Employee Handbook _Master_

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKKPCL EMPLOYEE HANDBOOK 1

KIRLOSKAR PNEUMATIC CO. LTD. INDEX EMPLOYEE HANDBOOK PAGE NO.CONTENTWELCOME NOTE 5INTRODUCTION 61. THE KIRLOSKAR GROUP 7 1.1. Kirloskar Group of Companies 8 1.2. Our Joint Ventures and Subsidiaries 8 1.3. Kirloskar Institute of Advanced Management Studies (KIAMS) 92. OUR COMPANY 10 2.1. History of Kirloskar Pneumatic Company Limited 11 2.2. Divisions: Products 12 2.3. Vision, Mission, Business Values, HR policy and Employee and IR policy 14 2.4. Regional and Branch Offices 173. YOUR EMPLOMENT 19 3.1. Employee Relations 20 3.2. Equal Employment Opportunity 20 3.3. Business Ethics and Conduct 20 3.4. Conflict of Interest 21 3.5. Outside Employment 21 3.6. Non Disclosure Agreement 214. ATTENDANCE and PAYROLL 23 4.1. Attendance Recording System 24 4.2. Basic Salary/Grade 25 4.3. Annual Increment 25 4.4. Pay Day 25 4.5. Mode of payment 26 4.6. Deductions 26 4.7. Other Formalities 28 4.8. Confidentiality of Salaries 28 4.9. Employment Termination 28 4.10. Administrative Pay Corrections 29 4.11. Employees Provident Fund Scheme, Family Pension Scheme, Employees Deposit Linked Insurance Scheme 29 2

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 325. BENEFITS 33 5.1. Paid Holidays 33 5.2. Leave 34 5.3 Privilege Leave 34 5.4. Leave Accumulation 34 5.5. Wedding Leave 35 5.6. Maternity Leave/ Adoption Leave 35 5.7. Paternity Leave/ Adoption Leave 35 5.8. Compensatory weekly off 36 5.9. Outdoor Duty Allowance 37 5.10. Travel Policy 41 5.11. Leave Travel Allowance (LTA) 42 5.12. Gratuity 43 5.13. Superannuation 44 5.14. Insurance Coverage 44 5.15. Employee Higher Education Assistance Scheme 45 5.16. Bonus 45 5.17 Medical Expenses Reimbursement 45 5.18. Welfare Schemes and Facilities 49 5.19. Formalities on Resignation and Retirement 516. WORKING HOURS and CONDITIONS 52 6.1. Working Hours 53 6.2. Weekly off 53 6.3. Use of Equipment 53 6.4. Canteen Facility 54 6.5. Meal Periods 54 6.6. Use of phone and Courier Systems 55 6.7. Computer and Email usage 55 6.8. Internet Usage 56 6.9. Visitors at Workplace 57 6.10. Service Conditions on Transfer 58 6.11. Security and Intelligence 59 6.12. Dress Code 60 6.13. Smoking 60 6.14. Business Card 617. WORK CONDUCT and DISCIPLINE 62 7.1. Employee Conduct and Work Rule 62 7.2. Progressive Discipline 63 7.3. Personal Protective Equipment 3

KIRLOSKAR PNEUMATIC CO. LTD.7.4. Problem Resolution EMPLOYEE HANDBOOK7.5. Work Place Etiquette 647.6. Taking Company Material outside Factory Premises 647.7. Video-shooting/Photography in Factory Premises 657.8. Workplace Monitoring 657.9. Workplace Violation Prevention 657.10. Entering the Factory during weekly off 657.11. Overstaying at Factory Premise 66 668. EMPLOYMENT STATUS and RECORDS 67 8.1. Employment Categories 68 8.2. Access to Personal Files 68 8.3. Personnel Data Change 68 8.4. Probation Period 69 8.5. Employment Applications 699. EMPLOYEE DEVELOPMENT 70 9.1. Job Description (JD) 71 9.2. Performance Appraisal System 71 9.3. Learning and Development 72 9.4. Work Planning and Review 73 9.5. Reward and Recognition 7410. COMMUNICATION 8211. EMPLOYEE HEALTH CARE and CORPORATE SOCIAL RESPONSIBILITY (CSR) 8512. APPENDIX 89 13.1. Important Official Extension Numbers 90 13.2. Frequently Asked Questions (FAQs) 9113. Road to KPCL HO 95 4

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK WELCOME NOTEI welcome you to Kirloskar Pneumatic family. All my colleagues at KPCL join me inwelcoming you amidst us.This induction manual has been designed to help you and to make you feel comfortable inyour new assignment. It will give you an overview of the company, its values, vision, missionand some information, which will be handy at this stage.Please feel free to contact any of the senior management, executives or colleagues in theHuman Resource Department for any queries that you may have. Their contact numbers areincluded in this manual.I look forward to a long and mutually beneficial association with you and wish you a happyand successful career at Kirloskar Pneumatic Company Limited.Warm WishesAditya KowshikManaging Director 5

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK INTRODUCTIONThe Employee Handbook is designed to acquaint you with KPCL and provide you withinformation about working conditions, employee benefits and some of the policies affectingyour employment. You should read, understand and comply with all provisions of thehandbook. It describes many of your responsibilities as an employee and outlines the programsdeveloped by KPCL in the interest of employees.One of our objectives is to provide a work environment that is conducive to both personal andprofessional growth.This handbook cannot anticipate and cover each and every circumstance or question aboutrules, regulations and policies. As KPCL continues to grow, and if the need arises, KPCL reservesthe right to revise, supplement or change any part of the policies or portion of the handbookfrom time to time as it deems appropriate, in its sole and absolute discretion. However, theemployees can be aware of such changes to the handbook as they occur.HR Team 6

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKThe Kirloskar Group 7

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK1.0. THE KIRLOSKAR GROUPWe are part of an Engineering Conglomerate driving critical Industries. We are Century oldpioneers in our areas of specialization like Engineering, Power, Construction and Mining,Agriculture, Industry and Transport, Oil and Gas and Environment Protection with a range ofworld-class industrial products and turnkey services.We are comprised of 6 major group companies and subsidiaries, each lead by the bestEngineering and Managerial talent in India. In addition to Engineering, we have interests in CivicUtility systems, Information Technology and Communication. Our multi unit, multi product,multi location Conglomerate is built on the plinths of Experience, Expertise, Quality,Innovation and Values in business. Our best play is successful work and creation of newindustrial order where we can provide tailor made solutions to the customers.The name Kirloskar is synonymous with Quality and Dependability in the Engineering Industry.Pioneering industrial revolution in India, Kirloskar group has contributed immensely in everyfield of its operation during its 120 years long journey, and holds a place of repute in theindustry for its good business values and customer focus.1.1. Kirloskar Group of Companies Kirloskar Brothers Ltd. (KBL) Kirloskar Oil Engines Ltd. (KOEL) Kirloskar Pneumatic Company Ltd. (KPCL) Kirloskar Ferrous Industries Ltd. (KFIL) Kirloskar Chillers Pvt. Ltd. (KCPL) Kirloskar Integrated Technologies Limited (KITL) Kirloskar Proprietary Limited (KPL)1.2. Our Joint Ventures and Subsidiaries Kirloskar Ebara Pumps Ltd. (KEPL) Kirloskar Corrocoat Pvt Ltd. (KCPL) Kolhapur Steel Limited SPP Pumps Ltd. Toyota Kirloskar Motors 8

