Go Sportz Investment Teaser April 2015 Bangalore

High-end Squash flooring – Haro Flooring

Business Summary Rehan Abdul Rauf Sumar, the promoter of the business, aged 45 years has been running the business of sports flooring and other sports infra since 2007 He is son of Dr Abdul Rauf Suleman Sumar, MBBS, a very highly respected social worker in Mumbai who has been the President of Cutchi Memon Jamaat for about 20 years and currently is the President of the Muslim Ambulance Society. Business has exclusive arrangements with ASB Squash (Germany/Czech), Descol (Netherlands), Sports Coatings (UK), Lano Sports (Belgium), Hamberger Flooring (Germany), Parker Seating (Malaysia) among others The main strength in the business is the ability to get references. Business has built a strong reputation across the country over the past 8 years counting All India Tennis Association (Maharashtra), State Lawn Tennis Association and Indian Squash Academy as some of their clients ensuring constant flow of references. Sales in FY-15 were about Rs. 6 crore and net profit was around Rs. 35 lakh.

Deal Structure Investment will go into an LLP whose business will be limited to importing and trading in the high end squash flooring material Joint A/C (with RFC CEO as the joint signatory) to ensure 100% transparency and control on the use of funds Investment requirement – Rs. 25 lakh for working capital financing of the high end squash flooring material (Hamberger flooring of Haro brand) Investment tenure – 2 years Expected annual return of 34% Expected Monthly Payment – Rs. 2,800 for every 1 lakh invested Note – The above monthly payments are expected numbers and the actual amount will depend on the performance of the business. Also, in the unlikely event of a business loss, it will be shared in the ratio of investment.

Product Summary Gosportz has the exclusive rights to sell the Haro flooring material (a German company product) for the squash courts in India Website link for Product details Practically, no competition in terms of high end flooring in India 5-6 competitors who work on a National level like him but sell the lower range products mostly, since it is easier to sell High market potential: More than 500 squash courts in India Nearly 400 of them have old flooring which are potential guys to convert to new flooring This is apart from all the new flooring orders expected from the new construction activities Currency risk: Payments for purchases are made in advance and the sales are completed within a short span of 4 months of the payment ensuring lower exposure to the Euro currency fluctuations. If the purchase price increases due to stronger Euro and stays so, the business is able to pass on the higher cost without affecting the profit margins. Main currency risk is if the Euro suddenly becomes very weak within the 4 months after payment, but higher gross profit margin of 27% implies that the probability of loss is almost negligible. Late payment risk: 25% of the payment by the end client is made prior to the purchase while about 50% payment is made on delivery Remaining 25% payment is made after installation (which takes a week’’s time) – here is the risk of delay where it may get extended to a month. We have assumed only 2.3 containers in a year which implies that the returns will be realized on about 9.25 months. Even if there is a 1 month delay on each container (which is very unlikely), the target number is still achieved.

Financial Summary Promoter expects to do Haro flooring for floors this year – we have taken a conservative number of 18 courts in our estimate Business already has orders for Haro flooring for 5 courts which could further reduce the turnaround time and increase the turnover EUR/INR exchange rate has been taken as 70 while the prevailing rate is around 68 leading to higher margins than what is stated Selling price used in the model is a slightly conservative estimate.

Investment Score CriterionScore Promoter Background4.5 Business Profitability4.5 Business Cash Flow Consistency4 Financial Security of promoter4 Upside probability in returns4 Expected returns4.5 Social impact rating3.5 Overall investment rating – Very Poor2 – Poor3 – Average4 – Good5 – Excellent

Appendix

Methodology for selection of investors Investors will be given 3 days to express their interest in a particular deal after the teaser is shared with them. After this time, in the interest of transparency, all the ones who have shown interest will be sent an about the total commitments received and the ones who were selected to invest and the reasons for the particular choice. Following will be the criteria which will be used to select the final investors: First criterion – Investors with the highest commitments will be given allocations first. Second criterion – Investors whose amount invested till date is lower will be given priority if the commitments are the same, to allow newer investors to invest. Third criterion – If the amounts committed and the total investments till date are the same, investors who communicated their interest to invest in the particular deal earlier will be given priority.

Loan agreement & other documents Following are the documents to be prepared at the time of the deal execution: Loan agreement between the promoter and the investor on a Rs. 100 stamp paper MoU between investor and RFC MoU between business promoter and RFC A draft of the first two documents will be ed to the investors before the deal is executed. All the above three documents for all the deals executed in a particular month will be prepared (in hard copy) and delivered to the relevant parties (through courier or in person) by the 7 th of the subsequent month. Investors will get the original copies of the loan agreement after having it signed by the promoter and the MoU with RFC after having it signed by the authorized signatory of RFC. They are expected to counter-sign both the documents and give the original copies back to RFC so that RFC can keep the custody of all the original documents. If, however, they wish to keep the originals with themselves, they are required to submit a copy of the fully signed documents to RFC. We encourage the investors to choose the earlier option to avoid having the originals mis-placed.

