goldstar (tm) operating principles, ethics, terms, etc

The GoldStar Group

2014 This Document is a summary of our Operating Principles, Company

Culture, how we operate as a team, sectors we operate in, Procedures,

Projects Executed and Terms

Financing

Division

TM

The GoldStar TM Group Financing Division, Mumbai 2014.2014

INDEX

Section Topic Page No.

1.0 Introduction GoldStar Philosophy of Financing 1

2.0 Principles of Finance 2

3.0 The Right team and Associations 5

3.1 Functioning of the Organization 6

4.0 Sectors of Finance 7

5.0 Financial Products at GoldStar 8

6.0 Sources of Finance 11

7.0 Why GoldStar for your finances 12

7.1 Having the Right Resource & Knowing what is right 13

7.2 Optimal finance and Ill effects of wrong Non Optimal finance 13

8.0 Procedure for Finance 15

8.1 Agenda for Meetings 15

9.0 Projects Executed 17

10.0 Schedule of tentative terms 19

10.1 Other Types of Finance 20

11.0 Contact us 21

The GoldStar TM Group Financing Division, Mumbai 2014. Page 1

1.0 Introduction & GoldStar Philosophy of Financing

We, at GoldStar follow the traits of Arthashastra and Relationship based financing which encourages

Developments, Partnerships and Growth of all. We work on the principle of win win situation wherein the

client, the financer, the media everyone grows together. We are not in the knack of self earning as this would

amount to a short sighted approach, against our principles and is detrimental to the growth of everyone.

As one would appreciate, finance is something that shapes your future. Finance at the right time is considered as

the largest bliss in the practical scenario. Companies, Corporates and all individuals base their life on this

resource. Having said that, there are principles need to be adhered to with strict discipline. One may find finance

from various sources but the basic difference is the principles on which this finance is sought with optimity. One

may terribly wander off course should one procure finance from a wrong choice and non optimal resource.

Every project is different in nature requires a different approach and expertise in respective fields. We have

identified and developed resources for every type of project. One resource of finance might not be applicable to

all types of industries. Hence it is very important for us to know where to apply what and that is our job that is

where our importance kicks in.

We treat every project of yours as our own and push our resources for your gain. Our on board panel takes every

project under consideration and acts in a timely responsive manner advising you at every step. We give you

timely quotes and different scenarios and do not treat your baby as a money making machine. Its when you

grow, we grow

We have pursued International as well as National assignments in sectors of Real Estate, Healthcare, Industries

(Pharma, Chemical, etc), Schooling, Education, Legitimate fund parking, Luxury and Resorts, Hotels, Multi

Brand facilities, Management, International Import Export Finance, High volume BG and LC's.

We take great pride in the professional quality of our work achieved by uncompromising determination to

achieve excellence in each and all of our projects. Our purpose is to offer quality projects that will exceed the

expectations of our clients. We operate with the highest level of integrity and provide a rewarding quality of fair

return for all connected.


2.0 Principles of Finance

At GoldStar, we follow these empirical Principles of Finance. These have been formed from our

experience and are key elements of our successful Business Model. We have made successful projects

following these below.

a. Commitment Both Ways:

This is the first and a key principle in finance. Commitment towards the project from the Client

as well as our end is of topmost priority.

Commitment is exhibited by the client in terms of provision of accurate, honest and transparent

information. This information is in the form of:

i. Meetings with key personnel viz. Promoter, Chartered Account/Chief Financial

Officer/Company Secretary.

ii. Provision of updated, Documentation of lands, valuations, permissions, IT returns, our

forms, formats, etc as per our standard checklists on time as and when required.

iii. Signing our Non Disclosure Agreements, Fee Protection Agreements and other formats

deemed Professionally necessary. Honoring the same in every respect.

iv. Keeping a track of the project progress and attending meetings as and when required.

It is of great importance that we have your updated correct information (doesn’t matter even if

it is truthfully negative) to advise you and pave the path towards the success of the project.

