For our garment processing segment, our inventory level is determined principally by our sales and production projections for the proceeding three months. The consumption of materials is reviewed on a monthly basis by our Purchasing Department to ensure that adequate level of stocks is maintained so that the production process will not be disrupted. Orders for materials are placed based on the projected production requirement which is estimated from the orders on hand and anticipated orders from our customers.

 For our industrial laundry equipment segment, we purchase the materials and components such as steel plates, iron plates, motors, drums and electrical components used in manufacturing of our in-house industrial laundry equipment, and the industrial laundry equipment that we distribute upon confirmation of orders from our customers. However, we maintain inventories of commonly used spare parts such as motor belts and ball bearings so that we can carry out timely replacements and repairs upon request by our customers. These materials and components are mainly sourced from the PRC.