Primecare Equipment Leasing - Rehbar Leasing - Report.pdf · 4 | P a g e Investment Memorandum –...

Investment Memorandum

Primecare Equipment Leasing

Jul-16

2 | P a g e Investment Memorandum – Primecare Equipment Leasing

CONTENTS Deal Overview report ...................................................................................................................................... 4

Brief Investment Pitch ................................................................................................................................ 4

Brief details of the deal............................................................................................................................... 4

Brief details of the business ........................................................................................................................ 5

Business Analysis report ................................................................................................................................. 6

Business Overview ...................................................................................................................................... 6

Company Structure ..................................................................................................................................... 6

Company History ........................................................................................................................................ 6

Business Infrastructure ............................................................................................................................... 7

Business Team ............................................................................................................................................ 8

SWOT Analysis ............................................................................................................................................ 9

Financial Modelling report ............................................................................................................................10

Application of funds ..................................................................................................................................10

Deal Structure ...........................................................................................................................................12

Historical Financials ..................................................................................................................................12

Projected Financials ..................................................................................................................................13

Lease rental sharing ratio and expected annualized return on investment (ROI) ....................................14

Industry Analysis ...........................................................................................................................................14

Industry Overview ....................................................................................................................................14

Porters Five Force Analysis .......................................................................................................................15

Promoter Background report .......................................................................................................................15

Promoter details .......................................................................................................................................15

Overall assessment of the promoter ........................................................................................................18

Due Diligence Report ....................................................................................................................................18

Company site visits ...................................................................................................................................18

Interactions with people associated with the promoter ..........................................................................19

Risk Management report ..............................................................................................................................19

Risk factors and mitigation steps ..............................................................................................................19

Details of collateral/security for investment ............................................................................................21

Sharia compliance report ..............................................................................................................................22

Sharia compliance of the business ...........................................................................................................22


Sharia compliance of the investment structure .......................................................................................22

Overall Sharia compliance decision in the deal ........................................................................................22

Documentation .............................................................................................................................................23

Documents collected ................................................................................................................................23

Summary Statement .................................................................................................................................23

Deal Monitoring ............................................................................................................................................24

Feasibility of deal monitoring ...................................................................................................................24

Deal Monitoring plan ................................................................................................................................24

Investment Agreement draft ........................................................................................................................24

Disclaimer .....................................................................................................................................................35

About Rehbar Financial Consultants .............................................................................................................36

Brief Introduction .....................................................................................................................................36

Operational Flow ......................................................................................................................................36

Our team ...................................................................................................................................................36

Our Team profile .......................................................................................................................................38

Contact Details ..........................................................................................................................................41


DEAL OVERVIEW REPORT

Brief Investment Pitch Primecare (India) is a healthcare corporate providing innovative integrated healthcare to communities in

and around Bangalore. After a seemingly successful pilot with two running centres, Primecare has

embarked on an ambitious plan of establishing three hospitals and twenty medical centres over the

following two years all over Bangalore. The group is in the process of setting up the first of these three

hospitals which will be a 28 bed hospital and requires Rs. 1.8 crore to purchase medical equipment. The

investors’ funds will be used to purchase the equipment which will in turn be leased to the hospital in

return for monthly lease payments. The business is backed by very professional and creditworthy

promoters who are also supporting the deal with their personal guarantees.

There will be 2 types of cash flows to the investors. One is from the monthly rental, the other is from the

partial asset repurchase, which the company will be doing at the end of each year of the 3 year tenure.

Brief details of the deal Deal Category (Investment/Emerging/Social) – Investment deal

Deal Structure – Structured as a loan where the payments replicate an ijarah (lease) contract

Total investment amount – Rs. 1.8 crore

Minimum investment ticket size – Rs. 5 lakh

Investment tenure – 3 years

Method of payment of profits & principal – Monthly lease payments will be made along with 3 bullet payments at the end of each year towards asset repurchase

Expected profits/losses for the investment – Gross expected internal rate of return of 18%


Risk profile (High/Medium/Low) – Low to Medium risk, since the monthly cash flows do not depend on the business performance and since the credit risk is low in the deal owing to high creditworthiness of the promoters and their personal guarantees. The only major source of risk seems to be any damage/devaluation of the leased equipment. The risk of loss is there only in the unlikely event that the hospital closes down in the first 2 years of the lease period itself and we are forced to sell the equipment in the market at a significant discount to the fair asset value.

Brief details of the business Name of the business – Primecare Medical Services and Multispecialty Clinics (India) Private Limited

Nature of the business – Healthcare services

Location – Bangalore, India

Expected annual turnover – Rs. 6 crore

Year when the business started – Oct 2012

Name of the business CMD – Dr Syed Sayeed Ahmed

Website – www.primecare.in

Deal summary report has been approved by the following personnel:

1. Mudassar Ali Baig, Executive Director

2. Sherif Kottapurath, Director

http://www.primecare.in/


BUSINESS ANALYSIS REPORT

Business Overview Primecare (India) is a healthcare corporate providing innovative integrated healthcare to communities in

and around Bangalore. After a seemingly successful pilot with two running centres, Primecare has

embarked on an ambitious plan of establishing three hospitals and twenty medical centres over the

following two years all over Bangalore. Their roll-out plan is as follows:

· P1 hospital - August 2016

· P2 hospital - March 2017

· P3 hospital - August 2017

· Total 10 pharmacies - by August 2017

· 10 more pharmacies - by August 2018

Company Structure Primecare Medical Services and Multispecialty Clinics (India) Private Limited was registered as a private

limited company in Oct 2012. It has raised Rs. 6.03 crore from the directors and the external shareholders.

The company does not have any debt on its books. Following is the shareholding pattern of the company

as on 9th June 2016:

Shares Issued/Pledged % Holding

Promoters 31,50,000 65.19%

Other Shareholders 16,82,400 34.81%

Total Number of Shares 48,32,400

Company History The Primecare team is comprised primarily of doctors, based mostly out of the U.K. It’s chairman and

managing director is Dr. Sayeed Ahmed, a specialist paediatrician, who also pursued an MBA at Warwick

additionally with an eye on setting up this business. The idea of Primecare health centres was born in the

U.K., when the team comprising of Dr. Fayas Chauddhry, Dr. Naveed Azam, Dr. Akram etc. decided to

acquire the skills and resources while working in the U.K. to return to India and start health centres that

offer ethical and transparent health services. They believed this is necessary because they found out with

experience and feedbacks the aforementioned values are lacking critically in the hospital industry generally

and in the Indian market particularly.

Eventually, Dr, Naveed Azam, the group medical director returned to India in 2013 and started the ground

work. Today, the company operates two medical centres running – one at Richards Park and the other at


OMBR layout. Three multi-speciality hospitals are on the pipeline which are being set up at Frazer Town

(28 beds), Basavangudi (25 beds) and Minhaj Nagar (50 beds).

Business Infrastructure Richard’s park multispecialty clinic works from 8 AM to 9 PM, has 5 consultation rooms, one mini operation

theatre with ultrasound machine, a Day care center, a pharmacy running from 8 AM to 12 AM, facilities

like ECG, ultrasound and ECHO. They provide house visits, endoscopy, minor OT circumcision,

physiotherapy. They also have their own laboratory called CICI lab.

There is another multi-speciality clinic in OMBR layout with 6 consultation rooms, a lab collection point,

home visits etc. Both the clinics put together caters to around 40 patients per day.

Fig. 1: The Pilot project – Clinic and adjacent pharmacy in Richards Park


Fig. 2: The hospital in M.M Road set to inaugurated in August

Business Team 1. Dr. Syed Sayeed Ahmed, MBBS, DNB, MRCPCH, (MBA-Warwick) – Chairman & Managing

Director

2. Dr. Naveed Azam, MBBS, MRCP, FRCP, CCST (Gastroenterology) – Group Medical Director

3. Mr. Parveez Ahmed, MBA – Director and Business Head

4. Dr. Mohamed Umar Nayaz, BDS, MSCR (UK), PGDPM, (PGDMLE) – Director Operations

5. Mr. Tanveer Muhammad, Director - Strategy & Investor Relations

6. Mr. Syed Naveed Ahmed, BE, MCSE, PMP Director – IT Services

7. Dr. Akram Ali, FRCA - Director - Investments

8. Dr. Fiaz Choudhry, MD, FRCS Director

9. Mr. Shabir Ahmed, BE, Director


SWOT Analysis Strengths The team is seemingly comprised mostly of conscious, practicing Muslims, who feel it is part of the

obligation of their faith, to give back to society. They however feel that ethical and transparent health care

doesn’t have to be charitable; it can be priced reasonably, so as to make profits and keep the model

sustainable. With a competent team on board, they seem equipped to realize this dream.

