Sourcing and Supply Chain Management Solutions for the Consumer Product Industry Chong Luen Hing Garments (CLH), Ltd – Hong Kong Shunde Mao Nian Garments, Ltd - China Shunde Chong Luen Hing Trading Co., Ltd – China Chong Luen Hing Garments (CLH), Ltd – USA Beverly Hills New York Hong Kong China The CLH Group 8383 Wilshire Blvd Suite 614 Beverly Hills, CA Madison Ave. Suite 1201 New York, NY Unit A, 3/F, Mackenny Centre Castle Peak Road Kowloon, Hong Kong Xintang Industrial Area Lunjiao Shunde, Guandong China The CLH Group

The CLH Group – An Overview The Apparel Industry and Its Challenges The CLH Group Concept The CLH Group Solution The CLH Group Customer Value Proposition The CLH Group Proof of Concept Conclusions….. Our Team The CLH Group

We allow consumer product companies to outsource the coordination of all the individual supply chain elements that they now either do themselves or outsource one by one – sourcing, production monitoring, EDI, inbound logistics, customer allocations, etc. We assume control over product specific supply chains, domestic and international fulfillment and deliver significant economic advantages to our customers. We are currently provided warehousing and distribution services both in the United States and in China. Our warehousing and distribution facilities in China serve as a consolidation facility for merchandise targeted in the China market, as well as merchandise slated for the United States market. In addition, in China, we offer pick and pack services for the China market as well as merchandise for the United States Retail market. Definitions: Sourcing and Manufacturing: The functions involved in identifying and contracting with suppliers, factories, and other points of manufacture primarily in off-shore labor markets. Supply Chain Management: The process of management needed to move finished goods from the point of manufacture to the sales floors of domestic retailers and wholesalers. The CLH Group – An Overview The CLH Group

The CLH Group has been a market leader for over 25 Years, whose management has collectively over 200 years experience Over 2,000 employees Capacity per month –1,000,000 pieces per month. Beginning in July 2003, our capacity will double as we are in the process of completing our second stage of expansion, adding an additional 200,000 square feet of production space. Fabric Specialty – –Brushed Knits – textured, interlock, jersey, pointelle, jacquards, micro yarns, sherpas, fleece, ribs. –Wovens – Flannels, light weight wovens, stretch wovens, textures, multiple printing processes, yarn-dyed. Quality Control – 7 step Process According to WRAP Program – WRAP Certified factory. Lead times – Landed Door to Door – days after all production details are confirmed Member of the Customs Trade Partnership Against Terrorism (C-PAT) Our Facilities in China: Factory Specifications The CLH Group – An Overview

China Corporate Offices and Manufacturing Facilities The CLH Group – An Overview The CLH Group

China Corporate Offices and Manufacturing Facilities Fabric Storage Dormitory for EmployeesManufacturing Facility Production Line The CLH Group – An Overview The CLH Group

China Corporate Offices and Manufacturing Facilities Cafeteria – Accommodates 600 EmployeesInspection Department The CLH Group – An Overview The CLH Group

CLH Distribution Center for Jockey International

WRAP Certificate The CLH Group – An Overview The CLH Group

Supply Chain has become too complex for traditional management techniques Managers and staff are creative…not operational Seasonal business with a fixed overhead model Difficulty fully exploiting trends Profits based on creative sourcing and supply chain management Difficulty in accessing a full range of overseas factories and suppliers Resistance to change. The Apparel Industry and Its Challenges The CLH Group

Global, Fragmented, Geographically Diverse, Inefficient 1999, Wholesale import value of apparel products into the U.S. - $127 billion Estimated cost of direct Supply Chain Management (SCM) costs - $80 billion Manufacturers are highly fragmented in size and specialty. Cultural characteristics mitigate against wide scale use of information technologies. Every company has warehousing and permanent overhead tasked to SCM and production. The supply chain is complex. Profit margins are low and getting lower because of supply chain costs and dynamic competition. Retailers are becoming more dictatorial. The Apparel Industry and Its Challenges The CLH Group

Allows companies to focus on their core competencies – design, sales and merchandising while we focus on product sourcing, and other supply chain management challenges Our Customers can outsource all or part of the supply chain process We are not a technology company, but a company that uses technology. We use this technology to create a pipeline in the supply chain that is completely transparent Consumer Product Companies design but do not manufacture their products Addresses the full suite of services consumer product companies can outsource to The CLH Group from sourcing to EDI to shipments to clients customers Unfortunately, in the process, they must worry about a myriad of Supply Chain Issues: Sourcing Manufacturing Quality Assurance Pre-shipment packaging Trans-shipment Payment Guarantees Insurance Containers Customs Entry Customs Documents Customs Exams Customs Advance Warehouse Handling In Warehouse Handling Out Warehouse Storage Unloading Sort & Segregate Labeling Financial Analysis The CLH Group Concept The CLH Group

