INBOUND SUPPLY CHAIN SOLUTION Spread Logistics Service Package 1

Information of Spread Logistics Company Found: 2005 Jan. Capital: US$ 30,000,000.00 Worldwide Offices : Own offices- Hong Kong, Shenzhen, Taiwan,Shanghai With agents all over world Existing Customers: Foxconn, Intel, TPK, Epson, Apple, Coddy(Garments), Boardtex, Compeq, Giat Int’l and others

Introduction Of Spread Logistics Service Networks Spread USA Spread Taiwan Spread Singapore Head Office: Hong Kong Mainland offices: Shenzhen Shanghai Wuhan Xiamen Suzhou Overseas offices: Taipei, Taiwan Singapore Los Angeles, US Partners: Korean Japan Malaysia Vietnam Philippine

Oversea Operation Facility Hong Kong Taiwan Singapore Shenzhen Los Angeles Korean/Japan Malaysia Shanghai 海运运输代理 海运及空运运输代理

Spread Hong Kong Warehouse Space: Approx 9,800 sqmt Warehouse Loading Bay： 18 Distance from HK airport： 50minutes Distance to Shenzhen border： 60 minutes Unit 4008-4013 E, 4th Fl., ATL Logistics Centre, Centre B, Berth 3 ,Kwai Chung Container Terminal , Kwai Chung , N. T. HK

Security of ATL Facility Comprehensive Traffic Management System: bar code parking card control for all in and out truck/lorry. Floor control gate for delivery and pick up. Full computerized traffic monitor system and traffic light system 24 Hours security guard patrols ( by hours) More than 250 sets of CCTV monitoring

Spread Hong Kong Warehouse Facility Information Warehouse Location Unit 4008-4013 E, 4th Fl., ATL Logistics Centre, Centre B, Berth 3 ,Kwai Chung Container Terminal , Kwai Chung , N. T. HK Warehouse Capacity 15 Loading/receiving Bay Total space: 8,800 sq. meter with approx. 4,500 standard pallets space. 4-6 rank high Cargo Rack Electricity Folklifts, Gas Folklits, PDA, RF system Bar code scanners, Bar code printer Flexibility WMS System Internet Cargo tracking and inventory system

HK Warehouse Capability Warehouse Service Receiving/ Loading/In and Out handing Inventory Control Cargo Tracking, pick and pack, sorting ETC. Truck arrangement- cargo pick up and delivery HK Local Pick up and delivery China/HK Cross border pick up and delivery with GPS linkage China domestic truck arrangement and tracking system Import and Export Forwarder service Sea and Air shipment operation Local and oversea trucking In and out customs clearance and documentation arrangement RMA/Courier/Express service handling Other value-added Service HK import re- export clearance arrangement Special arrangement of cargo management Provided import/export license application China shipment inspection application service . Other value- added service base on customer’s requirement (cargo sorting, pick and pack, cargo inspection etc. ) RMA Centre

Spread HK warehouse operation process- Receiving Truck move into ATL Truck waiting for permission from ATL and truck cargo to Spread warehouse Truck move to 13th Floor for waiting Truck driver make register to Spread warehouse Release receiving Sequence number PDA Scan/ Bar code label Verify doc. And Scan for data Input, then create Entry no. for Cargo receiving Receives cargo Base on entry no And doc. Doc.Scan Define exception (damage or Shortage )etc. Complete receiving In warehouse storage position Bar code Warehouse position

Spread HK warehouse operation process- Loading (Export) Verify the actual Cargo detail Vs. Doc. (invoice or P/N no.) And Pallets mode Print Truck loading manifest Warehouse manage the cargo ( carton sorting) (Re palletization ) base on customer Loading detail list Customer make Cargo plan in system Spread warehouse Print out the Loading detail list no yes Verify the truck licenses accuracy to ensure correct Truck departure From warehouse Delivery cargo Seal truck with customer Seal and take photo / video And pass to customer Scan cargo and Load cargo into truck

Warehouse Security Information Certified Classification A of TAPA 24 Hours Internet CCTV connection /monitor Total 57 units of CCTV covered whole warehouses with Internet tracing system. 27 units of Door Alarm 29 units of Infrared Ray Alarm System Finger print+ card control of server room Security door/check for in and out TAPA area 24 Hours security patrols, internet connect of 10 patrol points with records Daily patrol check list with action items follow up Completed fire prevention system. Completed contingency plan of system back up. Full coverage of insurance of cargo value amount

Hong Kong Warehouse Management Distribution Center The center offers immediate & customized distribution. whenever, you needed we can completed the work. With our JIT production, it allows us to deliver the cargo to the designated location in time RMA Center Provide sorting, verify difference & precise P/L for customs clearance can safe you the unnecessary stress, trouble, and time on complicated procedures, reduce TAT . HK Warehouse Accurate and On time system All operation of receiving loading under PDA/system linkage Track back the cargos from air/sea point and predict the cargos from trucking. On line system notify the customer if any storage need to re-arrange Additional Service. Immediate pick up, delivery service HK Import/Export customs clearance. Offers special service for customers with special needs. Provides Import/Export application. Efficient China inspection service.