Weaknesses Running a hospital in a competitive environment and a chain at that, is a daunting task even for seasoned

professionals, let alone for doctors. The hospital is still at its infancy stage and needs to win the trust of the

masses through its services. The financials of the project also indicates that it will take two more years to

become start earning profits. This however will not affect this particular deal since it’s an ijarah (lease)

model.

They also want to avoid out-sourcing any work, to avoid kickbacks and commissions, which will be a

constraint to deliver ethical care.

Opportunities People are in the lookout for hospitals that are ethical and professionally run which are more humane, as

they have grown averse to certain practices of big corporate hospitals. There is also a lack of corresponding

health care facilities for the growing Indian population.

Threats All promoters in Primecare are doctors who have independent prac tices, which they will not be giving up.

Other than the money invested, their involvement is not full time. This raises a concern as it could mean

compromised approaches. In the rare possibility of the hospital closing down, Rehbar will be forced to sell


the leased assets at market value which might lead to losses. The proposed growth of the hospital depends

highly on its ability to raise funds for the upcoming phases also.

Business analysis report has been approved by the following personnel:

1. Ali Shariff, Investment Committee

2. CH Raheem, Investment Committee

FINANCIAL MODELLING REPORT

Application of funds Primecare is planning to start a new multi-specialty hospital (P1) on MM Road, Bangalore. The funds will

be used to purchase the medical equipment and furniture to be used in this new hospital. Following are

the assets which will be purchased and leased to the company:

Schedule 1

OT Theatre

OT Light 2

Anesthesia station 2

Surgical Diathermy Cautery machine 2

CSSD Room

ETO sterilizer 1

Ultra sonic washer 1

Vertical Autoclave 1

CSSD furniture SSframe/Panels 1

Scrub station 2

MEDICAL EQUIPMENT

CR unit 1

Cassette 1

Multi para monitor *5para 1

Patient sign monitor (Pulse Oximeter 3 parameter) 4

ECG (3 Channel) 1

Infusion Pump 3

Syring Pump 3

ABG Analyser 1


Hormone Analyser 1

ENT EQUIPMENT

Head Light - OPD Rechargable with wire 1

Operating Head Light (Cord less) 1

LED Light Source Optofine with cable 1

Operating Microscope Optofine with LED

Loight & Endoport Loight & Endoport

1

Nasal Endoscope - O- Degree Serwell 1

Nasal Endoscope – Peadiatric 1

Laryngoscope -70 Degree Rigid China 3 Blades - Xomed 1

Video Adaptor with Camera Head 1

Drill, Motor, Hand Piece(NSK) 1

DENTAL

Airel Dental Chair 1

RVG (Dental X-ray) 1

LABOUR ROOM

Labour light 1

Fetal Monitor 2

ADULT ICU Medical Equipment

Mutipara Monitor ( 5Para) 3

Cardiac monitor with Defebrillator 1

NEONATAL ICU Medical Equipment

Infusion Pumps 2

Syringe Pumps 2

NICU Monitor without ETCO2 2

Phototherapy Unit (3DSPT) 3

Used neonatal equipment multiple

AMBULANCE

Tata Winger BLS High Roof ambulance fully-equipped 1

SURGICAL EQUIPMENT

Surgical Equipment SET 1

GENERATOR

Kirloskar Green Generator 1

AIR CONDITIONERS

Voltas AC Multiple

Medical Furniture

Semi Fowler Bed ( 2 functions) with mattress 2


ICU beds (Fowler Bed ( 5 functions) Electric) 2

Fowler Bed ( 5 functions) Manual 2


ICU beds (Fowler Bed 5 function of which 2 functions

Electric)

2


LDR bed 1

LDR bed 3


Electric)

2

Labour Table 1

Electric Minor OT Table 1

OT Table 2

ENT Patient Examination Chair 1

Patient Lift 1

Deal Structure The investors will be considered lenders on the books of the company. Their monthly consideration

payment towards the loan will however be calculated on the understanding that the medical equipment

which was purchased using their funds is leased to the hospital. Primecare is purchasing the equipment

as agents of Rehbar who in turn are agents of the investors.

Asset Valuation methodology:

i. Valuation of the assets is to be done and a report sent to Rehbar at the end of every year.

ii. Rehbar team will get it vetted by industry experts and request for clarifications regarding any

major variation seen from the expected values.

iii. Any significant loss in value of the asset due to improper handling/usage by the hospital staff

needs to be compensated for by the hospital to the lessors. The onus to prove that it is not their

fault lies with the hospital.

iv. Rehbar's valuation of the assets will be considered as the final and binding on all parties.

Historical Financials Amounts in INR

crore

FY-14 FY-15 Q1-FY16 Q2-FY16 Q3-FY16 Q4-FY16 FY-16

Revenue 0.09 1.00 0.29 0.39 0.44 0.49 1.60

Richards Park Clinic 0.25 0.29 0.30 0.35 1.18


OMBR Clinic 0.04 0.10 0.14 0.14 0.42

EBITDA -0.20 -0.21

Fixed assets 0.51 0.33

Total assets 0.89 1.07

Projected Financials Amounts in INR Crore Year 1 Year 2 Year 3

Revenue 6.40 12.14 16.87

Richard’s

town clinic

1.72 2.16 2.70

OMBR clinic 1.30 2.04 2.55

MM Road

Hospital

3.21 7.50 11.07

Basavangudi 0.26 0.58 0.73

EBITDA -3.17 -1.77 1.09

Richard’s

town clinic

-0.02 0.24 0.58

OMBR clinic -0.08 0.22 0.53

MM Road

Hospital

-2.92 -2.14 -0.01

Basavangudi -0.16 -0.09 -0.02

The company plans to meet the negative cash flows from operations as under:

Particulars Amount (INR crore)

Capital raised and received till date 6.03

Cash Available in Bank Accounts 1.60

Investment expected to come in by July-2017 5.50

Further Issue of Shares in 4th Round Funding [Ongoing]

(45 Lakh Shares at Current price of Rs.35)

15.75


Total Funds accruing 22.85

Of the Rs. 5.5 crore which is expected to come in by July-17, the company has been able to get commitment of only Rs. 4 crore so far.

Lease rental sharing ratio and expected annualized return on investment (ROI) The gross expected return on investment is 18%. The cash flow expected for the investment tenure is as

follows:

Amount Rehbar Fees Net Cash Flow

Monthly Payment INR 6,250 270 5,980

Ass

et R

ep

urc

has

e

End of Year 1 INR 160,281 0 160,281

End of Year 2 INR 160,246 0 160,246

End of Year 3 INR 138,111 0 138,111

Financial Modelling report has been approved by the following personnel:

1. Raashid Sherif, Investment Team

2. Mudassar Ali Baig, Investment Team

INDUSTRY ANALYSIS

Industry Overview The healthcare sector in India is growing with the number of beds to the total number of patients still

being very low compared to the world average. It is a very profitable sector. Hence many of the hospitals

tend to exploit this situation to reap huge profits from the patients. Primecare, on the other follows an

ethical way of doing business by providing affordable healthcare from highly professional doctors who

believe in the giving back to society. Due to its affordable model, the company believes that it wouldn’t

face much competition from other players.


Porters Five Force Analysis Rivalry among existing competitors The clinics and the upcoming hospitals cater to the middle class sector. The major competitors in this

section of the industry are Santhosh hospital, Meridian hospital, HBS, Specialist hospital, Xion etc.

Primecare is taking a totally different approach compared to others where they keep their rates much more

affordable. Hence there are no worries about the competition if they can get the goodwill required for

sustenance.

Bargaining power of doctors Almost 75 per cent of the doctors currently working in the clinics are shareholders of the company. But

one fact sticks out that none of the shareholding doctors’ work full time in the clinics. Hiring highly qualified

doctors who share the principals and values of the organization is going to be a challenge. The bargaining

power of doctors will be high.

Bargaining power of customers Hospitals in India are always crowded thanks to the booming population. The affordability of the proposed

model makes it very attractive to the general public provided the hospitals will provide quality and

consistent services. We will rate the bargaining power of the patients in this case as being medium to low.