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKAll these companies form the core of the Kirloskar group. Each company is a renowned name inits own area of operation and respected worldwide for its service and products. For usmanufacturing is not just limited to our factory premises and our product. It is also aboutworld-class service.1.3. Kirloskar Institute of Advanced Management Studies (KIAMS)We take equal pride in shaping capabilities of Managers and creating teams of dedicatedhuman beings at our Business School. It is our Education Centre for imparting knowledge to theManagers of tomorrow. 9

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK OurCompany 10

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 2.0. OUR COMPANY2.1. History of Kirloskar Pneumatic Co. Ltd.The doyen of Indian industry Late Shri Shantanurao L. Kirloskar incorporated KirloskarPneumatic Company Ltd. (KPCL) on 27th March 1958. Today it is a well-diversified engineeringcompany. The company started its operations with the manufacture of Air Compressors andPneumatic Tools. New product lines were then added including Air Conditioning andRefrigeration Systems, Marine HVACR, Process Gas Systems and Hydraulic Power Transmissionmachinery. KPCL has the distinction of acquiring advance technologies from world over,adapting them to suit Indian conditions and continuously updating them to maintain thehighest standards of quality and reliability.KPCL has its Head Office and Factory at Hadapsar, Pune, one plant at Saswad (20 Kms fromHadapsar-HO) and one plant in Nasik. Sales and Service offices are situated in major cities inIndia. It was certified for ISO 9001 Quality Systems by the Indian Register Quality Systems(IRQS) in February 1993 and re-certified in 1996, 1999,2002,2005,2008. In the year 2008, KPCLwas certified for Environment and Occupation and Health Management System [EMS (ISO14001) and OHSAS 18001]. KPCL became an IMS certified company in 2012.KPCL's operations are sub-grouped into following three major Strategic Business Units.Hadapsar : ACD - Air Compressor Division : TRM - Transmission DivisionSaswad : ACR - Air Conditioning & Refrigeration DivisionNasik : PGS - Process Gas Division : RR - Road Railer DivisionShare Capital: : 128.4 : 17430 • Share Capital of the Company (Rs. Millions) • Total Number of Share Holders (Nos.) (As on 31st March, 2016) 11

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK2.2. Divisions: Products2.2.1. Air Compressor DivisionReciprocating Compressor Rotary Compressor Centrifugal Compressor Ground Support UnitBusiness Group Business Group Business Group Business GroupHorizontal, Balanced, Electric Screw compressors Centrifugal Air Service Air Trolleys SAT300,Opposed, Piston – oil injected type. Compressors SAT650compressors and packages Accessories like receivers , engineered and packaged– Air Cooled and Water driers & filters by KPCL High Pressure CompressorCooled systems for air and KG – 5H (400 bar)gas applications Diesel Engine DrivenVertical, Piston Type Compressors for water Unified Gas Service Stationcompressors and packages well application (N2)- Air Cooled and WaterCooled systems Diesel PortableCompressors and compressorsExpressers for RailwayBrake System Mobile Air Charging Vehicles Oxygen Trolleys Hydraulic Service Trolley2.2.2. Air Conditioning & Refrigeration DivisionEquipment Business Refrigeration Projects Vapour Absorption ChillerGroup Business GroupKC Series Open Type Chilling Packages with High Pressure Steam FiredReciprocating Compressors Water / Glycol / Brines / (RCW) Air and other secondaryKCX Series Open Type Refrigerants Direct Fired (RCD)Reciprocating Compressors Special Refrigeration Systems for Refineries and Petrochemical industries (API and Non API)PC Series Open Type Marine Refrigeration and High Pressure Steam FiredReciprocating Compressors HVAC (REW)KC and KCX Series Open Screw Compressor Direct Fired (RED)Type Reciprocating Package – KRX SeriesCompressors Concrete Cooling Systems 12

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK2.2.3. Process Gas System DivisionProcess Gas BusinessGroupHigh Speed ReciprocatingCompressor (API 11PCompliant)Low Speed ReciprocatingGas Compressor (API 618Compliant)High Speed Screw GasCompressor (API 619Compliant)CNG Compressor Package2.2.4. Transmission Division Defense Business Group Windmill Business Group 250 kW Helical Step–up Gear BoxRailway Business Group Marine Gear Boxes for NavalTraction Gears and Pinions Ships 1 MW Planetary Gear BoxKirloskar Turbo Reversing Hydro Pneumatic suspensions,Transmission Track Adjusters and Twin Top Rollers for Battle Tanks.Axle Drive Gear BoxesKTC – 100.20 Transmission2.2.5. Road Railer Division 1) Kirloskar Auto Railer 2) Kirloskar Road Railer 13

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK2.3. Vision, Mission Values, HR Policy, Employee and IR Policy MissionWe will demonstrate an EDGE to all our Stakeholders in our offerings for converting /transmitting energy.We will strive to make our Company an employer of choice. Vision ValuesIn an ever changing world one thing that will remain constant is our commitment towards allour stakeholders. Each one of us will be guided by the following values.• Customer Focus Our activities / actions will be focused on enhancing internal / external customer’s satisfaction.• Commitment We commit to achieve our targets / goals. We will be responsible / accountable for our commitment.• Continual improvement We will consciously work to improve our procedures, processes and systems with an objective to improve our business processes• Ethical Business Practices We will be fair in our dealings with all our stakeholders. It will be based on Integrity, Honesty and Transparency. 14

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKHuman Resource Management PolicyKirloskar Pneumatic Company Ltd. (KPCL) recognizes its employees as the most importantstakeholder for its continued growth. Human Resources Management in KPCL shall strive toensure continuous organizational growth by nurturing the strengths of its employees andproviding the environment and opportunity for every individual to rise to his / her highestpotential, identify and achieve his / her personal goals within the frame work of organizational,societal and national objectives. It shall endeavor to uphold the dignity of individuals byrecognizing their contributions and making them feel proud partners in progress, through thefollowing measures. 1. Ensure a high degree of selectivity in recruitment process of employees / trainees explicitly on the criteria of their knowledge, skills and attitudes, to match the individual to the job. 2. Impart induction through classroom modules and shop floor visits, so that individuals are oriented with the company’s mission, vision, values, policies, systems and processes. 3. Provide facilities for all round growth of individuals by training inside and outside the organization through knowledge, skill and attitude based programs. Groom every individual to raise his / her potential in all facets while contributing to attain higher organizational and personal goals. 4. Recognize contributions of employees in time and through appropriate recognition schemes, so as to maintain a high level of employee motivation and morale. 5. Build cross functional teams and promote teamwork as the primary instrument in all activities. 6. Appraisals will be based on measurable targets along with an effective performance dialogue. Promotions will be ethical and impartial. 7. Contribute towards health and welfare of employees by promoting preventive health programs. 15