RFC Fees RFC will charge 1.5% of the deal amount as deal execution fees from the investors at the time of deal execution. Apart from this, RFC will be charge deal monitoring fees equal to 5% of the investor’s monthly/quarterly/annual profit payments until the deal expires. The periodic profits payments for the investment will be disbursed to the investors after deducting the monitoring fees every time. If the investors choose to renew the agreement after it is lapsed, the investor will not be charged any extra initial fees. However, the RFC’s share of 5% from the investor’s periodic profits will continue.

Mode of payment After sharing a draft of the agreement and MoUs with the investor and after sharing the bank account details of the business promoter, the investor will be requested to proceed with the payment of the investment amount and RFC deal execution fees. The investor can make payment for the investment amount in one of two ways – deliver A/C payee cheque in the name of the business promoter for the investment amount or make a direct bank transfer to the promoter’s bank account. The investors will be required to make the payments within 7 days of getting the draft agreements after which they will be sent an confirming if the amount has been received by the business promoter. RFC deal execution fees can also be paid by the investor in two ways – send a cheque in favour of ‘Rehbar Fin Consultants Pvt Ltd’ (Note that it is Fin and not Financial) or preferably make a direct bank transfer to the following bank account: Rehbar Fin Consultants Pvt. Ltd. Current Account # IndusInd Bank Sadashivnagar, Bangalore Branch IFSC Code: INDB

Profit Sharing Ratio The profit sharing ratio for the investment will be decided and agreed with the two parties at the time of the deal execution. This may vary during the tenure of the investment due to the following reasons: Profit re-invested by the promoter: In this case, the profit sharing ratio of the investor would decrease in congruence with the fact that the share of the total capital contribution in the business for the investor has decreased. Formula to calculate the revised profit sharing ratio will be as follows – Investor’s contribution divided by the new post-money valuation of the business where post-money valuation of the business equals to the sum of its former value and the profit re-invested by the promoter. Business capital withdrawal by the promoter: In this case, the profit sharing ratio of the investor would increase in congruence with the fact that the share of the total contribution in the business for the investor has increased. Formula to calculate the revised profit sharing ratio will be the same as the earlier case except that the amount withdrawn will be subtracted where the profit re-invested was added. Principal repayment to the investor: The profit sharing ratio will decrease and will be calculated using a formula similar to the ones used in the above cases. New round of investment: The profit sharing ratio for all the investors will be modified at every new round of investment. The new profit sharing ratio will be calculated based on the revised financial projections of the company after getting the new investment. However, one constraint which will be strictly followed while calculating the new profit ratio is that the investor’s expected return on investment after the new round of investment will not be lower than the one which was indicated in the earlier round of investment.

Monthly Profit Sharing Majority of the deals which are executed through RFC are based on a monthly profit sharing model. The RFC team will monitor the monthly performance of all the businesses in which the deals were executed and calculate the profit share of the investors every month. RFC will intimate the investors about their monthly profits for the month and deliver the profit amounts along with principal repayment (if any) either by depositing the amount directly in the investor’s bank account or by handing the amount to him in person. RFC will collect all the monthly payments from the business promoters in the form of A/C payee cheques in the name of the respective investors unless there is a strong reason to make an exception. All the cheques representing the monthly profit payments of the investors will be deposited in their respective bank accounts by the 15 th of every month, insha Allah.

Grace Period The promoter will be given a grace period of upto 45 days (maximum) to allow him to deploy the funds in his business and start generating profits from it. During this grace period, the promoter will not be obliged to share the profits with the investors. The grace period for a deal will be based on the circumstances of the particular business and the operational convenience (typically we would like to start the profit calculation from the 1 st of a particular month instead of an odd date) and will be at the sole discretion of RFC, of course restricted to a maximum of 45 days.

About RFC

Rehbar Financial Consultants Our Mission – To enhance Sharia-compliant value creation for businesses and investors while bringing them together Our Approach – To utilize the best practices from the finance industry and leverage expertise and resources from across our network to create greater value for our stakeholders Our Strength – A professional team with over 100 years of experience in diverse industries like IT, Manufacturing, Banking, Private Equity and Asset Management

RFC’s Success so far… Analyzed and studied about 200 deals so far across all industries and sectors Successfully executed 49 deals with a total deal value of Rs. 3.3 crore Average return on investment realized across all the deals executed so far is 27.9%

Disclaimer We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it relates to current and historical information to the best of our efforts. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time. Prospective investors are cautioned that any forward looking statement are not predictions and are subject to change. Recipients of this material are requested to use their own discretion before making the final investment. For more information, contact Mr. Mudassar Baig, CEO, Rehbar Financial Consultants Mobile: Website –