Barriers to entry It is seemingly easy to set up such hospitals after obtaining the required licenses and complying the

regulatory agencies. But it will take at-least 5 years for a hospital to build the kind of goodwill which is

required to sustain. We will rate the barriers to entry as being medium to high.

Threat of substitutes Specialized hospitals could offer a substitute but the risk is low since they cater to a different niche of

patients.

Industry Analysis report has been approved by the following personnel:

1. Sherif Kottapurath, Industry experts team

2. CH Raheem, Industry experts team

PROMOTER BACKGROUND REPORT

Promoter details The Primecare team is a young team of doctors, entrepreneurs and management professionals with

multinational experience in India, Middle East and the UK. Presently Dr Syed Sayeed Ahmed is the

Chairman and MD at Primecare.


EXECUTIVE BOARD OF DIRECTORS:

● Dr. Syed Sayeed Ahmed, MBBS, DNB, MRCPCH, (MBA-Warwick) – Chairman & Managing

Director

Aged 42 years. Trained as Paediatrician at NHS, UK. Has more than fifteen years of clinical

experience in Paediatrics & Neonates and has worked in both public & private sector healthcare

establishments in India, Saudi Arabia & the UK. He is committed to establishing a truly world class

healthcare organisation with business units in India, Middle East & the UK. After securing Warwick

Scholarship, completed Executive MBA at Warwick Business School, which is among top 25 B-

Schools in World FT rankings. Project Management trained in PRINCE2 methodology and is

working towards Lean Six Sigma healthcare certification. Provides visible strategic & strong

operational leadership to Primecare team and leads the senior management team in the day-to-

day running of Primecare (India). Married to a homemaker and blessed with three kids. Alumni of

Kuvempu University, Karnataka & Royal College of Paediatrics & Child Health, UK.

● Dr. Naveed Azam, MBBS, MRCP, FRCP, CCST (Gastroenterology) Group Medical Director

Aged 42 years; Consultant Gastroenterologist practising at Primecare and Columbia Asia Hospital,

Bangalore. Previously Consultant Gastroenterologist in the NHS UK until 2013. His special interests

are inflammatory bowel disease, therapeutic endoscopy & teaching endoscopy skills. A very

dynamic individual with excellent leadership qualities, Dr. Naveed leads the clinical team at

Primecare and provides medical leadership to the organisation. He was the founding father of the

Medical & Engineering Library at Darussalam, Bangalore – this iconic library has not only been

instrumental in hundreds of doctors coming to UK – but also continually engaged in providing

excellent library facilities and advisory support to students of higher learning including medicine,

dental & engineering students. Dr Naveed is also one of the founding members of Mufeed, an

organisation of Indian doctors in the UK, supporting newly arrived doctors to the UK. Dr Naveed is

also part of the charity leading and managing “Shama Clinics”, a chain of charitable primary care

clinics, engaged in healthcare activities in some of the poorest and downtrodden areas of B’lore.

Married to a dual qualified physician (GP & Internist) and blessed with three children. Dr Naveed

is an alumnus of Bangalore Medical College & had Gastroenterology training at Leicester.

● Mr. Parveez Ahmed, MBA Director and Business Head

Aged 35 years. A qualified management professional with an MBA; has over 7 years of experience

in Retail banking & Software Industry. Has previously worked for HSBC, Citibank & ICICI in various

capacities at middle management level. Quit banking industry for Shariah reasons and worked as

Operations Director in a Bangalore based IT firm. He is the business head at Primecare and in-

charge of Finance, business development, IT, projects and heads the retail pharma vertical.

Married to a homemaker and has a lovely daughter. Alumnus of Bangalore University with MBA

(Marketing major)

● Dr. Mohamed Umar Nayaz, BDS, MSCR (UK), PGDPM, (PGDMLE) Director Operations


Aged 34 years. Qualified dentist by profession, Dr Umar is the Director Operations at Primecare.

He is responsible for all operations, public relations and represents the organisation at all fora

locally. Full of energy and enthusiasm. He also has a MSc in Clinical research from Cranfield

University and currently a part-time medical law student from National Law School, Bangalore.

Married with two kids and alumnus of Rajiv Gandhi Healthcare University, Bangalore.

● Mr. Tanveer Muhammad, Director - Strategy & Investor Relations

Sales Director at Precedence Technologies LLC – a Dubai based IT Company; Tanveer brings

international business experience to Primecare. Tanveer holds the distinction in starting

Precedence from scratch and taking it to glorious heights it with many hospitality and healthcare

clients in UAE and abroad. Tanveer is closely involved with formulating strategy and maintaining

investor relations at Primecare. Native of Bangalore and settled in Dubai, Tanveer is committed to

providing quality healthcare and steering the organisation successfully. Married with four kids and

alumnus of Kuvempu University, India.

● Mr. Syed Naveed Ahmed, BE, MCSE, PMP Director – IT Services

Aged 46 years. Presently working as Manager (IT) - Riyad bank, Riyadh-Saudi Arabia. Experienced

Systems Engineer with about 20 years of multinational experience in India & Middle East. Brings

to the table a wealth of IT and management experience. Holds various Microsoft Networking

certifications and PMP certification in Project Management. Committed to healthcare and

Educational projects in Bangalore. Founding Joint Secretary of Darul Arqam Academy of Islamic

Education based in Blore. Naveed has excellent relations with the general public at Basavangudi

and the local organisations in Bangalore. Responsible for IT & Project Management at Primecare.

Married to a homemaker and has three kids. Alumni of Bangalore University.

● Dr. Akram Ali, FRCA Director - Investments

Consultant in Anaesthesia & Pain Management at King Fahad Medical City, Riyadh. Previously

Consultant Anaesthetist in NHS UK. A very keen sportsman, Akram is truly committed to making

Primecare a successful healthcare corporate. He is closely involved in formulating strategy and

responsible for handling new investments at Primecare. He plans to move over to Bangalore and

lead the surgical unit at Primecare over the coming years. Alumnus of Bangalore Medical College

and Royal College of Anaesthetists, UK.

● Dr. Fiaz Choudhry, MD, FRCS Director

Presently working as Specialist Registrar Cardiothoracic Surgery, East Midlands Rotation. Dr Fiaz

has more than a decade of experience in Cardiothoracic Surgery in the UK. He has trained in

Midlands & London. Dr Fiaz has extensive training in Video Assisted Thoracic Surgery at Royal

Brompton & Guys Hospital London and has worked under pioneers in VATS. He has various

research papers and international publications and presentations to his credit and is well known

in the UK cardiothoracic academia. He has extensive research experience and has been awarded

MD by Leicester University for Cardiothoracic research. A keen sportsman, Dr Fiaz was University

student leader, played University level cricket and regularly plays football, cricket and golf. He

holds FRCS qualification and is working towards FRCS (Cardiothoracic Surgery). Alumni of Madras

Medical College, University of Leicester & Royal College of Surgeons, Edinburgh.


● Mr. Shabir Ahmed, BE, Director

Director at Precedence Technologies LLC – a Dubai based IT Company; Shabir brings international

business experience to Primecare. Shabir Ahmed holds the distinction in starting Precedence from

scratch and taking it to glorious heights it with many hospitality and healthcare clients in UAE and

abroad.

Overall assessment of the promoter The team is seemingly comprised mostly of conscious, practising Muslims, who feel it is part of the

obligations of their faith, to give back to society, across the spectrum. They, however feel ethical and

transparent healthcare doesn’t have to be charitable: it can be priced reasonably, so as to make profits,

and keep the model sustainable. With a competent Team on board, and a CMD with business knowledge,

they seem equipped to realise this dream, on the face of it.

However, running a Hospital in a competitive environment and a chain at that, is a daunting task, even

for seasoned professionals, let alone for Doctors. They HAVE hired professionals from the industry, adept

at those skills, to do that job, but the concern of nobody whose money is in the game actually being

involved full-time remains.

All promoters in ‘Primecare’ are doctors who have independent Practices, which they will not be giving

up. Other than the moneys invested, their involvement is not full-time. That could mean compromised

approaches.

Promoter background report has been approved by the following personnel:

1. Tanveer Ahmed, Due diligence team

DUE DILIGENCE REPORT

To do justice to the exercise, the Rehbar team met all the main promoters turn by turn, and had personal meetings with all.