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK Employee and Industrial Relations PolicyThe company will maintain cordial relations with individual employees (engaged directly orthrough an agency) as well as with the union of the workmen. This is with an objective to makethe relationship complimentary to each other’s growth through joint efforts.The company will therefore, strive to bring all fairness in human management processes,administration of facilities and employee benefit schemes. And it will manage the humanresource professionally so that the employees will always have a feeling of being cared for andto create a sense of fairness and belongingness so that the employees and company will be fairwith each other and will give their best to the latter.We will develop mutual trust through clear understanding of co-existence which will be thefundamental guidelines of working together. We will always respect and recognize each other’srights.The relationship with our employees will be nurtured through frequent interactions andcommunications and will positively respond to all their genuine problems and difficulties. Wewill, therefore, set up a mechanism to identify proactively the issues and or grievances andresolve them at the earliest possible, through discussions across the table within the frameworkof our philosophies, rules, regulations, practices and grievance procedure, without hurtingmutual respect.We will also proactively identify mutual needs of the future and will act upon through jointefforts. We will adopt best work practices and also redesign our own work practices and ethos,systems and procedures, so that after proper training and communication it will be practiced inour day to day working.We will create awareness across the organization, so that individual’s growth will be dependenton organization’s interest and goals at the forefront of all our actions and activities. However,at the same time we will take care of the growth and well being of our employees and otherstakeholders. For excellent performance, we will focus on discipline and adherence to internalrules, which will have precedence over the relationship. 16

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK2.4. Regional and Branch Offices A. Factory locations:Hadapsar Hadapsar Industrial Estate, Hadapsar, Pune-411 013. Tel: (020) 26727000 Fax: 020-26870297 / 26870634Saswad E-mail: [email protected] Taluka: Purandar, District: Pune Tel.: 02115–222403 / 222409. Fax: 02115-222406 E-mail: [email protected] Sr.No.152 – 155 Deolali, Near Railway Traction, Eklahara Road, Nasik Road, Nasik - 422101 Mob : 0253-2459777B. Regional /Branch Sales Offices: Our sales offices are located at following locationsSL. Regional / Branch Office Tel no / Fax no / Email Mumbai (Western Region) Tel: 022-25219500 Fax: 022 – 25202516 1. 1002, Vikas Center, 10th Floor, Dr.C.G.Road, Tel (ACR): 011-46561664 / NR.Basant Cinema, 46561665 / 46561666 Chembur, Mumbai-400 074 Tel (ACD): 011-32946820 / New Delhi (Northern Region) 32981341 / 32981642 / 26429685 Tel (Road Railer): 011-41606222 2. 208, Meghdoot, Tel (Legal dept): 011-41606224 94, Nehru Place Fax (ACR): 011-46561653 New Delhi-110 019 Fax (Road Railer): 011-41606221 Tel.: 040-23260743 / 46 Hyderabad (Reg. Office) Fax: 040-23260171 3. S. No.-3-5-907, Flat No.-403 and 404, Tel: 033-22119080 Mahavir Lok, Himayat Nagar, Fax: 033-22116948 Hyderabad-500 029. Kolkata (Reg. office) 4. 15, Ganesh Chandra Avenue Kolkata-700013. 17

KIRLOSKAR PNEUMATIC CO. LTD. Bangalore EMPLOYEE HANDBOOK5. No.120, 1st floor, Andre Capital. (ACD), 8/1 K.H. Tel: 080-22270079 Fax: 080-22270045 Road, Bangalore 560027 Tele Fax: 0522-2627120 Lucknow Tel: 044-281930666. 16, Vidhan Sabha Marg, Fax: 044-28194937 Lucknow – 226001 (U.P.) Tel: 079-27540030 Tele Fax: 079- 27551898 Chennai7. Elcanso Complex, 1st Floor, Tel: 0265-2284604 Fax: 0265-2280095 10, Casa Major Road, Egmore Chennai – 600 008, Tamil Nadu Ahmedabad8. 303, Samruddhi, Opp. Gujarat High Court P.O. Navjeevan, Navrangpura, Ahmedabad: 380014 Vadodara9. 1Tower'A', Killol Children, Hospital lane near Tana apartment, Ellora Park, Subhanpura, Vadodara – 390007All sales offices will remain closed on 2nd and 4th Saturdays apart from Sundays and paidholidays. 18

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK YourEmployment 19

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK3.0. YOUR EMPLOYMENT3.1. Employee RelationsKPCL believes that work conditions, wages, and benefits offered to its employees arecompetitive with those offered by other employers in the industry. If employees have concernsabout work conditions, they are encouraged to voice these concerns openly and directly totheir seniors.We believe that KPCL amply demonstrates its commitment to employees by respondingeffectively to employee concerns.In an effort to protect and maintain direct employer / employee communications, we conductperiodic communication sessions with the employees and offer opportunities for them speak.3.2. Equal Employment OpportunityIn order to provide equal employment and advancement opportunity to all individuals,employment decisions at KPCL are based on merit, qualification, and abilities. KPCL does notdiscriminate in employment opportunities and practices based on religion, race, color, gender,state origin, age or any other characteristic protected by law.This policy governs all aspects of employment including, selection, job assignment,compensation, discipline, termination, and access to benefits and training.Any employee with question or concern about any type of discrimination at work place isencouraged to bring these issues to the attention of their head of the department or HRDDepartment. Employees can raise concerns / issues with the Head of Human Resource, withoutfear of reprisal. Anyone found to be engaging in any type of unlawful discrimination will besubject to disciplinary action, up to and including termination of employment.3.3. Business Ethics and ConductSuccessful business operation and reputation of KPCL is built upon the principles of fair dealingand ethical conduct of our employees. Our reputation for the integrity and excellence requirescareful observance, in the spirit and letter, of all applicable laws and regulations.The continued success of KPCL is dependent upon our customers’ trust and we are dedicated topreserving that trust. Employees owe a duty to preserve the trust. Similarly, KPCL will complywith all applicable laws and regulations and expects its employees to conduct business inaccordance with the letter, sprit, and intent of all relevant laws and to refrain from any illegal,dishonest, or unethical conduct.Compliance with this policy of business ethics and conduct is the responsibility of everyone,whereas, disregarding / failing to comply with, is taken seriously. 20

