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Gateway to China’s safety. FORWARD LOOKING STATEMENT. The statements made in this presentation are forward- looking statements. Risk factors that could cause actual results to differ materially from those projected in forward-looking statements include, but are not limited
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FORWARD LOOKING STATEMENT The statements made in this presentation are forward- looking statements. Risk factors that could cause actual results to differ materially from those projected in forward-looking statements include, but are not limited to, general business conditions, managing growth, and political and other business risk. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk and other factor detailed in the Company's reports filed with the Securities and Exchange Commission. China Security & Surveillance Technology, Inc. undertakes no duty to update those forward-looking statements.
2008 Q1 FINANCIAL HIGHLIGHTS Revenues (in USD M) Adjusted Net Income (in USD M)* 103% 86% Adjusted Diluted EPS (in USD)* 60% As of 31st March 2008 * Excluding all Non-cash expenses
CORPORATE STRUCTURE China Security & Surveillance Technology, Inc. NYSE: CSR CSST (PRC) Ltd. China Safetech Holdings Ltd (BVI) 100% Golden Group (Shenzhen) Kitt Grant Ltd (Hong Kong) CSST (Hong Kong) Allied Rich Ltd (Hong Kong) Sharp eagle (HK) Ltd (Hong Kong) Sincere On Ltd (Hong Kong) Chain Star Investments Ltd (Hong Kong) Link Billion Investment Ltd (Hong Kong) Ocean Pacific Technology Ltd (Hong Kong) Stonesonic (Chaozhou) Guanling (Beijing) Longhorn (Shenzhen) Cheng Feng (Shanghai) Hongtianzhi Electronics (Shenzhen) HiEasy (Wuhan) MinKing (Changzhou) Tsingvision (Hangzhou)
CSR IS UNIQUELY POSITIONED TO BENEFIT FROM VERTICAL INTEGRATION Total Solution Provider Addressing complete Security & Surveillance Needs of our clients
SUITE OF PRODUCTS DVR Systems Camera Systems Accessories Alarm Systems
WIDE-RANGE OF APPLICATIONS Transportation/Public Areas Gov’t/Non-Profit • Government buildings • Schools • Hospitals • Police stations • Border controls • Sea ports • Traffic monitoring • Bus stations • Airports • Shopping centres • Parks • Tourist destinations Others Commercial/Residential • Residential estates • Commercial buildings • Banks • Hotels • shopping malls • Entertainment venues • Exhibition halls • Factories • Industrial applications
REVENUE BREAKDOWN Revenues by Customers Revenues by Component • Corporate – 60% • Government – 40% • System Integration – 83% • Manufacture – 11.3% • Distribution – 5.7% NB : As of 31st March 2008
GROWING INDUSTRY Key Market Drivers China’s Security Market USD BN Source : China Public Security Guide
SURVEILLANCE FOR ENTERTAINMENT VENUES The Hong Kong Standard Feb 15, 2006
COMPETITIVE ADVANTAGE One-Stop-Shop Large Sales Network World Class R&D Leadership Position Approvals & Permits Comprehensive Product Portfolio
COMPETITIVE ENVIRONMENT • Manufacturers • Strong technical capabilities • Limited sales network • Regional Distributors • Lacks scale • Retail sales of security products • No manufacturing capabilities • Local System Integrators • Lacks scale • Good local relations • Little technical know-how Characteristics 3 Levels of competition None are vertically integrated More than 15,000 vendors in the market
ACQUISITIONS Pending Closed
PARTNERHIPS Pending Closed
OVERALL STRATEGY Phase 1 Phase 2 Phase 3 Higher Margins Recurring Revenues Greater Visibility
SEGMENTATION OF BUSINESS 5 Business Segments
FINANCIALS Revenues Organic Growth (% of Revenues) CAGR: 97% 79% 93% 89% Organic Acquired • Notes: • Figures in USD millions • 2004 : Child Van Wagoner & Bradshaw, PLLC | 2005 - 2007: GHP Horwath
FINANCIALS Gross Profits Net Income CAGR: 76% Net Income (Adjusted) CAGR: 77% Net Income (Adjusted) Net Income (USGAAP) Adjusted EPS USGAAP EPS $0.34 $0.35 $0.39 $0.41 $0.86 $0.89 $1.20 $0.91 $0.11 $0.32 • Notes: • Figures in USD millions • 2004 : Child Van Wagoner & Bradshaw, PLLC | 2005 - 2007: GHP Horwath
FINANCIALS Balance Sheet Highlights Q1, 2008 Financial Highlights (YoY) FY 2006 FY 2007 Q1, 2008 Revenues increased 87% USDMM Key Balance Sheet Items • From $38.4M to $71.8M Gross Profits Increased 120% Cash and cash equivalents $31.0 $89.1 $77.1 • From $10.1M to $22.3M Working Capital • From 26.3% to 31.0% of revenues $63.5 $159.7 $165.8 Income from Operations Increased 72.4% Total Assets $114.4 $377.4 $395.8 • From $6.5M to $$11.1M Total Liabilities $24.5 $177.6 $177.8 Adjusted Net Income increased 103%* • From $6.76M to $13.7M * NB: Adjusted for non-cash expenses such as D&A, EIP and the redemption accretion on the convertible notes
FINANCIAL GUIDANCE FY 2008 Q2, 2008 USDMM Key Financials Guidance Revenues $380 - $400 $85 - $87 Adjusted Net Income $70 - $76 $15.9 - $16.5 Adjusted EPS* $1.59 - $1.76 $0.36 - $0.38 * NB : Cash earnings
KEY PERSONEL Key Management Team • Successful entrepreneur with proven track record • Founder and major shareholder Mr. GuoshenTu Chief Executive Officer • CFO since January 2007, Director since March 2006 & Vice Chairman since May 2006 • Previously held key management positions in other multi-national companies Mr. Terence Yap Chief Financial Officer • Founder of Tsingvision Intelligence System Co. Ltd • Senior Engineer of CETC Institute 52 Mr. DaiyouQian Chief Operating Officer • More than 15 years experience in China banking industry • Audit and regulatory compliance Mr. ZongxinXie Chief Audit Executive • Member of Wuhan University Academic Association • PhD from Central China Scientific Technology University Dr. RuiminHu Head of R&D Independent Board of Directors • Chairman of Audit Committee • Previously served as the Snr Managing Partner of Arthur Anderson South China • Significant board experience with other leading companies in Asia Mr. Peter Mak Independent Director • Chairman of Corporate Governance and Nominating Committee • Served in several high level positions within China’s Ministry of Public Security • More than 40 years experience in China’s security industry Mr. Runshen Li Independent Director • Chairman of Compensation Committee • Over 30 years experience in the security and communication solutions field. Mr. Robert Shiver Independent Director