Commitment is exhibited from our side in the form of:

i. Understanding your exact requirement with respect to meetings and documents at your

end.

ii. Correctly synthesizing the documents provided by you and deriving your key aspects.

iii. Advising on an derived optimal solution.

iv. Providing a clear and transparent quote in terms of processing fees and service charges.

v. Adhering to the deadlines and communicating any delays to you if they occur.


b. Confidentiality:

This is an important cornerstone in the financial journey. Confidentiality is of prime

importance at all ends. Taking a loan or seeking a Joint venture is not an untoward thing to do,

but for that information with names to leak out in the open into the market is not desirable for

any promoter due the following reasons:

i. The knowledge of such information discounts his capability to perform himself

financially in the market. If one has the knowledge that a particular promoter has taken

an “x” sum of loan, the market exactly knows that this promoter needs his part of the

project sold in an “y” amount of time; if not, he/she would incur losses on the

repayments. In this knowledge of facts out in the open, the market will try to leverage

this as a bargaining point resulting in the loss of profitability to the promoter.

ii. This also affects his long term prospects of the promoter where the market develops a

habit of aggressive negotiations with him.

iii. The knowledge of a particular project in the market could spark unwanted competition

from competitors and the promoter may loose the edge on this project.

iv. Business advantage may be taken by such competitors by floating your idea in the

market before you leaving the promoter high and dry, having lost all zeal in the project.

v. To avoid attention from unwanted quarters.

Hence Confidentiality at all ends needs to be maintained and more so to protect the interest of

the promoter.

c. Veracity:

This is a very important aspect of financing. This principle needs to be followed for the success

of any project. This clearly means, the right representation of facts, figures (existing and

projected), documents, cashflows, business plans, previous defaults at any and all levels on the

financial front of company, Promoters, etc, Cibil status and all other sought information. This

information from you forms our eyes and ears and the navigation tools for the successful

journey of a project. Any wrong information on this front will render a thorough waste of time

at all ends and will demean all efforts; this is highly not desired.


d. Time:

It is said that “Time is money”, we actually follow it in letter and spirit and value time more

than money. The time of all should be spent in an optimally efficient manner so that we all

attain our respective goals. We work in a timely manner, the promoter provides documents in a

timely manner, the promoter gets the desired funds in a timely manner. All of these times help

us progress in life and should be strictly followed.

e. Transparency:

This needs to be maintained between the promoter and us. This amounts to transparency in

terms of facts and figures, documentation, etc. Without this aspect, the project would hit

several hurdles giving up on all the principles above.

f. Trust:

This is a supreme principle. Trust should be kept at all ends but blind trust is uninvited. All

facts and figures should be supported with proper documentary evidence as that is what will

give out the end result.


3.0 The Right team and Associations

A successful project is all about teamwork. No project can be done alone. We, at GoldStar have a

dedicated and experienced staff well equipped to study, organize, arrange, advise, mitigate problems,

take the uncertainties of your projects. These range from some leading veteran ex bankers from Banks

as well as NBFC’s to midlevel professionals to startup professionals to trainees. The organizational

structure for a typical project would be:

Chief Project Manager

Project Manager I Project Manager II

Financing entity

Banks, NBFC, Government,

Private

Board at GoldStar

Team Leader I Team Leader II Team Leader III Team Leader IV

Staff in the Field/office for data entry, filing,

collection of documents, other miscellaneous work

Accounts

Client/Project


3.1 Functioning of the Organization

1. The ground chain forms our ground staff that does simple data assimilation and entry jobs, field

visits, collection of documents and other miscellaneous works.

2. All this information on projects is sought by the team leaders from the ground chain.

3. The Team leaders then filter, organize this information and pass them to the Project Managers.

4. The Project Managers then prepare reports based on the inputs given by the Team leaders and

have a detailed discussion with the Chief Project Manager.

5. The Chief Project Manager then takes complete control of the project, seeks more information,

inputs from Project Managers and after his thorough satisfaction, feeds it to the GoldStar Board

as well as the Accounts Department at GoldStar.