Physical inspections of all three existing facilities - viz., the clinics at Richards Park and OMBR layout, and

the Hospital on M.M. Road, were also conducted separately by the due diligence team, the investment

team, the risk management team and the CEO. Additionally, opinions of people in the Medical field, and

equipment sale were also taken, along with background checks of promoters.

Company site visits The Rehbar Team has made five visits to the Primecare facilities, including their upcoming Hospital on M.M.

Road. While on these visits, apart from physical inspection of infrastructure, meetings with crucial people,

such as Dr. Naveed Azam, Dr. Umar Nayaz, Dr. Akram Ali, CA Amjad, were also had, with one meeting with

the CMD, and his team.


Interactions with people associated with the promoter

Sl. No Name Brief description of the person Due diligence efforts

1 Dr. Naveed

Azam

Specialist Gastroenterologist, originally from

Bangalore. Worked with the NHS, U.K., for

more than 15 years. Part of social movements

and Islamic Quran study groups, for very long.

Well-respected in Community circles.

Had conversations

personally and verified

antecedents with others

in the Medical fraternity.

2 Dr. Umar Nayaz. Practising Dentist. Old Bangalorean. Cousin of

Dr. Sayeed, the CMD. In-charge of overall

administration. Had three meetings with him

one on one.

Understood operations

and procurement

procedures being

followed by Primecare

3 Mr. Basharath Independent Medical Equipment supplier Vetted the equipment

list and prices provided

by Primecare

Due diligence report has been approved by the following personnel:

1. Tanveer Ahmed, Risk team

RISK MANAGEMENT REPORT

Risk factors and mitigation steps The risk factors and the mitigation steps taken have been enumerated as follows:

Credit Risk The possibility that the Company may not pay the investors their monthly returns and/or their investment amounts by the expected due date. Mitigation Steps: This risk is mitigated as we have structured a leasing deal with the Company wherein the monthly rentals and capital repayment amounts have to be repaid as specified in the financial model mutually agreed and these will not be dependent on the performance of the business. Additionally, Primecare has demonstrated a continued interest from equity investors in the past and we believe their future forecasted fund raising rounds should also come through especially after the commencement of the P1 Hospital which this deal shall enable. Further there is an added cushion in the Company’s policy to always maintain a working capital buffer of Rs. 2 Crores at all times regardless of the situation and to not dip into this reserve to meet any capex requirement and other expenditure shortfalls. Thus even though forecasted EBITDA for the Company


is negative in FY16 and FY17 we see no problems in them meeting their cash flow obligations under this deal. Additionally, we are further assured as the promoter’s skin in the game in terms of their aggregate shareholding in the company is greater than 50% and we have been told that this would continue to be the case when further expected equity funding of approximately Rs. 20 Crores that the Company is seeking will come in over the next 18 months. We have also secured from two of the main promoters, Dr. Syed Sayeed Ahmed and Dr. Naveed Azam, separate third party personal guarantees, to further mitigate the credit risk inherent in this deal. Further, our financial model does take into consideration market depreciation rates while calculating the resulting payments to be paid by the Company and we do not foresee any adverse effects on the valuation of equipments (medical equipment) being financed due to unforeseen reasons. The investors will continue to own the title to the equipment in their capacity as lessors and a copy of all the equipment invoices, receipts and warranty contracts shall be held on behalf of the investors by Rehbar. Nonetheless, we have put in the Lease Agreement between the investors and the Company, a clause that in case of specified delays, the promoter will be required to pay a 3rd party charitable trust or society of Rehbar’s own choice, a specified penalty amount on behalf of the investors, and additionally to the investors themselves, a separate amount equivalent to the tax applicable at the maximum marginal rate of Income Tax on the amount that was directly paid to the concerned charity for which no income tax exemption is available.

Market Risk Description: The possibility that the Company is not able to generate the presumed volume of business (in terms of number of outpatients, occupancy levels, pharmacy sales, etc.) or that due to competitive, fiscal or other pressures and developments, it is not able to generate the targeted margins in different segments of its business. Mitigation Steps: Having reviewed the Company’s internal financial forecast model we believe it has incorporated fairly conservative assumptions with regards to future growth prospects both in terms of sales and occupancy rates while taking a realistic view of budgeted expenses both capex and operating, and after factoring in the prospective negative impact of increased future competition, fiscal policies, pricing of various inputs in terms of bought-out items, salaries and wages, utilities and services, and the loss of existing key resource personnel, the Company is poised to significantly grow its top line from a present level of Rs.1.6 Crores in FY16 to Rs.6.4 Crores and Rs. 12.1 Crores in FY17 and FY18 respectively, which provides a fairly robust cushion to mitigate this risk. Additionally since the Company is in the healthcare domain and is also not just focused on any specific specialty, demand for the Company’s services and facilities is thus fairly inelastic which further mitigates the risk of any macroeconomic and business specific market shocks.

Operational Risk Description: The risk of the business being unable to deliver the required and assumed level of service quality and satisfaction to their customers due to operational inefficiencies, inadequacies or shortcomings and the same translating into loss of business, higher costs, lower realisations or lower volumes and the risk of any equipment being financed not being in a usable condition due to any technical faults, accidents, etc. Mitigation Steps: Primecare has in a space of the last three years established a fairly strong brand name with good customer satisfaction in its present area of operations around the Frazer Town area of Bangalore. This has been possible by their focus on cohesive primary care services, personal care from its team of physicians and support staff and operational efficiencies in their procurement, logistics and retail processes. Additionally, the equipment being financed will be under comprehensive warranty in their first year of service with the Company maintaining an annual maintenance buffer of 0.5% of the financed amount on top of the rental payments for the deal. The Company has also in principle agreed to undertake comprehensive maintenance


and annual maintenance contracts for the equipment from year 2 onwards as and when it is deemed financially prudent to do so.

Liquidity Risk Description: The risk of the medical equipment not being able to be sold or bought back by Primecare at the stipulated amount either during the tenure or the end of the tenure due to lower than forecasted market values, excessive depreciation, damages not covered by insurance, improper maintenance of the equipment or any other unforeseen circumstances. Mitigation Steps: Our financial model is very conservative regarding the valuation of the leased assets and the depreciation rates used. For instance in year 1 of the lease period, we have used a very high depreciation rate of 35%, which is higher than the mandated accounting depreciation for medical equipment; thus we expect the amount realized at the end of the tenure to not go lower than the stipulated amount. Furthermore, Rehbar’s Deal Monitoring Team will be conducting regular checks of the equipment, especially the big ticket items to ensure that they are well maintained and not being misused.

Shariah Non-compliance Risk Description: The risk of losing public and customer goodwill resulting in adverse financial impact due to exposure of any Shariah non-compliant behaviour or activity by the promoter or the business or through any procedure conducted by or in the Company, or usage or sale by the Company of goods, supplies, equipment or foods etc. which are not Shariah compliant. Mitigation Steps: The Lease Agreement includes a provision for Rehbar to conduct annual Shariah Audits for the business through an external accredited agency in this area to specifically ensure that no Shariah non-compliant activity happens in the Company nor is any Shariah non-compliant item or procedure used in any of its premises. Additionally all documentation and processes related to the deal including the Lease Agreement have been vetted by Rehbar’s Shariah Advisor to ensure full Shariah compliance.

Details of collateral/security for investment The following collateral/securities will be collected by Rehbar on behalf of the investors while signing the

Agreements, and will be relied upon to discharge any risk related to non-performance, fraud or

malpractice on behalf of the Company/ Promoters:

1. Equipment Papers: Certified copies of all documentation relating to the equipment being

financed such as invoices, receipts, warranty contracts, etc. will be handed over to Rehbar to be

kept on behalf of the investors until the closure of the Deal.

2. Personal Guarantees:

i) Promoter 1: Dr. Syed Sayeed Ahmed, Chairman and Managing Director presently working as

a Paediatrician with National Health Service (NHS), UK

ii) Promoter 2: Dr. Naveed Azam, Group Medical Director, presently practising as a

Gastroenterologist at Columbia Asia Hospital, Bangalore


With regards to the above Personal Guarantees, for each individual investor, appropriate

documentation has been signed by the Guarantors in terms of a Promissory Note with associated

terms and conditions, and the original copies of the same will be kept in custody on behalf of the

investors with Rehbar.

Risk management report has been approved by the following personnel:

1. Saif Ahmed, Risk team

SHARIA COMPLIANCE REPORT

Sharia compliance of the business The promoters of the business are seemingly practicing Muslims most of whom are Doctors who took it

upon themselves to run an ethical hospital to provide affordable healthcare to the society. They follow

practices which are Sharia compliant and so is their funding so far.

