4. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET

Prepayments classified in current assets represent advance payments made for raw materials and for property, plant, and equipment.

Prepayment classified in non-current assets is the amount representing the down payment paid for one sewerage engineering project for the processing segment to improve the sewage water discharge process so as to comply with the stringent environmental laws. This was incurred in the ordinary course of business on normal commercial terms. Upon completion of the project, the amount will be charged to the profit and loss, thus the recoverability assessment is not applicable.