Operations Review

(Extracted from Annual Report 2008)

MERGER AND ACQUISITION OF YGM MARKETING

YGM Marketing's heritage dates back to 1963 as a garment manufacturer, well-known to its international consumers from the USA and Europe. Sensing a great business opportunity in Singapore, they began operations of its 'Domestic Sales Division' to spearhead wholesale and distribution activities in 1975. Today, YGM Marketing is a dynamic company engaged in the wholesale, retail and export of menswear, apparel and accessories.

The Group has acquired the entire issued share capital of YGM Marketing from previous shareholders, and the total purchase for the acquisition is approximately $14.2 million. The acquisition is financed through a combination of cash payments of about $11.2 million, and the issue of 6,976,000 new ordinary shares in the capital of Travelite Holdings Ltd., at an issue price of $0.43 each. The acquisition was completed on 29th November 2007.

Based on its latest audited financial statements, YGM Marketing increased its revenue by 7.6% to $23.7 million over the preceding year. For FY2008, YGM Marketing contributed 4 months of their revenue amounting to $9.2 million to the Group.

MERGER AND ACQUISITION OF FASHION STREET

With a strong heritage from a successful shoe manufacturer in Japan, Mr Shinji Anno established Fashion Street in 1998. Amid a competitive market for ladies shoes in Singapore, it's house brand U.R.S & inc. continues to grow from strength to strength. With almost 10 years of track record in Singapore, Fashion Street looks set to explore greater franchising opportunities ahead. It has also been distributing Tumi's luxury range of luggage in Singapore and Malaysia since 1999.

The Group has acquired 70% of Fashion Street on 31st December 2007. The total purchase for the acquisition is approximately $2.55 million and is financed through a combination of cash and shares.