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK3.4. Conflict of InterestYou have an obligation to conduct business within time frame that will prohibit actual orpotential conflict of interest. The purpose of these guidelines is to provide general direction sothat employees seek further clarification on issues related to the subject of acceptablestandards of operation, and where KPCL establishes the framework within which businessneeds to operate.Transactions with outside firm must be conducted within the framework established andcontrolled by SBU Heads of KPCL. Business dealings with outside firms should not result inunusual gains for those firms. Unusual gains refer to bribes; product bonuses, special fringebenefits, unusual price breaks, and other windfalls designed ultimately to benefit the employer,the employee, or both.An actual or potential conflict of interest occurs when an employee is in a position to influencea decision that may result in a personal gain for that employee or far of relative from the otherparty, because of KPCL business dealings. Personal gains may result not only in cases where anemployee has a significant stake or receives any kickback, bribe, substantial gift, or specialconsideration as a result of any transaction or business dealings involving KPCL. The SBU Headsof KPCL would seriously deal with such unusual gains.3.5. Outside EmploymentThe employee is not allowed to hold any type of outside employment / assignment as long ashe / she is associated with KPCL as an employee. Similarly, he / she should not receive anyincome or material gain from individual(s) outside KPCL for material produced or servicesrendered while performing their jobs or while in employment.3.6. Non Disclosure AgreementThe protection of confidential business information and trade secrets is vital to the interestsand the success of KPCL. Such confidential information includes but is not limited to, thefollowing examples:• Personal data of any employee• Compensation data of any employee• Pending projects and proposal• Computer processes• Research and Development strategies• Designs and Drawings of related to Products / equipments• Computer program and codes• Scientific data• Marketing strategies 21

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK• Computer lists• Scientific formulae• Technological data• Scientific prototypes• Customer lists• Financial information• Human Resource strategies• New market researchAll employees are required to sign a non-disclosure agreement as pre-condition ofemployment. Employees who improperly use or disclose trade secrets or confidential businessinformation will be subject to disciplinary action, up to and including termination ofemployment and legal action, even if they do not actually benefit from the disclosedinformation. 22

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKAttendance and Payroll 23

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK4.0. ATTENDANCE and PAYROLL4.1. Attendance Recording System1. Every manager at Head Office, Saswad and Nasik Plant will register their biometric impressions of both hand index fingers in Time Office.2. There are 11 different points inside the factory premises at Hadapsar where Biometric Time Recording Terminals (TRTs) are installed, which are centrally connected to the Main Server. Employee will have to register his / her bio-metric attendance everyday at the designated terminal informed at the time of joining.3. If any individual is required to proceed out of the factory premises while on duty or Tour, for company’s work, he / she should apply in Oracle – KPC-Employee Self Service which should be subsequently approved by his / her supervisor. While going out and coming in he / she should register bio metric attendance4. Employee should apply for leave / OD / TD through Oracle based Electronic Leave Management system. The same module can be utilized to know current status of leave balances and employee attendance.5. In case of first half Casual leave employee should necessarily apply in advance (earlier day) and on resuming duties he / she should register attendance in the biometric attendance reader. However, in such case the incoming punching of the manager who are in non flexi shift, must be before 4 hours prior to closing of the shift (e.g. for general shift 8.00 to 16.30 incoming punching should be at or before 12.00 noon). and the incoming punching of the manager who are in general shift, and availing 1st and 3rd / 2nd and 4th Saturday off must be before 4.5 hours prior to closing of the shift (e.g. for general shift 8.30 to 17.30 incoming punching should be at or before 13.00) in case of the employee in flexi shift.6. In case of availing second half day Leave the employee should follow the following steps. a) Employee should apply through KPC Employee Self service module which should be approved prior to leaving time of half day and Register bio-metric attendance while going out of the factory. In this case also physical presence of post half day is must.7. Every individual should verify attendance as per the following procedure a) Time office sends an e-mail twice in a month to check the attendance record on oracle. b) After receiving the e-mail from time office every employee needs to verify individual attendance on oracle, showing date wise, shift, in and out timings, leave status and attendance. c) Should bring discrepancies if any, to the notice of the Time Office within 2 days after receiving the e-mail and get it rectified as early as possible. It is the responsibility of every employee to attend the duty on / or before the scheduled time every day. 24

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK8. For employees who are not in flexi shift, late coming is subject to the deduction from salary as following:SL. LATE DEDUCTIONa. After the grace period of 10 minutes, up to and including 30 Half an hour minutes from the scheduled shift in time.b. More than 30 minutes but less than 60 minutes from the One hour scheduled timec. At exact 60 minutes from the scheduled shift in time Half dayd. More than 60 minutes from the scheduled time Full day9. Managers who are not in flexi shift are allowed to come late up to 10 minutes on maximum 3 occasions of a payment month.10. The staff in flexi shift is allowed to attend maximum one hour late than scheduled shift start timing but in such case he / she have to work till scheduled shift of 8.5 hours (for those who are not entitled for 1st and 3rd or 2nd and 4th Saturdays as additional weekly off) and 9.0 hours (for those who are entitled to 1st and 3rd or 2nd and 4th Saturdays as additional weekly off).4.2. Basic Salary / GradeFor every level of employee, the company has introduced different salary grades andcorresponding allowances which an employee is entitled to receive. The salary as well as gradeof employee is mainly determined on the basis of the background of the candidate i.e.qualification, experience, salary drawn and company policy prior to offering employment.4.3. Annual Increments:Those who have joined before 1st October of the preceding year are granted annual incrementafter completion of Annual Performance Appraisal and will be effective from 1st April everyyear. Those joining between 1st October and 31st March will be given a pro-rata increment.Effective from the date of resignation and/or termination you will not be eligible for annualincrement. Annual increment will be given to those who are on the roll of the company on theday of disbursement.4.4. Salary calculation month and Payment DayThe month for calculation for the salary is considered from 25th day of each month up to 24thday of next month. To avoid discrepancies in salary payments, every employee has to ensurethat their leave applications, on-duty applications, tour extension memos, salary discrepancies 25

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKetc. are applied and approved in the system on or before 24th of the month. The date ofpayment will be 1st of every month.4.5. Mode of paymentEmployees are required to open a Savings Bank A/c with the ICICI or HDFC Bank. The HRDepartment helps to open such account for the employees working at HO, Saswad and Nasik.The salary gets deposited for the salary month as mentioned above on first day of the nextmonth into the individual bank account. The pay slip contains the earnings / statutory and otherdeductions for the month as well as year to date from April under different heads. Employeesworking at sales office are paid through the banks; their respective sales office decides thepaying banks.The individual pay slips can be accessed through Oracle showing Gross and net salary for themonth. Employee can print the pay slip for their record.4.6. Statutory Deductions Income Tax: Every employee has to inform his individual Pan Card No. to Finance / Cash Department at the time of joining the organization. The company will deduct Income Tax at source from the salary if it becomes deductable as per legal provisions of Income Tax Act, 1961 and will deposit the same in individual Pan Card No of Income Tax. Provident Fund: An amount equal to 12% of Basic Salary is deducted as per the provisions in Provident Fund Act, 1952 from the salary and deposited in individual PF Account as Employee’s contribution of PF.4.6.1 1. Professional Tax: The company will deduct and deposit the State level Professional Tax as per provisions in thesaid Maharashtra State Professional Act and Rules, 19754.6.2. Employee State insurance (ESIS): The company will deduct and deposit the employee contribution in respect of theemployees whose gross salary per month is less than Rs.15000/- per month @ 1.75% of totalearning of the month as per ESIS Act and Rules, 1948. The coverage under ESIS as mentionedearlier will be determined twice in a year i.e. considering the rate of pay for the month Apriland October every year and if he / she are covered in the said month they will be coveredcontinuously for next six months. 26