There are no infrastructure constraints to exploiting market momentum. Specialization Reduction or elimination of fixed overhead Technology is Delivered…not Developed Re-emphasis on core competencies Real time status is transparent to our customer and their customer Supply Chain Simplicity Superior Quality of Product and Information The CLH Group Solution The CLH Group

Change from a fixed cost to variable cost business model. Access to unattainable economies of scale. They save time, money, and personnel. Renewed focus on core competencies. Trade credit is simplified. Technology gains are delivered by CLH, rather than developed from within. Simplification of process. Creative talent and marketing innovation is unshackled. Market momentum can be fully exploited. The CLH Group Customer Value Proposition The CLH Group

The CLH Group team has delivered $300 million in product and SCM services over a six year period. The parent company of CLH USA, The CLH Group has consistently maintained a dominant manufacturing position in China for the last twenty-five years. Our Customers Branded and non-branded apparel companies Licensees: Licensees of Large Branded Companies Special Situations: Entertainment companies, Corporations The CLH Group Proof of Concept The CLH Group

Supply chains are inefficient and must be better controlled. Principals are confused as to their solutions. Specialization isn’t a complete solution unless it adds to the bottom line. The CLH Group offers relief from uncertainty and gives our customers added control without investment in people or technology. In short: We provide an opportunity for our customers to focus on their core competencies – design, merchandising and sales, while we do the non- revenue generating back office functions What we stand for is: Product Quality On time delivery Integrity – Both in our product and our business practices Conclusions…. The CLH Group

Director and Chairman of the Board Mr. Wong has spent the last 30 years in multiple facets of the apparel industry. He owns and operates several factories in Southern China. He was a pioneer in the export business from mainland China, entering that market from Hong Kong over 20 years ago. He has extensive knowledge of managing exports from China and the challenges that come with it – Quota, Quality Control, Consistency and Integrity. Mr. Wong has consistently maintained the highest quality and ethical standards available to the apparel trade. Mr. Wong is currently the largest factory employer in the city of Shunde, China. Due to Mr. Wong’s vision and expertise, The CLH Group has maintained an industry leadership position for over 25 years. His aggressive, yet calculated approach to steady growth will lead The CLH Group to the top of its industry for the next 25 years. Billy Wong Our Team The CLH Group

Mr. Vorzimer has been in the Consumer Products market for 17 years, with detailed background in international apparel sourcing and production as well as experience in the financial services industry. Prior to involvement in the apparel industry John was a member of The Geometry Group where he specialized in equity trading, investment banking and analysis of venture capital opportunities. A part owner John is responsible for all financial aspects of CLH USA business and oversees sourcing and manufacturing operations as well as Customer Relationship Management (CRM) in the United States. Before joining The CLH Group, John created an international sourcing company specializing in procurement, supply chain planning and integration. His worldwide sourcing network extends across 29 countries and over one hundred companies with whom John has developed close personal working relationships. He has extensive experience in developing global trade relationships. Since 1996, John has been responsible for placing over $300 million in consumer apparel products through his network of factories for many leaders in the apparel industry. John has a Bachelor of Arts degree in Economics from California State University, Northridge. Director – US Operations John Vorzimer Our Team The CLH Group

Customer Resource Manager (CRM) Laura brings over 25 years of systems management expertise. She is responsible for all Systems related issues – EDI, Data Integrity, Information Flow to Customers, etc. Laura’s department ensures our customers are fully informed every step of the supply chain process. Laura Ramos Design Director Marisa brings 25 years of design experience in multiple product categories. She provides our customers with a high degree of comfort due to her extensive technical design knowledge. Her attention to detail and understanding of product execution is invaluable to our clients. Marisa is charged with the responsibility of developing and training our design staff in China. This is a critical initiative as the industry begins to shift its design efforts overseas. Marisa Fairstein Our Team The CLH Group

Customs and Logistics Manager Jocelyn Brings a tremendous amount of knowledge in the customs administration and logistics arena. She spent 10 years at one of the most well respected customs clearance firms in the country – Carmichael International Customs Brokers. Jocelyn’s department assures our customers that all import documentation is correct and there are no U.S. Customs delays. Jocelyn Woo Our Team The CLH Group