Sharia compliance of the investment structure Prime Care Hospital, Bangalore has a requirement to purchase medical equipment for 1.8 Cr. There are a

total of about 55 items which they require. They have approached Rehbar for leasing the equipment.

Rehbar investors will transfer the money to Prime Care, who will purchase the equipment as agents of

the investors. They will also take Annual Maintenance Contract (AMC) on the behalf of the investors. For

the equipment where AMC was not availed, a reserve will be maintained to pay for maintenance

expenses. Once Prime Care receives the equipment, they will start paying rental, and over 3 years, they

will also buy back the equipment completely. Whatever unutilized maintenance reserve is available at the

end of the 3 year tenure will also be returned to the investors.

Overall Sharia compliance decision in the deal The deal is found to be permissible.

Sharia compliance report has been approved by the following personnel:

1. Mufti Toufeeq Mansoor Mazahiri, Sharia Board


DOCUMENTATION

Documents collected Sl. No. Documents Verified by Remarks

1 Hospital Rental agreement for 15 years at MM road, Frazer town, Bangalore (12 Aug 2015)

Sajeed Ahamed Annexure -1

2 Incorporation Certificate (Oct 2012) Sajeed Ahamed Annexure -2

3 MOA – (14 Oct 2012) signed by Dr Sayeed & Dr Parveez


4 AOA - (14 Oct 2012) signed by Dr Sayeed & Dr Parveez


5 Bank account statement HDFC of Apr 2015 – Mar 2016. Bank account statement ICICI of Apr 2016


6 IT returns 2014-15 , 2015-16 Sajeed Ahamed Annexure -6

7 VAT – Form VAT 105 (Apr 2014 – Jan 2016)


8 Service certificate of Medicare Environmental Management- valid till Jan 2017. Signed by COO- Mohamed Arif


9 Directors’ Personal Documents – a) Syed Sayeed Ahmed- PAN card, Passport b) Syed Naveed Ahmed- PAN card, Aadhar card c) Syed Naveed Azam- PAN card d) Fiyaz Taj M Chowdhary- PAN card e) Parveez Ahmed- PAN card, Passport f) M Umar Nayaz- PAN card, Voter id card g) M Akram Ali- PAN card, Driving licence h) Tanveer Mohamed- PAN card, Passport


Summary Statement All the required documents are in place and received by the Rehbar team.

Documentation report has been approved by the following personnel:

1. Sajeed Ahamed, Operations team


DEAL MONITORING

Feasibility of deal monitoring Since this is equipment leasing, Rehbar’s monitoring activity will be focused on:

1. Co-ordinating with the agencies assigned AMCs and CMCs, to assess asset health

2. physical inspections by the Rehbar team, periodically, to ensure that the equipment is stationed

in the promised location

3. Assessment of equipment condition by industry experts, at the end of every year, which also will

help determine the actual depreciated value. Additionally, the billing of the equipment will be

randomly checked, so as to estimate usage.

Deal Monitoring plan 4. Management to share monthly report on asset health

5. Management to share monthly reports on CMC/AMC payments made/due in the next 3 months

and proofs of CMC/AMC payments made.

6. Share quarterly financials and yearly audited financials

7. Rehbar monitoring team will make quarterly visits to the facility to verify the asset health report

8. Management to share annual asset valuation report.

Due monitoring report has been approved by the following personnel:

1. Tanveer Ahmed, Deal monitoring team

INVESTMENT AGREEMENT DRAFT Following are the drafts of the investment agreement:

Lease Agreement

THIS AGREEMENT of Lease made at Bangalore, this 1st day of July, 2016, between investors sourced by Rehbar

Fin Consultants Pvt Ltd, a company incorporated under the Companies Act, 1956 and having its registered

office at #31, Norris Road, Richmond Town, Bangalore 560025 (hereinafter referred to as “the Lessor”)

represented by its CEO Mr. Mudassar Ali Baig, of the FIRST PART

And

Prime Care …………… a company incorporated under the Companies Act, 1956 and having its registered

office at ………………. (hereinafter referred to as “the Lessee”) of the SECOND PART

WHEREAS on the basis of a Commitment to Lease made between the Lessee and the Lessor the Lessee had

agreed to lease from the Lessor the Equipments more particularly described in Schedule A annexed to this

Agreement (hereinafter referred to as “the Equipments”) on the Lessor acquiring the Equipment;


AND WHEREAS subsequent to execution of the Commitment to Lease, the Lessor has arranged for transfer of

the amount to the Lessee for the purchase of the said Equipments on behalf of the Lessor with the purpose of

leasing it to the Lessee upon the terms and conditions hereinafter appearing;

AND WHEREAS the Lessee has agreed to take on lease the Equipment purchased by the Lessor;

NOW IT IS HEREBY AGREED AS FOLLOWS:

1. In pursuance of the said Agreement and in consideration of the lease rent hereby agreed and of the covenants,

stipulations and terms and conditions herein contained and on the part of the Lessee to be observed and performed,

the Lessor doth hereby grant the lease of the Equipments unto the Lessee upon the terms and conditions hereinafter

mentioned for the term of 36 months commencing on the 1st day of August, 2016.

2. The Lessee shall pay to the Lessor for having been allowed use of the Equipment for a period of 36 months,

monthly lease rent as specified in Schedule B hereunder in advance on / before the 7th day of each calendar month.

3. If the lease rent is not paid on the due dates, the Lessee shall pay penalty at the rate of 2% per month on the

defaulted amount from the due date till payment and/or the Lessor shall resort to legal procedures. The penalty

paid by the Lessee shall be held by the Lessor in trust till it is donated in consultation with the Shariah Advisor of

the Lessor, to a worthy social or humanitarian cause.

4. The Lessee shall throughout the said term:

(i) Pay the lease rentals and related amounts regularly and punctually.

(ii) Keep and maintain the Equipment in good repair and working condition (fair wear and tear excepted).

Notwithstanding the responsibility of the Lessee to arrange for minor repairs to the Equipment and maintain it in

good condition, in the event the Lessee fails to get the Equipment repaired by the person, firm or body approved

by the Lessor or through the authorised service centre of the manufacturer of the Equipment, the Lessor shall be

entitled to take possession of the Equipment and get it repaired and in such event the Lessee will forthwith repay

to the Lessor the full cost of repairs incurred by the Lessor.

(iii) Install, use and operate the Equipment properly and carefully and in full conformity with the instructions

given by the manufacturer in this behalf.

(iv) Pay or cause to be paid all rates, taxes, licence fees, duties, surcharges, registration charges and other

outgoings payable in respect of the Equipment, or its installation, use or operation thereof or in respect of the

premises where the Equipment may be placed, kept or stored for the time being and on demand produce the

receipts thereof to the Lessor or its authorised representatives and in case of failure by the Lessee to pay the rates,

taxes, etc., the Lessor shall be at liberty (but not bound) to make all or any of such payments and to recover the

amount thereof from the Lessee forthwith.

(v) Shall not cause or permit affixation of the Equipment to any immovable property in a way that in the event of

a need to remove it from its current location, the Equipment could be damaged.

(vi) Shall not sell, mortgage, charge, demise, sub–let or otherwise, dispose of or try to sell, mortgage, charge,

demise, sub–let or otherwise dispose of the Equipment in such a way which conveys its title or creates a right in

kind to a Third Party nor shall dispose in such a way which diminishes the value of the asset or the suitability of

using it, or otherwise results in invalidating the conditions of the insurance thereof.

(vii) Shall not itself do nor allow a Third Party to do any act contrary to the provisions of the insurance policy or

which may give the insurer the right to cancel the insurance policy or reduce its liability or otherwise discharge it

from the liability, causing damage to the Lessor.

(viii) Shall not make any alteration, addition or improvement in the Equipment without the prior written consent

of the Lessor and any alteration, addition or improvement when made to the Equipment shall be deemed to be

part and parcel of the Equipment owned by and belonging to the Lessor.


(ix) Permit Lessor and all persons authorised by it at all reasonable times to enter upon the premises where the

Equipment is placed or kept for the time being or installed and to inspect and examine the condition of the

Equipment.

(x) Obtain all necessary licences, permissions, etc. for the use and operation of the Equipment and not use the

Equipment in contravention of the terms and conditions of such licences, permissions, bye-laws or regulations of

any local or statutory authority for the time being in force.