6. The Board at GoldStar then has a weekly meeting to consider all projects put up by the Chief

Project Manager and the accounts department.

7. Very high levels of filtration are applied to filter out and strategize for the project.

8. Based on the merits of the project, the project is assigned to the appropriate resource only from

the Banking, NBFC, Government or Private Domain.

The above system is followed diligently for the successful completion of the project.


4.0 Sectors of Finance:

At GoldStar, we facilitate Debt Financing as well as Equity partnerships, Joint ventures and a

combination of Debt and equity finance for most of the sectors on an National as well as International

level as below:

1. Real Estate

2. Infrastructure

3. Villas

4. Townships

5. Industrial Parks

6. Pharmaceutical

7. Chemical

8. Hotels & Luxury, Spa, Resorts

9. Infotainment

10. IT Sector

11. Electrical

12. Mechanical

13. Equipment

14. Manufacturing

15. Import & Export

16. Trade

17. Commodities

18. Finance

19. Bonds

20. Cement Plants

21. RMC Plants

22. Vehicle Based (as Mortgage)

23. Paper Industries

24. Solar Projects

25. Hydropower Projects

26. Mills


5.0 Financial Products at GoldStar:

At GoldStar, we have different financial products namely:

a. Project Finance:

In this product, the basis for finance would be the Project as the prime. This is a more thorough

type of financing requiring the financial parameters as well as the project to be well planned,

coordinated, clear with rating agencies, permissions, acquisitions, policies, land, etc. This type

of resource is generally the one with the most economical for the client in terms of Rate of

Interest, but requires all the parameters in place which, few projects get through. Time taken is

the maximum for this product as compared to others and disbursement is in stages and

monitored. This product can be operated by us at a Global Level. Banks, NBFC’s, Private

finance, all are applicable at varying rates as described in further sections. There is no limit to

our resources, nor any upper ceiling of amount in this product.

b. Loan Against Property:

This is a more flexible type of product where the property is considered as the governing factor

for obtaining finance. The emphasis is given to the Property, its valuation, NOC’s from all

owners and title clearance. This product does not mandatorily require a specific project to be in

place. The regulations required for this product are limited and it fits well into all industries.

Approvals are far quicker and Interest rates are nominal, disbursement may be in stages or one

time settlement. This product can be operated by us at a Global Level. Less of Banks and more

of NBFC’s, Private finance, all are applicable at varying rates as described in further sections.

There is no limit to our resources, nor any upper ceiling of amount in this product.

c. Combination of Project Finance and Loan Against Property:

This is a derived product at GoldStar where part of the project is treated under Project Finance

and Part under Loan Against Property. The terms of this products are varying and depend on

the merits of the project, land valuation, etc. Less of Banks and more of NBFC’s, Private

finance, all are applicable at varying rates as described in further sections. There is no limit to

our resources, nor any upper ceiling of amount in this product.


d. Pure Property Based, collateral Finance/Personal Finance:

This product does not depend on any project but purely on collaterals in the form of Lock and

Key flats, premises with Occupation certificates, clear titles, etc. Non cibil cleared Promoters

are encouraged towards this product. There is no limit to our resources, nor any upper ceiling

of amount in this product. This is an immediate type of finance which can render you the

money required by you almost immediately. There are subdivisions in this product as under:

i. Secured from Banks/Mortgage Finance:

This sub product is secured type of finance sought from Banks where the

security is kept with the banks under strict regulations and the finance is

obtained. This is a less favorite type of finance as most promoters prefer the

unsecured route to keep things off the balance sheet. There is no limit to our

resources, nor any upper ceiling of amount in this product.

ii. Unsecured from Banks:

This product depends more on your previous track record of payments, previous

cashflows, maintenance of balance in the accounts, profit registration by your

company, IT returns, Stable Balance sheets, etc. The maximum ceiling for this

product us Rs. 5 crore per qualifying company.

iii. Unsecured from Private Resources:

This product depends more on your previous track record of payments, previous

cashflows, maintenance of balance in the accounts, profit registration by your

company, IT returns, Stable Balance sheets, etc. The maximum ceiling for this

product is Rs. 20 Lakhs per qualifying individual.

iv. Secured with Private Resources:

This product purely relies on security provided by the individual, Company.

