INFORMATION TO BE COLLECTED FOR DUE DILIGENCE OF HOSPITALS:

As phase of consolidation in Health Sector is on rise, we will see more and more of M & A activities. Some of basic information one should gather while evaluating takeover of any hospital are:

General Information

• • Share capital of the Company (ies) and including:
    • The authorized, issued subscribed and paid up share capital, divided into classes, where relevant
    • The names and addresses of all the shareholders and beneficial owners of shares in the Co., together with details of the number and classes of share held and any nominee or trust arrangements
    • Details of any charges, liens or other encumbrances relating to the shares of Co.
    • Details of any right (whether exercisable now or in the future and whether contingent or not) to call for the allotment, issue, sale or transfer (including pre-emptive rights) of any share capital of Co.
  • Full names and addresses of the Auditors and the terms of their appointment
  • Details and copies of relevant company records, including MOA and AOA of Co.
  • Details of (all relevant documentation including any agreement or arrangements or understanding (whether legally binding or not) relating to:
    • The management of Co., including any fees or management fees payable to any person by Co.
    • The appointment or removal of directors
    • The ownership or transfer of ownership or the letting of any of the assets of Co.
    • The provision, supply or purchase of finance, goods, services or other facilities to or by Co.
  • All show cause notices and their replies, excise records like Customs, ED, Labor authorities etc., if any.
  • Copy of Form 2 for allotment of shares from time to time
  • description of the principal assets owned or used by Co.:
    Land
    • Details of properties giving address, description, approximate area, name and address of owner and details of any recent valuation. Copies of documents of title. Details of current possession and control of such properties.
    • Details of any claim against any property that is owned, occupied or used by Co.:
      • Details of any mortgage, lien, charge, lease, easement, trust, option, right to acquire or any other claim or encumbrance over the whole or any part of the undertaking, properties or assets belonging to Co
      • Details of any restrictive covenants or provisions, or legislation, rules or regulations, or orders, charges, restrictions, agreements, conditions or other matters, which precludes the use of any of the properties for the purpose for which the properties are now used.
      • Details of all necessary licenses and consents relating to the use and occupation of the properties have been obtained

Machinery /apparatus

• • Details of material items i.e. machinery owned or used or possessed by Co., with specific reference to the machineries identified in the term sheet.
  • Details and copies of any material equipment leases or rental agreements

Financing/liabilities

• • • • Details of any outstanding liabilities (including contingent liabilities)
        • List and schedule of loans taken by the Companies including loans taken from financial institutions, banks, foreign currency loans, external commercial borrowings etc. or any other form of debt financing availed of by Co., particularly in relation to its business or otherwise
        • Copies of the loan agreements or other relevant documentation for the debt facilities.
        • Details of any pledge of the shares of Co., with copies of such documents.
        • Details of any defaults in repayment of loans by Co., if any.

Contractual arrangements

• Details of all the contracts (including out sourced activities) entered by Co.
• Details of contingent liabilities arising out of contracts.

Employers and employee benefits and Management

• • • • • Details and specimen copies of contracts of service between Co. & its employees, a list of employees, their remuneration and the benefits available to them.
        • Details of any confidentiality agreements/bonds executed with any of the employees, whether full time, part time or on retainer.
        • Details of any current threatened or pending disputes and of any disputes.

Insurance

• Details of all insurance maintained under the insurance policies in respect of Business or assets and the date of expiry of insurance policies.
• Details of denials of any premiums payable, the renewal dates and the amount of cover maintained.
• Details of all the claims made under its insurance policies by Co.

Permissions / Approvals from State or Local Government Authorities

• Details and copies of all licenses, consents, permit/registrations and approvals held by Co., without limitation.
• Details of all conditions applicable to any such Consent, Approvals etc.
• Details of any deficiency letter/notice by any Government authority with respect to any default by Co., under any law.

Compliance and Litigation

• Details including of any and all litigation arbitration or investigations made by or against Co.
• Details of any current litigations or other disputes (including employee health, safety at work, medical negligence, consumer disputes, customs /ED and regulatory disputes), indirect tax related, or any kind of cess related, land, environment, etc. in which Co. is presently involved or may become involved, whether as the plaintiff or defendant.

Dr. Vikram Singh Raghuvanshi is a leading authority on Hospital operations. He has also worked in an area of Strategy & hospital operations for over 25 years. He has designed and managed over 50 hospitals in India. He is also a visiting faculty @ leading management Institutions.