(xi) Indemnify and keep indemnified the Lessor against any claim, demand, liabilities, proceedings or expenses,

brought, filed or incurred against him relating to the transportation, delivery, operation or use of the equipment

including injuries to or death of persons arising from or pertaining to the transportation, possession, installation,

operation or use of the Equipment.

(xii) Provide regular reports to the Lessor regarding all the matters relating to the operation, maintenance, repair

and servicing pertaining to the Equipment.

(xiii) In the event the Lessee does not intend to purchase the equipment from the Lessee at the end of the lease

tenure,

a) Lessee shall inform the Lessor of such intention at least 3 (three) months prior to the elapse of the lease

tenure.

b) On completion of the lease term, it shall be the responsibility of the Lessee to deliver the equipment to

the address of the Lessor or such other address, within the city of the Lessor, as specified by the Lessor.

5. a) In the event the Equipment suffers a major damage or a total loss due to no fault or negligence of the Lessee,

the Lessor agrees to restore or replace the Equipment in a manner such that the Lessee is in a position to obtain

use of its usufruct for the remaining part of the lease tenure. Physical damage, however, will not be the

responsibility of the Lessor. The final decision in the matter of whether the loss was cause due to the negligence

of the Lessee or not, will lie with the Sharia Board of Rehbar Fin Consultants Pvt Ltd.

b) In case of occurrence of the event envisaged in a) herein, leading to substantial expense on the part of the

Lessor,

i.) the parties hereto may subject to mutual agreement, equitably extend the tenure of the lease herein.

ii.) Lessee shall not be required to pay rent for the period of repair or non-availability of the equipment.

6. The Lessee acknowledges, declares and confirms that it holds the Equipment as a mere bailee and the Lessor

is and will be having sole and exclusive right, title and interest in the Equipment.

7. (i) If the Equipment or any part thereof is lost, destroyed or damaged, the Lessee shall immediately notify the

same to the Lessor and the service agent.

(ii) Any loss, theft or destruction of or damage to the Equipment shall not affect the continuance of the lease and

the Lessee will continue to be liable to pay lease rentals in respect of the Equipment / parts of the Equipment thus

affected, provided the Lessor arranges to suitably replace/substitute the same within a reasonable period not

exceeding 15 days or as mutually agreed between Lessor and Lessee.

8. In the event due to unforeseen business exigencies, the Lessee is unable to utilize the Equipment in spite of the

Equipment being fully operational, the parties hereto may, having regard to

(i) the lease instalments already fallen due,

(ii) the balance period of lease to be completed and the lease rentals to be paid by the Lessee for it,

(iii) the market resale value that can be realized for the Equipment,

(iv) the balance useful life of the Equipment,


by mutual agreement and with a notice period of 3 months, terminate the lease at any time during the tenure of

the lease herein or any extensions thereof, with a terminal compensation amount paid by the Lessee to the Lessor

and the Equipment returned to the Lessor, provided however there shall be no occurrence of termination of the

lease for the cause stated hereinabove earlier than 12 months from the start of the lease, i.e. before 1st day of

August 2017. The terminal compensation amount is described in Schedule C annexed to this Agreement

9. If the Lessee-

(i) fails to pay lease rentals or part thereof or any other payments payable hereunder for a period of one month; or

(ii) sells, mortgages, charges, demises, sub-lets or otherwise disposes of or tries to sell, mortgage, charge, demise,

sub-let or otherwise dispose of the Equipment or Equipment parts

(iii) fails to perform or observe its covenants, stipulations, terms and conditions, to be performed or observed by

the Lessee under this lease deed or in any other document executed by the Lessee in connection herewith

(iv) pass a resolution of winding-up or have a petition for winding-up presented against it or if a receiver shall be

appointed for the whole or part of the assets, properties or undertakings of the Lessee or shall compound with or

enter into any composition with its creditors;

(v) do or suffer any act or thing or omit to do or suffer any act or thing, in consequence of which the Equipment

may or is likely to be endangered, attached or taken under execution of any legal process or by any public

authority.’

(vi) if any judgment or order against the Lessee shall remain unsatisfied for more than fourteen days;

(vii) if he abandons the Equipment.

Then and on the occurrence of any such event it shall be lawful for the Lessor to terminate this Agreement, without

prejudice to any action that it may deem fit against the Lessee for any right or remedy under this Agreement or

otherwise at law or to exercise all or any of the following rights or remedies viz:

(i) to take possession of the Equipment and for that purpose enter upon any premises where the Equipment is or

is believed by the Lessor to be for the time being situated and detach and dismantle the Equipment;

(ii) sell, transfer, assign, lease or dispose of the Equipment or part thereof by public or private sale with or without

notice to the Lessee;

(iii) require the Lessee to pay to the Lessor all sums due and payable under this lease, penalty on the due lease

rentals, liquidated damages for loss of a bargain and not as a penalty and other expenses incurred by the Lessor

due to termination of the lease before the term of the lease;

(iv) exercise any other right or remedy available to the Lessor under any law for the time being in force.

It is hereby declared that the Lessee shall also be liable to pay all legal fees, costs and expenses incurred by the

Lessor and arising from the foregoing defaults or the exercise of the Lessor’s remedies and the remedies referred

to above are not intended to be exclusive, but shall be cumulative and shall be in addition to any other remedy

available to the Lessor under any law for the time being in force.

10. The Lessee hereby commits to repurchase the Equipment from the Lessor for a consideration in parts at the

Fair Asset Value price at the end of each year, as per the schedule D below, and the Lessor commits to sell it at

the said price.

11. All disputes, questions, differences and claims whatsoever arising from this Agreement between the parties

and/or their successors or assigns touching these presents or any right or liability arising from these presents shall

be referred to the arbitration of two arbitrators, one to be appointed by each party and such reference shall be

deemed to be reference under and subject to the provisions of Arbitration and Conciliation Act, 1996 or any


statutory modification or re-enactment thereof for the time being in force and arbitration proceedings will be held

at Bangalore. It is hereby specifically agreed between the Lessor and the Lessee that as this Lease Agreement has

been drawn up keeping in view that it be compliant with the Shariah, accordingly any reference to arbitration shall

also be subject to the proviso that the arbitration proceedings ensure that any decision or award of the arbitrators

appointed shall, in addition to compliance with the provisions of the Arbitration Act, also abide by the

requirements of Shariah as advised by the Sharia Board of Rehbar Fin Consultants Pvt Ltd. To facilitate the same,

the Shariah Advisor or its authorized representative shall attend the arbitration proceedings and advise the

arbitrators about Shariah requirements as necessary.

12. All prior agreements or arrangements whether oral or written between the parties relating to the lease of the

Equipment by the Lessor to the Lessee shall be deemed to be cancelled and superseded by this Agreement.

IN WITNESS WHEREOF the parties hereto have executed these presents and duplicate copies thereof and set

their hands and seals thereto on the day and year hereinabove written.

Signed and delivered by the withinnamed Rehbar Fin Consultants Pvt Ltd,

the Lessor by the hands of

Mr. Mudassar Ali Baig, CEO thereof

Signed and delivered by the withinnamed Prime Care_____________, the Lessee

by the hands of Mr. ……………, Director thereof

WITNESSES;

1.

2.