This product renders immediate finance. This requires the property and titles to

be clear and ready to be mortgaged. The securities accepted are generally Lock

and Key clear title flats with Occupation certificates, registered vehicles,

machines viz personal vehicles, JCB’s Poclains, Dumpers, Trucks, etc There is

no upper limit for this product.


e. Non Performing Assets (NPA):

There are Companies that turn into Non Performing Assets either by wrong advice, difficult

markets, economy, etc. At GoldStar, we have the means and resources to revive the NPA

amount plus give you working capital to keep your operations alive. The work on these types of

projects is huge but, it is our firm resolve to help you and get you out of the unfortunate

situation.


6.0 Sources of Finance:

There are different sources of Finance in the armory of GoldStar. We have established profound

working relations with all the resources a below:

The sources of finances are as below:

1. Banks

2. Non Banking Financial Companies (NBFC)

3. Government resources

4. Private Sources

5. Foreign funds from Singapore, Mauritius and other International Destinations.

6. Foreign Direct Investments (FDI)

7. External Commercial Borrowings (ECB)

8. The World Bank (WB)

9. International Finance Corporation (IFC)

10. International Monetary Funds (IMF)

11. Other Missionaries all over the world.


7.0 Why GoldStar for your Finances:

Finance always takes place on three things relationships, relationships and relationships.

The main reasons and why we have an edge on most is due to our basic operating principles, our

company culture, our relationships and our undisputed determination to strive very hard for your

project. The entire machinery at GoldStar stands with best of their knowledge, skillsets firm and

grounded for your project. We have a sound team, excellent coordination (as demonstrated in our

previous sections) in all quarters of the world. We stand to deliver with discipline, advise you in the

best possible manner and move ahead in a timely manner. Our team advises you on your balance

sheets, restructures it if required, specifically advises you how to accommodate the incoming finance

so that only the required taxes and duties are paid; this is a basic right of yours and you should get it.

We have been in the Construction industry for over 35 years and hence have a firm grip on projects.

Financing is a Science and mere knowledge of existence resources is not enough (as this is

commonplace knowledge). The key lies in understanding your requirements, applying our knowledge,

teamwork, relationships and experience to the project and deriving an Optimum resource for you. As

one would appreciate, maximum projects fall in the domain of Private resources. Access to Private

resources at Local, Domestic and International levels in India as well as in different parts of the world

is the forte of GoldStar.

The word “Optimum” defines the capability of a Finance Company. “Optimum” means to derive a

solution which just satisfies your requirement in a way which suits you best at the best Rate of interest,

Best of processing fees and the best of service fees. Extremely few Finance Companies have the grip

to give you an optimal solution. If this is not given to you, the effects are disastrous to the companies

at times. Incorrect interpretation of financial parameters and assigning of wrong non optimal resource

can result in a promoter paying wrong interest rates over the years, paying excess taxes, excess fees,

etc. With an average loan period of 5 to 10 years, even an extra percent would result in the loss of

crores of rupees to the promoter, loss of market credibility, etc. Moreover if the promoter is not able to

pay off the interest on time, they could turn to Non Performing Assets thus capsizing the entire firm,

the promoters, stakeholders, everyone connected . It could practically ruin a Company. The jargon of

responsibility on our shoulders is huge and we have been managing it consistently over the years!

Hence GoldStar Financing.


7.1 Having the Right Resource & Knowing what is right:

Having resources and that too the right ones is the true mark of a Finance Company. Further, having

the right resources and knowing how and where is apply them is further fineness in the job. The true

purpose of finance to a promoter will be satisfied only when the Financial resource assigned to him is

sustainable to be him with regards to future growth, financial rations, repayments, etc.

7.2 Optimal finance and Ill effects of wrong Non Optimal finance

As explained in the previous sections, for the welfare of the Promoter, finance should always be

provided and sought for at Optimal terms. This results in the following of the intended growth of the

Company, the promoter, the stakeholders and all individuals connected to the project.

