Interest

Effective Rate

The loan shall carry interest at concessional rate mentioned in Special Conditions. The interest shall be payable in quarterly instalments on first day of March, June, September and December every year. However, without prejudice to the right of the Corporation to recall entire outstanding loan after expiry of stipulated repayment period, the amount outstanding shall carry normal rate of interest prevailing at that time.

Liquidated Damages

In case of default, the Corporation shall charge liquidated damages on the amount in default, for the period at rates applicable, presently these are:
The rate of liquidated damages (penal interest) in case of default on all existing as well as future loan A/cs. (excluding all GB schemes ) w.e.f. 1.4.2004 would be as follows:

Particulars	Loans upto Rs. 2.00 lacs	Loans above Rs. 2.00 lacs but upto Rs. 10.00 lacs	Loans above Rs. 10.00 lacs
For general Loan Cases	NIL	2.00%	3.00%
For good borrowers and potential good borrower cases	NIL	2.00 %	2.00%

The borrower shall further agree and authorise the Corporation to Charge interest at such higher rate as may be reviewed and revised by the Corporation from time to time consequent upon change in the rate of interest by IDBI/ SIDBI on refinance against the aforesaid loan.

The borrower shall also agree to pay the interest tax and also other levies as may be made applicable by the Government from time to time during the currency of aforesaid loan.

Security

The loan will be secured by an Equitable Mortgage of land / buildings and/or hypothecation of plant & machinery to cover by way of first charge on all existing and future assets (excluding raw materials, stock-in-trade and finished and unfinished goods) of the concern/company. The concern/company shall execute and register in favour of the Corporation a Mortgage Deed in the form prescribed by the Corporation where equitable mortgage is not possible.

The Corporation shall also have its first charge on the book debts, outstanding moneys, receivable claims, bills, contracts, marketable securities, investments rights and other assets also like the uncalled capital and goodwill of the concern/company, but the concern/ company shall be at liberty to obtain working capital loan from any bank against the security of the liquid assets and in that case the charge of the Corporation shall rank subsequent to the charge of the bank providing working Capital loans to concern / company.

A negative charge on the stock of machinery stores, machinery spares shall be kept by the Corporation.

The concern/company shall not create any further encumbrances on its assets mortgage to the Corporation without prior permission of the Corporation in writing.

In the event of fall in the value of the assets mortgaged, hypothecated or assigned to the Corporation and the value of such assets not providing the stipulated margin during the currency of the loan; the concern/company shall be required to furnish such additional security as may be considered reasonable by the Corporation.

The lease of land/premises shall be assigned in favour of the Corporation.

The concern/company shall put plate and also write on the machines the words: “Hypothecated to the Rajasthan Financial Corporation.”

The assets offered in security shall be evaluated by the Corporation.

The title of the concern to the properties offered in security shall be examined by the Corporation and loan will be disbursed if the title is found to be clear and marketable.

Insurance

In case of fire prone industries (as may be specified by the Corporation from time to time), the entire assets to be mortgaged to the Corporation shall be insured for their full value as may be determined by the Corporation at its sole discretion during the currency of the loan against fire, cyclone, natural calamities or such other risks as may be regarded appropriate by the Corporation with approved Insurance Companies including LIC in the joint names of the Corporation and the concern/company and should ascertain the usual mortgage clause. As regards the existing insurance policies, the same shall be assigned in favour of the Corporation. All such policies will have to be deposited with the Corporation.

Guarantee

Such Directors of the company as may be required by the Corporation shall give personal guarantee in their individual and several capacities for repayment of the term loans with interest and other charges due thereon. The guarantors shall undertake not to charge any fee or commission directly or indirectly from the company for giving such guarantees to the Corporation.

Approval of Plans

The plan of buildings to be constructed shall be got approved by the authority concerned (Director of Industries/Rajasthan State Industrial Development & Investment Corporation Ltd./Local Authority) wherever applicable as per norms of the RIICO/State Govt.

Negative Convenants

Proprietor/Partners shall not draw any amount towards remuneration, interest on capital or on any account in any year till any sum due to the Corporation by way of instalment of interest fallen due in that year remains unpaid.