The Schedule A above referred to

Equipment Specifics

OT Theatre

OT Light 2

Anesthesia station 2

Surgical Diathermy Cautery machine 2

CSSD Room

ETO sterilizer 1

Ultra sonic washer 1

vertical Autoclave 1

CSSD furniture SSframe/Panels 1

Scrub station 2


MEDICAL EQUIPMENT

CR unit 1

Cassette 1

Multi para monitor *5para 1

Patient sign monitor (Pulse Oximeter 3 parameter) 4

ECG (3 Channel) 1

Infusion Pump 3

Syring Pump 3

ABG Analyser 1

Hormone Analyser 1

ENT EQUIPMENT

Head Light - OPD Rechargable with wire 1

Operating Head Light (Cord less) 1

LED Light Source Optofine with cable 1

Operating Microscope Optofine with LED

Loight & Endoport Loight & Endoport

1

Nasal Endoscope - O- Degree Serwell 1

Nasal Endoscope – Peadiatric 1

Laryngoscope -70 Degree Rigid China 3 Blades - Xomed 1

Video Adaptor with Camera Head 1

Drill, Motor, Hand Piece(NSK) 1

DENTAL

Airel Dental Chair 1

RVG (Dental X-ray) 1

LABOUR ROOM

Labour light 1

Fetal Monitor 2

ADULT ICU Medical Equipment

Mutipara Monitor ( 5Para) 3

Cardiac monitor with Defebrillator 1

NEONATAL ICU Medical Equipment

Infusion Pumps 2

Syringe Pumps 2

NICU Monitor without ETCO2 2

Phototherapy Unit (3DSPT) 3

Used neonatal equipment multiple

AMBULANCE

Tata Winger BLS High Roof ambulance fully-equipped 1

SURGICAL EQUIPMENT


Surgical Equipment SET 1

GENERATOR

Kirloskar Green Generator 1

AIR CONDITIONERS

Voltas AC Multiple

Medical Furniture

Semi Fowler Bed ( 2 functions) with mattress 2

ICU beds (Fowler Bed ( 5 functions) Electric) 2




Electric)

2


LDR bed 1

LDR bed 3


Electric)

2

Labour Table 1

Electric Minor OT Table 1

OT Table 2

ENT Patient Examination Chair 1

Patient Lift 1

The Schedule B above referred to

Rental specifics

Monthly rental (of which 2,25,000 is to be paid monthly and rest can be deferred to end of the year) INR

Year 1

Rental for 100%

ownership 5,91,667

Year 2

Rental for 100%

ownership 5,78,668

Year 3

Rental for 100%

ownership 5,70,334

The Schedule C above referred to


Terminal Compensation Amount

Terminal Compensation Amount INR

Year 1

9,00,000

Year 2

3,00,000

Year 3

NA

The Schedule D above referred to

Repurchase Schedule

Repurchase Schedule %

Year 1

13.5%

Year 2

28.5%

Year 3

58%

LOAN AGREEMENT

This Loan Agreement is made and effective as of the 15th July 2016.

Between:

Investor, residing at Indian Address (the Lender) of ONE PART

And

PrimeCare Medical Services and Multispeciality Clinics, represented by its Director, ____________, residing at

_____________________, (the Borrower) of THE OTHER,

Both Parties being together referred herein as “the Parties”

WHEREAS

a. the Borrower is in the business of running Health care units, and is starting a hospital on MM Road,

Frazer Town, Bangalore (hereinafter “the Hospital”);

b. the Borrower being in need of Rs 10 lakh (Rs Ten lakh only) for purchasing Medical Equipment and

Furniture, more completely described in Schedule A (hereinafter, “the Equipment”), has approached

the Lender for a loan for a period of 3 year, (hereinafter “the Loan”) for a consideration to be

calculated as detailed in Appendix A (hereinafter “the Consideration”);

c. the Lender is in a position to advance the said sum to the Borrower and is amenable to do so;

d. The Lender will participate equally in advancing as well as recovering the loan and its consideration;

THESE PRESENTS NOW DETAIL AND IT IS HEREBY AGREED AS FOLLOWS:

1. Loan Amount

The Lender has handed over to the Borrower a sum of Rs. 10 lakhs (Rupees Ten lakh only) via transfer to the

account of PrimeCare Medical Services and Multispeciality Clinics.

2. Purpose of Loan


The loan amount has been made available to the Borrower for the purpose of working capital and the

Borrower undertakes not to divert the same for any other purpose without the prior written consent of the

Lender.

3. Tenure of Loan

The Borrower shall complete repayment the loan at the end of 3 year from the date of this agreement.

4. Consideration for the Loan

The Loan shall attract consideration based on the rental of the equipments made by the Borrower from the

Business as well as include periodic capital repayment, as set out in Appendix A, calculated from the 1st of next

month, or from the end of the grace period communicated by Rehbar Fin Consultants Pvt. Ltd. (Rehbar), the

Monitoring agency appointed by the Lender. The consideration will be paid on a monthly basis to the Lender

before the 15th of subsequent Calendar month.

5. Maintenance of Accounts and Records

The Borrower agrees to maintain proper and separate books of account and records in a clear and transparent

manner for all purchases and sales and a register for the Equipment present them for monitoring and

inspection to the Lender or to Rehbar, the Monitoring Agency appointed on behalf of the Lender, till such time

that the Lender continues to have an interest in the Hospital or realizations from it.

6. Access to Hospital, Records and Accounts

The Borrower agrees to provide Rehbar access to his Business records and accounts at any time during regular

working hours till such time that the Lender continues to have an interest in the Business or realizations from

it.

7. Termination of Agreement and Recall of Loan

The Agreement can be terminated:

a. Mutually at the end of the Tenure and repayment of the Loan along with the compensation as

envisaged in this Agreement

b. By the Lender, in the event of occurrence of an event of default and the same remaining

unaddressed.

8. Default & Cure of Default

An event of default shall be assumed to have occurred if there is a willful breach of any of the clauses of this

Agreement by the Borrower, and after the Lender serving a notice on the Borrower to remedy the breach

within a period of 7 calendar days and the breach continuing unamended even beyond the period of notice. In

case of occurrence of an event of default by the Borrower, the Lender will have the right to immediately recall

the Loan, even if not then due and seek additional remedies available under law.

9. Arbitration

The Parties hereto agree that in the event of any dispute between the Parties regarding the subject of this

Agreement, the Parties shall refer the dispute to arbitration under the Indian Arbitration and Conciliation Act

by the Sole Arbitrator, Mufti Khalid Saifullah Rehmani and the decision given by the said arbitrator shall be

final and binding on the Parties to the dispute. The fees of the Arbitrator shall be borne equally by both

Parties.

10. Security for the Loan


The borrower has handed over to Rehbar Fin Consultants Pvt. Ltd., an undated cheque drawn on his account

and favoring the lender for a sum of Rs. 10,00,000 only (Rupees Ten lakh only) as a security for the loan

amount. Apart from this, the borrower will mortgage the Equipment with Rehbar as a collateral for the Loan.

In the event there is a breach of any of the terms of this agreement by the borrower, the lender shall be

entitled to serve notice to the borrower to remedy the breach and in the event the breach is not remedied in 7

calendar days, the lender shall be free to deposit the cheque and seek additional remedies available under

law.

11. Jurisdiction

The Parties agree that this Agreement shall be subject to the laws of India and the courts in Bangalore shall

have exclusive jurisdiction in all disputes.

IN WITNESS WHEREOF THE PARTIES HERETO HAVE SET THEIR HANDS, SEALED AND DELIVERED THESE

PRESENTS

By the withinnamed Lender By the withinnamed Borrower

Investor __________

s/o Father’s name Director – Primecare

In the presence of witnesses

1. (Signature, Name and Address)

2. (Signature, Name and Address)

Appendix A

1. The Profit shall be calculated as Rental – Reserves - Depreciation. The Borrower shall be entitled to

5.55% of the Profit thus calculated.

2. There will also be periodical capital repayments to the Lender, equaling the depreciation amount of

the vehicles, resulting in reduction of the outstanding Loan Amount

Addendum to Loan Agreement

This Addendum to the Loan Agreement dated 15th July 2016 (herein “the Agreement”) between

Investor (the Lender), and

Primecare __________, represented by its Director, _________ (the Borrower)

(Both Parties being together referred herein as “the Parties”) is made and executed this 16th July 2016


WHEREAS

a. The Parties realize that the Agreement has failed to capture some of the intent behind the reason for

the Parties agreeing to come together to execute the Order (referred to in the Agreement).

b. Some of the clauses in the Agreement are in violation of the Sharia, which the Parties wish to avoid.

c. The absence of a clause regarding sharing of loss by the Lender, in case such loss genuinely occurs in

execution of the Order, is in violation of Sharia stipulations and hence the Parties wish to include a

clause in the Agreement in that regard.

HENCE THIS ADDENDUM NOW WITNESSETH:

In the event of a loss occurring in the running of the shop, the loss shall be borne in the ratio of the capital

contributions of the Parties outlined in the Agreement. It is hereby further clarified that in such event, as a

necessary corollary of the foregoing, a shortfall in repayment of the Loan to the extent of the share of loss

to be borne by the Lender, shall not qualify as a default for the purpose of Clause 11 of the Agreement.