Below is A Bone Chilling real life story where a Blossoming Business was shot down with catastropic

failure by ill advice for procurement of finance. A big wake up call.

This is a true story

This is with respect to a recent NPA project awarded to us recently. A particular firm from India (well

known) had a clean (with no defaults) heafty balance sheet in a seeds business. Over the years, their

business grew manifold bringing great prosperity all over. After a few years of successful operation, they

decided to go for a small refinery so that they could make their own oil and grow their business. This is

when the devil rang a bell.

They approached a particular finance company to render them finance for their expansion. Without any

caution, without any tentative terms, without any paperwork, without having done due diligence on the

company, they mandated this finance company. Initially, the company did a sweet talk and gave them big

assurances (all verbal) that their work would be done on most professional terms possible and that they

would be given their requisite amount of loan within 90 days. They gleefully agreed without confirming the

terms. The finance company did tough paperwork to ensure that they would be able to take advantage of

these innocent souls. Initially this company had no resources and they outsourced it to a company. The new

company first led them to a bank promising sanction. The bank approved the loan.They mortgaged all their

land, property, assets into this loan. Now, the firm wanted an enhanced santion so this new finance

company led them to an nbfc. This nbfc promised them sanction on the condition that they bring a 90 day

letter from the bank saying that they no longer wished to avail their facility and would take over the loan

(Again, no terms were given). The firm got this letter and the nbfc transferred and mortgaged all their


assets. After mortgaging, the nbfc gave them the terms of a whopping interest rate of 36% per annum,

exorbitant unheard of processing fees and equally inflated service charge (without any npa, defaults, profit

balance sheet, worst in history). As a result of this, the companies finances, production, plant nose dived.

They were unable to pay this 36%. On top of that the nbfc complused them to pay DAILY interest by 10

am everyday.

This caused a catastrophic failure of the company. As they did not pay the interests, the company ran into

an NPA, shutdown of their plant, employees removed, personal life destroyed, promoter suffered a stroke,

all turned into a big zero. A perfectly well functioning completely sound company went into an NPA.

We are now reviving this company and will use our length and breadth to salvage them. This is a living

example of how important we are, how important the right advice and right resources are. Always be very

very cautious when you select a finance company.


8.0 Procedure for Finance:

1. Concall with the promoter to get a general idea of the project and determine if prima facie

workable.

2. Receipt of Letter of Intent, Advisory fees (one time non refundable, all other fees after

disbursement), Information memorandum as a hard Copy Parallel with a soft copy as an

email sent to our office address.

3. Communication of tentative terms for ROI, term of loan and fees.

4. Signing of NDA, FPA (Fee Protection Agreement/Memorandum) to protect interest of all

connected people followed by courier of hard Copy Parallel with a soft copy as an email sent

to our office address.

5. Meeting with the financing entity and submission of detailed documentation as per checklist.

6. Initial perusal, Site Visits, Initial due diligence, meetings with Promoter, CA/CFO/Company

Secretary of the concerned firm.

7. Due diligence as deemed by the financing entity.

8. Communication of final terms viz. ROI, term of loan.

9. Setting of deadlines for disbursal.

10. Disbursal in stages or one time as mutually convenient.

8.1 Meeting agenda with the financing entity:

a. Understanding the promoters, their background, experience.

b. Understanding the past projects of the group.

c. Understanding the past and current banking facilities.

d. Understanding the project(s) in hand and the ones under consideration with respect to

construction area, prevailing rates, valuations (book value and market value),

construction cost, ratios derived and required.

e. Discussion of previous and current Balance sheets.

f. Advising on these balance sheets and the projected ones to comfortably accommodate

the incoming finance.


g. General procedures, processing times for finance.

h. Advising on ideal parameters required to optimize the interest rate (ROI) thus

benefiting the client.

i. Discussion on the first layer of site visits to be conducted after the meeting.

j. Booking of proposal for finance if things are comfortable.

k. Other information and interactive discussion.


