outlook. The Group will continue to manage its costs and business expansion prudently and will continue to expand its range of products.

With regards to the Group's investment in Trafford Resources Limited ("Trafford"), Trafford quoted share price as at balance sheet date was lower than the price paid by the Group and the resulting valuation loss has been accounted for under the fair value reserve. However, Trafford's share price has since rebounded and is currently trading at prices that are significantly higher than the price paid by the Group.

Trafford has a 18.4% interest in Robust Resources Limited, a gold mining company and 50% interest in Ironclad Mining Limited, an iron ore mining company. Both these companies are listed on Australia Stock Exchange (ASX).

Barring any unforseen circumstances, the Board expects the Group to remain profitable in FY2010.