IN WITNESS WHEREOF THE PARTIES HERETO HAVE SET THEIR HANDS, SEALED AND DELIVERED THESE

PRESENTS

By the withinnamed Lender By the withinnnamed Borrower

Investor ________________

s/o Father’s name Director – PrimeCare_________

In the presence of witnesses:

1. (Signature, Name and Address) 2. (Signature, Name and Address)

Investment agreement draft has been approved by the following personnel:

1. Raashid Sherif, Investment team


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.


ABOUT REHBAR FINANCIAL CONSULTANTS

Brief Introduction

Rehbar Financial Consultants (Rehbar Fin Consultants Pvt Ltd) acts as a financial intermediary between

investors and businesses. The investment deals which are studied, structured and executed by Rehbar are

based on the principles of profit and loss sharing, capital asset leasing and other such Sharia compliant

structures. Rehbar has been operational for more than 3 years now and in this time has raised over Rs. 20

crore for nearly 60 businesses through about 300 investors.

Operational Flow

Following is the operational flow for any deal which is executed through Rehbar:

1. Business promoters approach Rehbar for financing to help in the growth of their businesses

2. Rehbar has a very professional and experienced team which studies the business in detail,

performs promoter and business due diligence, prepares the financial model and deal structure of

the deal is found to be feasible and prepares the investment memorandum.

3. The investment memorandum is then shared with all the prospective investors in the investor

database of Rehbar, who are then invited to express their interest in participating in the deal.

4. The investors are then selected and finalized based on the selection criterion mentioned in the

operations manual and are requested to transfer the investment amount directly to the

promoter’s bank account.

5. Rehbar receives deal commission from both the parties – businesses and investors at the time of

deal execution and monitoring fees from the investors for regularly monitoring the performance

of the investment.

Our team Directors

1. Sherif Kottapurath

2. MH Khatkhatay (Executive)

3. Shariq Nisar

4. Mudassar Baig (Executive)

Investment Committee 1. CH Raheem




4. Syed Shahabuddin

5. Ali Shariff

6. Ahsan Ali


Investment team 1. MH Khatkhatay (Executive)


3. Raashid Sherif (Executive)

Due Diligence & Deal monitoring team 1. Tanveer Ahmed (Executive)

2. Ashraf Mohamedy (West) (Executive)

3. Ismail Sait (Tamil Nadu) (Executive)

4. AICL (Kerala)


Risk team 1. Saif Ahmed (Executive)


Sharia Board 1. Mufti Khalid Saifullah Rahmani

2. Mufti Shafeeq Ahmed Qasmi

3. Mufti Toufeeq Mansoor Mazahiri

Industry experts 1. CH Raheem

2. Syed Shahabuddin


4. Mustafa Kamal

5. Mustafa Wajid

6. Musthafa PC

7. KM Salihudeen

8. Ismail Sait

9. AK Mohammad Mustafa

10. Rehan Sumar

Operations team 1. Sajeed Ahamed (Executive)

2. Mohammed Erfadh Ebrahim (Executive)

Note The non-executive members in the list above are volunteers who work on a pro-bono basis.


Our Team profile

Sherif Kottapurath - Chairman, Board of Directors

BTech from BITS Pilani , CEO of Posibolt Solutions with more than 30 years of experience in the IT industry in India and US.

MH Khatkhatay - Director, Compliance

BTech from IIT Mumbai, MBA , MD of TASIS, with over 35 years of experience in Islamic banking and finance. Among the pioneers in Islamic Finance in India.

Shariq Nisar - Director

PhD from AMU and Post-Doc from Harvard Law School, Founder Director, TASIS, with over 15 years of practical experience in Islamic Banking and Finance in India.

Mudassar Ali Baig - Executive Director & CEO

BTech from IIT Bombay and MBA (Finance), cleared CFA Level II, more than 8 years of experience in the fields of finance, portfolio management and private equity.

CH Raheem - Investment Committee member

CA by profession, over 35 years of experience, Director (Finance) of KIMS Healthcare Management Ltd, was also founding director of AICL (Alternative Investments & Credit India Pvt Ltd).

Syed Shahabuddin - Investment Committee member

Trustee, National Pension Scheme, Ex- MD of SBI Mutual Funds and CCIL, has more than 40 years experience in Banking and Finance.

Ali Shariff - Investment Committee member

MSc in Development Management from the London School of Economics and Political Science, Consultant with Deloitte, alumnus of IIM-A, over 5 years experience in Supply chain management in India, USA and UK.

Ahsan Ali - Investment Committee member

MS (Arizona State University), Senior Principal Engineer, Autodesk, with over 20 years of experience in IT field in USA and India .


Tanveer Ahmed - Head, Due diligence & Monitoring

More than 25 years of experience in real estate, education and restaurant business, has been conducting Quran study sessions for more than 10 years.

Saif Ahmed - Head, Risk Management

Graduate from Bates College, USA and London School of Economics. Founder of Infinity Consultants, an Islamic Finance advisory firm and Zayd Chit Funds Pvt. Ltd. India’s first Shari‘a compliant chit fund company.

Raashid Sherif - Head, Investments

Commerce graduate and MBA from IMT Ghaziabad and student of the Islamic Sciences, experienced in investment banking, business consultancy and general management.

Ashraf Mohamedy - Regional Head, West

MD, Idafa Investments Pvt Ltd, with over 20 years of experience in the field of Islamic Finance in India.

KM Mohamed Ismail Sait - Regional Head, Tamil Nadu

PhD thesis submitted, MBA, promoter of KMA group of companies which is involved in Leather Export trade since 1932, director of Mana Muna Academy & CIBAF (Center for Islamic Banking & Finance).

Mufti Khalid Saifullah Rahmani - Chairman, Sharia Board

General Secretary of the Islamic Fiqh Academy, India and Member of the International Fiqh Academy, Makkah, Scholar of repute who has established more than 15 institutions of Islamic Education, Research and Jurisprudence across the country.

Mufti Shafeeq Ahmed Qasmi - Member, Sharia Board

Mufti from Darul Uloom Deoband, who is running an educational institution Mah'ad Imam Abu Haneefa and a Darul Ifta at Masjid Ummul Hasnain in Indira Nagar, Bangalore.

Mufti Toufeeq Mansoor Mazahiri - Member, Sharia Board

He did his Aalim and Mufti course from Mazahirul Uloom, Saharanpur and Qadhi course from Imarat Sharia, Patna. He has practiced at Darul Qadha in both Mumbai and Ratnagiri.

AICL (Alternative Investments & Credits Ltd) - Institutional partner, Due diligence

AICL is a finance company operating on Islamic Finance principles of equity and justice. Established in the year 2000, AICL is the pioneer in Islamic Finance in India.


.

M Sajeed Ahamed - Manager, Operations

B. E. Mechanical Engineer, more than 17 years of experience in manufacturing industries as an Engineer in companies such as Steel plant, Plastic industry & Food industry in India, Saudi Arabia & Africa.

Mohammed Erfadh Ebrahim- Manager, Operations

Commerce graduate from Christ University, Banglore and student at Association of Chartered Certified Accountants, experience in a big four firm.

Mustafa Kamal - Member, Industry experts team

He is MD of Toyama Electricals, with extensive experience in the field of manufacturing. Also on the board of schools, hospitals and other social initiatives.

Mustafa Wajid - Member, Industry experts team

Managing Director and CEO at the MEHER Group, has driven technology development & business creation in Power Capacitors, Harmonic Filters & Power Quality Solutions, also served on several committees of Government of India, also serves on the Advisory Board of Kin Advisors.

Musthafa PC - Member, Industry experts team

Alumnus if IIM-B, Co-founder and CEO of ID Fresh. Stints in various MNCs and strong social consciousness have aided him in building iD into the brand & company that is today.

Salihudeen KM - Member, Industry experts team

BTech from GEC Trichur, Head of Electrical, Qatar Fuel Additives Company (QAFAC). Experienced in petrochemical and engineering field.

AK Mohammad Mustafa - Member, Industry experts team

Assistant Vice President, Times Global Broadcasting Company Limited with quality networking and media experience

Rehan Sumar - Member, Industry experts team

CEO & MD at Go Sportz Global Infratech Pvt. Ltd with extensive experience in the Engineering, Procurement and Construction field.


Contact Details

Please feel free to contact us for clarifications or suggestions regarding this deal or otherwise.

Email: [email protected]

Call: +91 80 41127537

Address: 1/1, The Presidency, #1, St Marks Road, Bangalore – 560001

Website: www.rehbar.co.in

mailto:[email protected]

http://www.rehbar.co.in/

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