Business Plan Intelligent Automated Parking - An Intelligent Carpark Management Initiative

Objectives  Industry Specialist  Target sales of $10 million in ten years’ time and 30-40% in gross margins  Local market share in first 5 years  Regional and global markets beyond 5 years

The Product: The Product: Intelligent Automated Parking  Sophisticated Carpark Management Systems  more convenient payment mechanism  novel traffic layout  Advanced Electronic Road Pricing (ERP) Technology  Dedicated Short Range Communications (DSRC) System  Patent proprietary expertise and model

The IAP Process Central Management Station Vehicle Exit Entrance Centralised Station Mounted Camera Optical Sensor Detector Gantry Proximity Reader Barrier Vehicle

Competitive Advantages  Customized carpark management system catered to needs of specific customers  Clearly defined target market  Value for money proposition: - assurance of quality of IAP technology - excellence in provision of after-sales service Critical Success Factors:

Competitive Advantages  Highly probable positive feedback of IAP system from motorists due to: - convenience & time-saving - widely accepted existing technology of ERP gantry system  added incentive to carpark owners to implement system

Industry Analysis  Commercial carparks - 150,000 lots - $150 million potential revenue  View to expand into public carparks - over 600,000 lots - $400 million potential revenue  Industry Participants: - Carpark operators, government bodies, engineering companies and IT solutions providers

Main Competitors  Stratech Systems - SmartPark  ST Electronics – Autoparc ST 8300  Sanyo Trading Company  Siemens Advanced Engineering  CET Technologies

Market Analysis  Market Growth - Increase in car ownership - Current implementation of cashless parking  Market Segmentation - size and ownership - more justified in large-scale carparks

Marketing Strategy  Positioning Statement - market niche player  Pricing Strategy - cost-plus pricing strategy based on: (a) variable costs of IAP equipment (b) salaries of engineers (c) subcontracting costs - gross margin of 30%

Marketing Strategy  Promotion Strategy - minimal advertising expenditure - personalised selling of product  Marketing Program - printing of catalogues & brochures on IAP process - internet website, yellow pages - prototype modelling for demonstrations

Financial Matters (a) Required funding - S$1 million  Subscribe for 400,000 shares of $2.50 each or 40% stake  Uses of funds: - Develop IAP prototype - Purchase of fixed assets - Payment of engineers’ salaries - Payment of subcontracting costs - Purchase of IAP equipment supplies for contracts

Financial Matters (b) Breakeven Analysis  Expect to be in the black by end of 2nd year Year 1 Year 2 Year 3 Year 4 Year 5 Revenue352,000 1,055,000 1,427,000 1,666,000 2,150,000 Less: COGS246, , ,400 1,138,400 1,488,000 Operating expenses 229, , , , ,600 Profits/(Losses) before tax (121,000) 195, , , ,400 Profits/(Losses) after tax (121,000) 146, , , ,300 Retained profits/(Losses) b/f - (121,000) 25, , ,250 (121,000) 25, , , ,550 Less: Dividends - - (120,000) (240,000) (300,000) Retained profits/(Losses) c/f (121,000) 25, , , ,550

Financial Matters Sales & Profit Trends

Financial Matters (c) Ratio Analysis Operating ratios Average collection period (days) Net sales to total assets ratio Net sales to working capital ratio Year 1Year 2Year 3Year 4Year 5 Liquidity ratios Current ratio N/A Quick ratio N/A Profitability ratios Net profit margin(0.34) Return on equity(0.14) Return on total assets (0.14)

Financial Matters (d) Financial Returns Year 3 Year 4 Year 5 Year 6 Founders Share of dividends - 72, , ,000 Less: Cashout option - - (75,000) (100,000) Contribution to investors - (54,000) (42,000) (60,000) Investors Share of dividends - 48,000 86,400 84, ,000 42,000 60,000 Add: Contribution from founders - 54,000 42,000 60,000 Dividends from investment - 102, , ,000 Investment base 1,000, , ,000 Return (%) Cashout option: Founders’ share of dividends , ,000 Cash 100, , , , , , , ,000

Financial Matters (d) Financial Returns Year 3 Year 4 Year 5 Year 6 Share buyback (no. of shares)40,000 80, , ,000 Share capital composition: Founders 640, , , ,000 Investors 360, , ,000 50,000  By end of year 6, founders would have returned 87.5% (or $875,000) of investors’ monies equivalent to 350,000 shares.

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