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK4.6.3. Co-operative Credit Society:A confirmed employee can become a member of Kirloskar Pneumatic Credit Co OperativeSociety having its registered office within company premises wherein; a fixed amount of Rs.500/- is deducted as Society Share from the salary every month and which is accumulated intohis account in the Credit Society till separation from KPCL.Some of the benefits provided by the Co-operative Credit Society are as mentioned below: 1. Savings:- - Recurring Deposit Scheme for 1 Year interest @ 10 % p.a. - Fixed Deposit Scheme for 6 to 11 Months @ 8.5 % p.a. & for 12 Months 9 % p.a. 2. Loans – Reducing Balance Method - Regular Loan maximum of Rs. 6,50,000/- on 100 Installments & interest @ 11% p.a. - Medium Term Loan of Rs. 50,000/- On 50 Installments @ 11% p.a. - Emergency Loan maximum of Rs.20,000/- on 12 installments @ 11% p.a.**** (Loans are sanctioned on the basis of completed service years, Total Salary & 6 Times ofTotal Share Amt.) 3. Other Benefits - Dividend paid at 15% p.a. on Share Balance of 31st March for every year. (Maximum limit of Total Shares is Rs.50,000/-) - Society gives GIFT to each Member on Society Anniversary Day every year. - Society aid up to Rs.5,000/- for major decease for member & his spouse - Member death benevolent fund of Rs. 19,000/- approximately. - Society will issues a calendar & diary/Gift to all members at every New Year. - Yearly group Janata Personal Accident Policy insurance of each member for Rs. One Lac premium paid by Society. - Felicitation programme for Scholar students every year. - Complete membership of 15 year & member Retires then Felicitation (Satkar) programme. We gives Shawl, shreephal & Gift.4.6.4. Life Insurance Premium under Salary Savings Scheme:The employee who wishes to deposit the premium of his / her policy has to transfer his / herPolicy to LIC of India, Magarpatta Road, Office No (95M), Kanchanjunga Apartments, HadapsarPune 411028. After which he has to fill the prescribed Form of Salary Saving Scheme of LIC. Thesaid LIC Office will forward the SSS Form along with policy details and amount to be deductedand deposited with LIC to the Company. Accordingly deductions will be made through salaryand will be deposited in LIC Pune (95M) every month. This is applicable for monthly payment ofpremium of the policy and not for quarterly, half yearly or yearly payment mode of the LICpremium. 27

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK4.7. Other FormalitiesIn the month of April, each year, the employee has to submit to the Finance department aprescribed Declaration Form for Income Tax Computation for the financial year (April – March).In this form the employee would have to declare the Tax saving investments she / he would bemaking. This is required for calculating the tax liability of an employee and deducting the samefrom the salary. The employee has to attach proof of actual investments with the said Form thisprocess can be completed before 7th of January of next year. Proofs will not be accepted afterthe cutoff date (except for LIC premium, Mutual Fund Investment and Infrastructure Bondswhere the investments are open only after 7th January).The Income Tax once deposited to the Government cannot be refunded in any case. Suchrefunds can be claimed while submitting the individual Income Tax Return.For further queries employee can contact the Finance (Cash) department.4.8. Confidentiality of SalariesSalary is a very private and confidential subject. The staff concerned with salary administrationhas been directed to maintain strict confidentiality of employee salaries. In order to maintaincomplete confidentiality, employees are also advised not to divulge or disclose details of theirsalary to peers, colleagues or subordinates or any other person with the organization otherthan with the concerned HR staff.4.9. Employment TerminationThe employment can be terminated by either side as per period of Notice mentioned in theappointment letter / prevailing rules / authentic communication. In case employee wishes to berelieved earlier than the notice period he / she will have to remit salary for the Notice Period.The management has sole discretion for the same. Also the employment termination can beeffected as per the clause of retirement age mentioned in Appointment letter and / or anycommunication / rules (existing or will become in force in future). Company can terminate theemployment in case of prolonged unauthorized absence without intimation to the Company /departmental Head / Time Office as disciplinary action. In such case the name of the personconcerned will be removed from the muster roll from the next day of his / her last physicalpresence in the company.Termination of employment is an inevitable part of HR Department activity with anyorganization and many of the reasons for termination are routine, below are examples of someof the most common circumstances under which employment is terminated.♦ Resignation — voluntary employment termination initiated by an employee.♦ Exit — involuntary employment termination initiated by an employee.♦ Lay off — involuntary employment termination by the organization for non- 28

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKdisciplinary reason.♦ Retirement — voluntary employment termination initiated by the employee meeting age, length of service, and any other criteria for the retirement from the organization.♦ Termination – Termination of services is done in case of non-performance, loss of integrity, misconduct, absenteeism wherein an employee is terminated from the services of the company as per the clause mentioned in the appointment letter4.10. Administrative Pay CorrectionsKPCL takes all required steps to ensure that employees receive the correct amount of pay ineach pay cheque and that employees are paid promptly.The individual attendance / time recording can be seen on Oracle for them who are havingindividual Intra-net log in on computers. Besides this Employee has to check the same and hasto bring to the notice of the Time Office for any discrepancy in the attendance records.In unlikely event that there is an error for pay, the employee should promptly bring thediscrepancy to the attention of the HR Department so that corrections can be made and loss ofpay is regularized in next payroll.4.11. Employees Provident Fund Scheme, Family Pension Scheme, Employees Deposit LinkedInsurance Scheme o Eligibility of membership:The employee on roll becomes member from the first day of his / her joining as per provisionsof The Provident Fund Act, 1952 (Amended) applicable to our company. If the employee joiningcompany is PF member in earlier company and has not withdrawn the PF accumulation, he /she can transfer the earlier PF by filling Form No 13 to new account generated in the company. o The contribution – PF and FPF:The monthly contribution payable by employee under the fund is @12% of individual’s Basic.The monthly contribution payable by employer under the fund is @13.36% of his / her Basic.The employer contribution at the rate of 13.36% of Basic payable for the month is deductedtowards the PF and FPF. The contribution is bifurcated @ 8.33% towards EmployersContribution to Pension and 3.42% towards Employers Matching contribution and theremaining 1.36% is deposited towards Admin charges PF, Admin charges, EFP and EmployeesDeposit Linked Scheme. The PF and FPF schemes are administrated by Provident Fund 29