• The concern/company shall not undertake any trading activity during the currency of the loan.
• The concern/company shall not undertake any new scheme other than the one submitted to the Corporation in connection with the loan sanctioned and approved by the Corporation, nor shall it undertake the expansion of the present capacity of the factory and plant; involving additional expenditure, without prior approval of the Corporation to be obtained in writing.
• The present constitution of the concern/company shall not be changed during the currency of the loan in any way without the prior consent of the Corporation in writing, which the Corporation shall have the right to refuse, or impose such conditions as it may consider essential.
• The concern/company shall not make any modification/alteration/ change/addition/deletion of any of the clause of deed of partnership (in the case of firms)/Memorandum and Articles of Association (in the case of company) without prior written consent of the Corporation and a clause to the effect to be incorporated in the partnership deed.
• The Chief Executive of the limited company shall not be changed without the prior permission of the Corporation.
• The concern/company shall not let out or give on lease or licence whole or any portion of land and /or building to any one without the prior written permission of the Corporation during the currency of the loan.
• The concern/company shall not lend funds to any one nor invest the same in purchase of shares of any other concern during the currency of the loan without prior written permission of the Corporation.
• During the currency of the term loan, the company will not declare dividend at more than 6% per annum without the written permission of the Corporation provided, however, that no dividend shall be declared without the prior written consent of the Corporation so long as any instalment of principal money or interest due payable to the Corporation remains unpaid. (Applicable in the case of Limited Companies).
• The concern/company shall not enter into any sales/purchase/agency arrangement in respect of its products without the specific written approval of the Corporation. The terms and conditions of such appointment, if agreed to, also be subject to the approval of the Corporation.

Undertakings

• The concern to give undertaking that any short fall in the resources for the completion of the scheme (including over-run) shall be met by the concern from its own sources.
• The company shall give an undertaking not to allow transfer or dispose of shareholding in the company without the prior approval of the Corporation in writing.
• The promoters shall give an undertaking to arrange for the amount of central/state subsidy till such time it is made available to the project. The gap in subsidy, if any, to be borne by the promoters out of their own sources.
• Any dealings between the sister concern of the concern shall be purely on commercial basis and at the prevailing market price.
• The concern to form a suitable recruitment policy in such a way so as to give due representation to the persons belonging to SC and ST in their organisation in all cadres and inform the Corporation every half- yearly (January-June/July-December) the number of vacancies created/sanctioned in all cadres and the number of SC/ST members recruited.
• The company to give an undertaking that its Registered office will not be shifted out of Rajasthan during the currency of the loan of the corporation, without prior written permission of the Corporation (applicable in the case of Company only).
• The concern to give an undertaking to plant minimum two trees for each lakh of rupee term loan in the campus of their unit. In case it is located in rental premises or where no land is available, the concern has to plant trees at any other suitable place.
• The concern to give an undertaking that it shall get their annual Accounts audited by the Chartered Accountant of at least five years standing and also that it shall submit their Audited Accounts to the Corporation, every year at the end of their accounting year (applicable where the sanction of financial assistance exceed Rs.10.00 lacs.)
• The concern/company to give an undertaking "that the concern/company shall obtain necessary certification from Bureau of Indiaan Standards (BIS) for the product as per Government notofication/guidelines".
  

Rights of the Corporation

• The Corporation shall have the right to cancel the unavailed amount of sanction, if the loan is not availed of fully within a period of 6 months from the date of sanction. In case Corporation decides to disburse the loan after expiry of such period the Corporation will have the right to modify terms & conditions particularly rate of interest.
• The Corporation shall have the right to display its sign board at some conspicuous place in the factory to the effect that entire land, place, all buildings, machinery, spares and accessories are mortgaged to the Corporation by way of security for the repayment of loan.
• The corporation & SIDBI shall have the right to call for records, ask for periodical returns and inspect the unit.
• The Corporation shall have the right to appoint a director on the company’s Board of Directors. Such Director being non-rotating is not liable to hold any qualifying shares. The nominee will also have a right to attend the meeting of the committees if any constituted by the Board (Applicable in the case of companies only).
• In case of any dispute among the partners, the Chairman and Managing Director of the Corporation or his nominee will be the sole arbitrator and his decision will be binding on them. (Applicable in the case of partnership firm)
• The company/concern shall submit consent letter before execution of loan documents to the effect that they have no objection to our furnishing to SIDBI all such information as SIDBI may require from time to time and also for inspection of the units by SIDBI during the currency of loan of the Corporation.
• Any other terms and conditions as may be decided by the Chairman and Managing Director after personal discussions with the representative of the concern/company.