9.0 Projects Executed:

We, at Goldstar have executed projects in the Local, Domestic, National and International levels in a

variety of industries as enumerated before.

Confidentiality as mentioned before is at its pinnacle for the client, hence no names would be given out

but an overview of the projects done by us is as below (One per type is listed):

Category Nature of Project Geographic

Location

Industry Description

1. Loan Against

Property (LAP)

Mumbai

(Local)/South/North

India

Real Estate These category of projects were

done for local builders in Mumbai

with the Secured finance against

lock and key flats and other

means.

2. Unsecured Finance Mumbai Personal Unsecured finance was provided

to individuals/companies under

this category.

2. Debt Finance Mumbai (Outskirts) Resort This project was done for a resort

on the outskirts of Mumbai.

3. Joint Venture (JV) Mumbai Real Estate These category of projects were

done as JV for SRA (Slum

rehabilitation Authority),

Redevelopment Schemes by us

between two or more entities.

4. Project Finance Mumbai/North/South

India

Hotel Industry Leading chains of Hotels were

financed.

5. Project Finance/LAP

Combination

South India University Many universities were financed

with a combination of LAP and

Project Finance.

6. Project Finance North/South /Central

India

Hospitals Hospitals at locations as indicated

were financed as pure project

finance


7. Project

Finance/LAP/NPA

North India Mill A paper mill that had run into an

NPA was revived with a working

capital.

8. NPA North India Oil and Seeds This was a distressed company

into oil and seeds business.

9. Project Finance United

States/Honduras/New

Zealand

Hotel/Tourism Prominent chain of Hotels wanted

to set up a hotels, we helped

finance at very good rates at

flexible terms

10. Project Finance/JV US/Europe Townships Major companies of locations

wanted to set up townships. We

helped finance through our

resources at good terms

11. Debt Finance South India Power project We helped them setup Solar

power plant at 2 locations

The above projects are a category which refer to sectors where we have worked and NOT the total

number of projects.


10.0 Schedule of Tentative Terms

The below mentioned are the formats of finance projects that we do and have a thumping

impression in the market. Once successfully admitted, these proposals generally do not fail

from our side but only fail from the other end due to constraints in the project. We do not

work with long chains.

Processing fees (%)

GoldStar only. Respective

Financial Entity fee may be

seperate

Sr.No. Resource ROI (%) Per annum Service Charge (%)

1. Bank 11.5 to 16 1 2 +

2. NBFC 12 to 24 1 4+

3. Private 8 to 12 1.5 5+

4. NPA 12 and above 2 5+

Above terms are tentative and will/may change as per project

� Sharing of Service charge for Consultants shall be equal among the team.

� Non Performing Assets: NPA projects are done by us with an initial perusal fee of Rs.

15,000. One time settlement possible. Many more options available.

� Time frame is 30 to 45 business days for above.


11.0 Other types of finance

Processing fees (%)

Sr.No. Resource ROI (%) Service Charge (%)

1. Private (Secured) 1.5 to 3.5/month

(Immediate Money) 1.5 4+

2. Bank (Unsecured) 10 over the year 1 2+

Private

3. 1 to 3/month 1 3+

(Unsecured)

� Immediate finance : Flats as collaterals whose Occupation Certificate (OC) has arrived

Minimum lockin period is 3 months with one month interest in advance.

� Unsecured finance Banks: upto 5 Cr

� Unsecured private finance: upto 10 lakhs

� Vehicle as mortgage sanction amount 50 to 60% of Valuation.


12.0 Contact Us

We can be contacted on the below mentioned coordinates:

The GoldStar Group,

C1, Vibha CHS,

Ramchandra Lane,

Malad West.

Mumbai – 400064.

Maharashtra.

India.

Contacts:

Phone (Telefax):

International from Phone +912228822589, International from any Phone 011 91 2228822589

Domestic: 022 28822589

Cell Phone: +918108190382

Emails: [email protected], [email protected] [email protected]

goldstar (tm) operating principles, ethics, terms, etc

Documents