HK WMS PDA RF WMS SYSTME Real-time Inventory control system Spread WMS system All use RF PDA WMS system for cargo in/out even movement Real-time Inventory report Data will transfer to WMS system 5 second after cargo been received. Ensure urgent shipment management 2. Inventory aging analysis 1.Shorten the cargo receiving /waiting time 2. Ensure loading accuracy and efficiency 24 hours CCTV monitor 100% guarantee of cargo safety 1.Total 57 CCTV covered every cargo rack, bin position and loading bay 2. All record will keep for 3 months could track 3 .Pass TAPA certificate with Warehouse Security Control,

Hong Kong RMA Center Express pass China Customs clearance RMA Center Scan all Part number and upload to customer Sort cargo base on customer requirement Re-packing Re-labeling Old Pattern How：Apply import customs base on oversea customer’s cargo information Spread RMA Center Result：Import data discrepancy cause cargo been hold or long stage Roof clause： 1.Varience between cargo vs. packing and invoice 2. No standardized packing vs. documents detail 3. Non proper packing, not easy to identify for physical cargo. Generate new packing list Provide the China inspection service Express pass China Customs clearance Note：RMA means Return Material Advise

Cisco identify CO procedure 1 Unpacked origin of inbound pallet 2 Identification by the CO by Serial No 3 Manual sort cargo based on c/o 4 Bar code scan- S/N & P/N 5 Repack--Repacked the cargoes with RMA label

Major point of sorting operation procedure Identify by the bar code label serial number Need to Sort No need to Sort FOC / FCH / FHK Other Code C/O :CHINA C/O:Non-China Split new invoice for China by commodity Remain original invoice

Classification of country of Origins Code for Origin China & HK FOC / FCH --- CHINA FHK --- CHINA HONGKONG Other than above Non-CHINA

Country of Origin of Bar code label Sample of China Sample of Non-China

Picture of actual cargo

2009 YTD non China cargo inventory by month Apr May Jun Jul Aug Sep Oct Nov TOTAL Total pallet 6 10 18 9 4 2 1 56 Total carton 74 34 130 70 30 118 483

2009 YTD non China cargo inventory by month Apr May Jun Jul Aug Sep Oct Nov TOTAL Total pallet 6 10 18 9 4 2 1 56 Ctns in Pallet 68 24 110 46 5 87 351 Loosen carton 20 13 31 8 132

Why need License HK Government Import and Export license Base on Chapter 60 of the Laws of Hong Kong. The legal basis for strategic trade control in Hong Kong is the Import and Export Ordinance, Carriers’ Liability The Ordinance requires that carriers cannot accept licensable goods for export without receiving from the exporter a valid copy of the export license. Carriers are also required to receive from the importer a valid import license before releasing the goods.

License Application Process comparison Normal Process Lead time- 15 working days 1st day 2nd day 3rd -5th days 6th- 13th days 15th days AIP (Approval in principle: Lead time- 3 working days 1st day 2nd day 3rd days Essence requirement : All application need to done before cargo arrives HK

AIP Qualification by TISC Selective customer /carrier Volume customer Creditable customer/HK rep. Good record for import and export application for 2 years at least Commodity no need end- user statement Take 4- 6 working weeks for first application

Country No. of Parts AIP no. of parts Achieve % US 241 195 80.9% KR CISCO 2009 AIP Performance Country No. of Parts AIP no. of parts Achieve % US 241 195 80.9% KR 223 87.4% SG 238 81.9% CN 213 175 82.3% NL 218 89.4% AU 84 0% Total 1217 955 78.5%

Issue of Discussion No timely application Not been notified for license application before shipment Arrival / Departure HK Impact A. Need to provide explain letter to TISC and may pre long the application time to 2-4 weeks) B. Penalty or Warning Letter) Unlimited fine Imprisonment for seven years

Thank You !