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKCommissioner’s Office, Pune at Cantonment Building, Golibar Maidan, Shankarsheth Road,Pune: 411001. o Nominations:Once the employee becomes a member, he / she shall declare the nomination by filling up theNomination Form No. 2 in the name of father or mother if the member is unmarried. If memberis married then the nomination should be in the name of member’s spouse. Any change inNomination due to Marriage / death or any reason the member has to submit Form No. 2 by re-filling the same through the company. For changing the nomination, The Form No 2 is to befilled carefully for which specimen form duly filled is available with HR Department. o Advances against accumulated amount in individual Provident Fund Account:While in continuation of membership, the employee can apply for advances, which are grantedfor different purposes as per the rules / provisions as of Provident Fund Act and rules, 1952. Forfurther query (if any) member can contact HR Department. o Transfer of PF and FPFPF and Family Pension Fund is required to be transferred from one employment to anotheremployment (from one company to another company) if there is no break of clear 60 daysbetween two employments. The transfer is not optional for an employee, provided there is noclear 60 days unemployment period between two consecutive employments. o Total Withdrawal:On superannuation or retirement or if the employee leaves services of a company and remainsunemployed for more than 2 months’ period and if the member gets employment in foreigncountry, the member is eligible to withdraw the total amount accumulated in his / her PFAccount with interest towards the PF and FPF. However, in case of next employment, he / shewill have to become member of PF again from the 1st day of subsequent employment. o Family Pension Fund:This scheme is applicable to all employees who were a member in 1995 and / or becamemember 1995 and thereafter as per Provident Fund Act, 1952 (Amended). This fund isadministered through the employers’ contribution of 13.36% of actual basic salary. The amountequal to 8.33% out of 13.36% of employers’ contribution is credited in employees ProvidentFund pension account. 30

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKUnder this scheme Manager is eligible for the monthly pension after retirement based on lastdrawn salary (Basic) and the pensionable membership after 1995. The employee also can optfor partial (reducing) pension at the age / after the age of 50 years.The member cannot withdraw the pension amount after consecutive 10 years membership ofProvident Fund. However the same can be withdrawn if the PF membership is less than 10years.If PF pensioner dies after opting for pension the nominee nominated by the pensioner (earliermember) can avail the pension till his / her death after completing formality with PF Office.In case of death of member, the nominee nominated by deceased member can claim the PFamount of the deceased member and the spouse is eligible to claim monthly widow pension aswell as monthly orphanage pension for children till the limit of the age specified in the Act, inaddition to the PF amount.If the Member wants to withdraw his / her PF either on retirement or on leaving theemployment, he / she may apply for withdrawal of PF as well as FPF by feeling form no.19 forPF, and form no 10 C for FPF. However the employee will be paid his / her PF accrued till thelast payment of PF and FPF by way of a lump sum amount as per the formula revised from timeto time. o Employees’ Deposit Linked Insurance:This is the third scheme under the employees’ PF and Misc. Provisions Act 1952. When anemployee becomes a member of PF, he / she is automatically enrolled and covered under thescheme. The benefit under the scheme accrues only when an employee dies during the courseof employment. The contribution towards this scheme is contributed by employer as detailedearlier. If the provident fund account is transferred the date of membership to this scheme getsautomatically transferred.KPCL has exempted EDLI (Employees’ Deposit Linked Insurance) scheme (operated through LIC).Under this scheme an amount of Rs. 100000/-is paid to legal heirs of the deceased member. 31

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKBenefits 32

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 5.0. BENEFITS5.1. Paid HolidaysEmployees are given 9 paid holidays in a year, out of which 2 days are common all across; 1 day(birthday) is individual-specific and the rest 6 days are location specific1. Republic Day - 26th January2. Independence Day - 15th August3. Birthday HolidayBirthday Holiday: To be taken on your birthday as per the company official record. If birthdayfalls on a Weekly Off / Paid Holiday, the same can be taken one day prior or after the WeeklyOff / Paid Holiday. If Birthday falls on Leave or Privileged Leave, it will lapse5.2 Leave (Combined CL and SL) 1. Employees are entitled for Leave of 10 days in a calendar year. 2. Leave should be sanctioned in advance. 3. Employees joining in between the year i.e. later than 1st January are entitled for Leave on pro-rata basis. 4. Leave can either be prefixed or suffixed to Weekly Off, Paid Holiday or Privileged Leave. 5. Paid Holiday / Weekly Off falling in between the Leave period shall not be treated as Leave. 6. Leave is for the calendar year and it can be accumulated up to 20 days. If this accumulated Leave at the end of the year is more than 20, then it will lapse. 7. The accumulated Leave can be used only in case of sickness for half / full day. 8. Employees absent on ground of sickness for 3 or more days should submit a medical certificate issued by a Registered Medical Practitioner upon resuming duty. The certificate should clearly mention the reason of sickness; which should be subsequently endorsed by our OHC Head at Head Office. 9. To meet sudden exigencies one can avail 2 hrs of Short Leave for a maximum of 2 occasions in a month. Short Leave will be deduced from the Leave at the rate of 0.25 days per Short Leave. Short Leave cannot be availed from accumulated balances. 10. Leave can be taken for 2 hours, half day (1st half or 2nd half), full day or multiple days. 11. For a probationer, Leave is granted @ 5 days for every 6 months worked. 12. f all leaves are exhausted and employee remains absent then it will be treated as “Leave Without Pay”.5.3. Privilege Leave (P/L) 1. Employees are entitled to get P/L of 30 days for having worked at least 240 days in a calendar year. 2. P/L can be availed for multiple occasions every year. 33

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK3. P/L can be prefixed or suffixed with Leave (2 hours, half day, full day).4. P/L can be availed for a minimum period of 1 day. To avail LTA, minimum 3 days P/L to be taken.5. In case P/L is more than 2 days, the employee should get it sanctioned from Department Head at least 7 days in advance.6. Any extension in the P/L must be sanctioned well in advance before the expiry of the leave period.7. P/L application can be refused considering the exigency of work by Department Head / Factory Manager / SBU Head.8. Employee is encouraged to avail of 20 P/L in a calendar year or else un-availed P/L up to 20 days will lapse.9. Only 10 P/L will be encashed above the accumulation limit.10. P/L encashment if any will be at the rate of one’s basic pay; the same will be disbursed in the month of February.11. Paid Holiday / Weekly Off falling in between the P/L period shall not be treated as P/L.5.4. Leave AccumulationEmployees are entitled to get Leave accumulation and Privilege Leave accumulation as per therate applicable, as follows: Grade Leave accumulation Privileged Leave accumulation58 and above 20 days 120 days5.5. Wedding Leave 1. All employees are entitled to get 3 days Leave for their own Wedding on one occasion. 2. Paid Holiday / Weekly Off falling in between the Wedding Leave shall not be treated as leave. 3. Wedding Leave can be prefixed or suffixed to Weekly Off, Paid Holiday, Leave or Privileged Leave. 4. The employee should get his / her Wedding Leave sanctioned by Departmental Head at least 7 days in advance.5.6. Maternity Leave / Adoption Leave 1. Lady employees are entitled to Maternity Leave of 180 days. All benefits under Maternity Benefits Act 1961 are applicable. 2. Lady employees are entitled to Adoption Leave for 90 days. 3. Paid Holiday / Weekly Off falling in between the leave period shall be part of Maternity Leave / Adoption Leave. 34

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 4. These leaves can be availed on two occasions only.5.7. Paternity Leave / Adoption Leave 1. Male employees are entitled to Paternity / Adoption Leave of 3 days. 2. Paid Holiday / Weekly Off falling in between the leave period shall not be treated as leave. These leaves can be prefixed or suffixed to Weekly Off, Paid Holiday, Leave or Privileged Leave. 3. These leaves can be availed on two occasions only.5.8 Compensatory off (C/Off) for working on Weekly Off 1. All operating engineers in the grade 58 – 60, working on a Weekly Off for which the in and out time is recorded in attendance system by individual for full day can avail compensatory off within next 1 month. 2. C/Off must be taken before the 20th of a month and it cannot be clubbed with any other Leave. 3. C/Off cannot be accumulated and will lapse if not taken within one month.Interpretation of this policy is at the sole discretion of the Management; the same shallremain final and binding on all employees.5.9. Outdoor Duty AllowanceTo set guidelines for reimbursement of expenses - on Food and local conveyance to Managers,who are on outdoor-duty. The policy is applicable to all Managers in grade 58 & above.Managers, who are required to work on outside duty (OD) locally in connection with businessrequirements, will be eligible for the following: 35

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK1.1 Reimbursement for expenses on eatables (lunch / dinner) at actual - with supportingoriginal bills up to a limit of Rs.150/- (Rupees One Hundred & Fifty only) per head/ per meal /per day (a day = 9 hours).1.2 Usage of Own Vehicle (two wheeler / four wheeler) for Official Duty – Reimbursement ofExpenses (Not Applicable for managers in the grades of 66 and above) Four Wheeler - Rs. 9.00 per KM; and Two Wheeler - Rs. 3.00 per KM1.3 Managers must travel by their own vehicle / public transport for any work totaling upto100 Km travel from Factory or Branch office. However when one has to travel more than 100Km from Factory or Branch office, he/she may request for a taxi by sending an e-mailrespectively to the “Transport sections” at Hadapsar or Saswad, Branch Admin in respectiveBranches with a copy to his/her HOD, at least a day in advance and he/she has theresponsibility with checking with ‘Transport-Section’ at Hadapsar or Saswad; Branch Admin inrespective Branches, regarding availability of the same.1.4 Reimbursement of local auto / taxi fare will be allowed only when one is carryingcompany’s material for an emergency situation. However, Auto / taxi fare ‘waiting fare-charges’will not be allowed but in genuinely exceptional cases, approval may be sought from the BU /Functional Heads. Such claims of But such claims of Auto / taxi fare ‘waiting fare-charges’ mustbe discouraged at all the time and for employees of all levels.2. Reimbursement amount (mentioned as above) for Four Wheelers / Two Wheelers, coversall the related expenses. Toll, parking fee etc. will be reimbursed only if supported by originalreceipts. However any type of ‘fine’ levied by the Government authorities – including trafficpolice will not be reimbursed.2.1 Managers may choose to a taxi for airport drop from Factory or Branch office to theairport. In this case he / she will have to send an email to the “Transport sections” at Hadapsaror Saswad, Branch Admin in respective Branches with a copy to his/her HOD, at least a day inadvance. In such a case it is important to mention here that he / she has the responsibility ofchecking with ‘Transport-Section’ at Hadapsar or Saswad; Branch Admin in respective Branches,regarding availability of the same. Allotment of the car will be at discretion of the HOD.2.2 Though all employees are covered under insurance while on duty, all are requested tofollow safety rules while driving their own vehicle. In case of any untoward incidence, resultingfrom one’s flouting traffic, road safety norms, support from Management will be ‘limited’ if atall.2.3 It is also apt to mention here that commuting expenses towards attending a local trainingprogram will be reimbursed only when the total distance travelled, is more than 40 km fromone’s residence or from the office. 36

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK2.4 Interpretation of the policy will be at the final discretion of the Management.5.10. Travel Policy1. To set guidelines for reimbursement of expenses - on lodging and boarding to Managers, while travelling outstation within India.2. All Management staff in Grades 58 to 68 on permanent rolls of Company is covered under this policy. The tenets of this policy shall also be applicable to those who are directly / indirectly engaged by the Company in form of company contract and retainers.3. Domestic Travel means travel undertaken for company work beyond the Head Quarter / Branch office Town and where the return to Head Quarter / Branch Office town is on the same day or any subsequent day. 3.1. Travel to satellite townships e.g. Panvel / Ambernath / Thane for Mumbai and Gurgaon / Noida / Greater Noida / Ghaziabad / Faridabad for Delhi will not constitute Outstation Travel for the purpose of Lodging and Boarding Allowance.4. Advance: A reasonable amount against expected expenses on a tour can be taken as advance on approval of concerned Head of the Department. 4.1. One has to be careful enough while on tour all the time - so that there is no loss, theft and/or damage of one’s belongings. However in an unfortunate case of a Manager facing such a situation, the onus of managing the same lies with him/her.5. Travel Booking: 5.1. Employees who will be travelling henceforth ( Domestic Travel ) are required to fill up their tour & travel information through Online application KPC Tour & Travel Application available on Oracle only. 5.2. This online application is an end to end application from Tour sanction > Travel Booking> Travel Expenses Bill. 5.3. All Air / Rail bookings will be done by Travel Desk on the basis of approved tour itinerary filled in by the employee through this application only 5.4. Journey should be planned in advance and certainly through the shortest route. 5.5. Whenever the booking is made by the travelling employee, proof of purchase in the form of credit card slip and / or air ticket jacket and / or copy of original railway ticket or the serial number with berth / seat number and coach number shall be required to be submitted. 5.6. Air travel to a city within 300 kms, isn’t permitted to anyone unless one has to take a connecting flight or no other option is available.For more details, visit Policies tab on Shashwat 37

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOKhttp://apps.kpcl.net:8000/OA_HTML/KPC/Shashwat/HTML/service_function/HR/policies.html6. Accommodation: When on tour, the place of lodging should be so selected as to keep the local conveyance expenses to the minimum. Though there is no restriction on employees to stay in any particular hotel, as long as its tariff is within permissible limits of their actual lodging allowance, it is expected that people would use their discretion in choosing an economical place. If employees happen to get good discount and better tariffs they are requested to inform local branch office / Ticket Booking Department about such Hotels. Ticket Booking Department is advised to maintain a database on hotels so that an employee can select the most economical place near the area of work. 6.1. There may be instances when one can make his/her own private arrangement of stay.7. Allowances (maximum limit) Entitlement of allowances is given in ‘Table 1’ 38

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK Table 1Designation Jr.Officer / Jr Engineer / Sr.Officer / Sr.Engineer / Manager /Sr.Manager / GM/ AVP/ VP Officer /Engineer Asst. Manager DGMGrade 58, 59 &60 61 &62 63 , 64, 65 66 , 67, 68 Bus Bus Bus /Taxi Bus /Taxi 3 Tier /2Tier /Chair car AC 3 Tier /2 Tier /Chair car AC 3Tier /2 Tier / Chair car AC 1 AC/Chair car ACInter cityTravel by EconomyAir onSBUHead EconomyAir onSBUHeadLocal Travel Economy Air Economy Air approval approval Taxi Auto/ Metro/Trametc. Auto/ Metro/ Trametc. Taxi (Taxi byexception) (Taxi byexception) ‘A’ Cities (Delhi / NCR, Mumbai /Navi Mumbai, Kolkata, Chennai, Pune, Bangaluru, Hyderabad,Ahmedabad)Lodging(Hotel bills includingtaxes) 3500 4000 5500 ActualBoarding(Foodbills) 550 625 1000 ActualMiscellaneous (Withor withoutbills) 100 125 150 200Local Conveyancewithor withoutbills) Actual Actual Actual Actual Other Cities(Citiesother than'A' cities)Lodging(Hotel bills includingtaxes) 2500 3000 4500 ActualBoarding(Foodbills) 400 500 800 ActualMiscellaneous (Withor withoutbills) 100 125 150 200Local Conveyance Actual Actual Actual Actual Private StayFixed allowance 550 625 1000 2000Miscellaneous (withor withoutbills) 100 125 150 200Local Conveyance(withor withoutbills) Actual Actual Actual Actual Same DayReturnFood (with bills) 550 625 1000 2000Miscellaneous (Withor withoutbills) 100 125 150 200Local Conveyance(withor withoutbills) Actual Actual Actual Actual StayOnOffshorePlatform/ShipOnHighSea(Thiswill beapplicableonlywhenthe ship/sub-marineisonhigh-seasandnot onthe coast)Fixed allowance(without bill) 1000 1200 1500 - LongContinuousStayPer Month(AuthorizedbyHoD/BU/SBUHeadasper the conditionsat the site)Fixed allowance(without bill) 18000 22500 - -7.1 Lodging (hotel) and the boarding (food) bills to be within the prescribed allowances.7.2 Miscellaneous allowance is to take care of expenses towards tips, newspaper, etc.7.3 Employees staying at relatives’ / friends’ home will not claim any lodging allowance. Fixed allowance and miscellaneous allowance can be claimed as per Table 1.7.4 When an employee goes for a conference / seminar, and if lodging and boarding expenses are included in the course fees or borne by KPCL, no separate expenses can be claimed on lodging & boarding for the number of days covered by the conference / seminar. In this case only miscellaneous allowance can be claimed.7.5 A Same Day Return Allowance is paid as per Table 1 when an employee undertakes an outstation journey from Head Quarter / Branch town and returns back to Head Quarter / Branch town with no night stay. Miscellaneous allowance will be paid in this case.7.6 Expenses incurred on tobacco, liquor are not allowed. 39

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 7.7 For the purpose of the Travel policy, a day would be construed as 24 hours from the time of departure till arrival. Allowances can be claimed as follows: Up to 12 hours = 50% of eligible Boarding & Miscellaneous amount Beyond 12 hours = 100% of eligible Boarding & Miscellaneous amount8. Long continuous stay: 8.1 When stay in the city/site is initially planned for 30 days or more and if in between the person visits any other place and returns to the same city/site within 30 days time, the allowance will be paid as per Table 1. If the stay is reduced to less than 30 days, the allowance will be given in proportion to that for long continuous stay as per Table 1. It must be pre-approved by the SBU/ BU Head. 8.2 When stay is initially planned for less than 30 days and subsequently extended to 30 days or more, allowance for the initial period will be calculated as per normal allowance and for the remaining period it will be as per the long continuous stay. It must be pre- approved by the SBU/ BU Head. 8.3 Local conveyance will be reimbursed at actual. As far as possible employee should travel by convenient and economical conveyance available in a city. Employees traveling frequently on local / metro train should take out monthly pass if it is economical. One needs to produce supporting bills in all such local travel, as far as possible and of course surely for amount exceeding Rs.500/- for a particular trip. 8.4 The Fixed Allowance (without Bill) for stay on offshore platform / ship on high sea is payable. Offshore platform and or a ship on high sea will not be treated as a foreign country. 8.5 Medical expenses incurred on tour shall form part of employee’s Medical Policy as per the eligibility. 8.6 Any Manager while on tour should not accept any advance (cash, money) from any vendor, customer, etc. in case he/she runs short of funds. Under such circumstances (if any) one should contact respective Head of Department.9. Travel Expense (TE) Bill: T.E. Bill should be submitted through oracle. T.E Bill should reflect total expenditure incurred in a trip by an employee. Advance for next tour will be given only if previous TE bill is cleared.11. Leave Travel Allowance (LTA) Employee is entitled to LTA every year though it will be exempt (subject to necessary compliance) for tax purposes only twice in a block of four year. Under this Policy the block will start on 1st January 2014 and ends on 31st December 2017, referred as 2014- 40

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 2017 block and tax exemption can be claimed only in the 2nd and 4th years of the block viz., 2015 & 2017. Similarly next block will be of years 2018-2021 and tax exemption can be claimed in 2nd & 4th year of this block and so on. a) Employees can claim taxable LTA for the 1st and 3rd year of the block in the month of January of 2nd and 4th year by applying for it through oracle self service ‘My Info’ before 20th January of the 2nd & 4th year. It will be paid through salary in the month of January as taxable LTA and tax will be deducted as per the income tax rules. b) Employees will be able to claim tax exemption (subject to necessary compliance) on LTA only in the 2nd & 4th year i.e. during 2015 and 2017 in the block of 2014-2017. c) Any balance LTA at the end of 2nd (2015) and 4th (2017) year will paid as taxable LTA in the month of January 2016 & 2018 respectively through salary. d) Employees can club LTA amount for 1st (2014) & 2nd (2015) year and claim for tax exemption in 2nd year (2015) and so on. e) Employees can club LTA amount for 3rd (2016) & 4th (2017) year and claim for tax exemption in 4th year (2017) and so on. Procedure for availing LTA with tax exemption: Employee will be eligible to claim LTA only when he / she proceeds on PL for a minimum period of 3 working days sanctioned in advance as per the leave rules in force. If employee opts for LTA by paying tax, no such requirement of PL is necessary. a) Employee willing to avail LTA should apply leave application 15 days in advance. b) The leave application should specifically mention the absence reason as LTA. c) When the LTA leave commences at the end of the year and spreads over in the following year, the LTA will be treated as it is availed for the year in which the leave commenced. d) If employee wants to claim tax exemption then he / she needs to submit the claim form along with copy of train, air tickets-economy class (with boarding passes) and original tickets / boarding passes for verification to accounts. e) If the proofs submitted is less than the eligible amount, the exemption will be restricted to the amount for which proofs are submitted (amount incurred for hotel, food, 41

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK sightseeing, local conveyance etc are not eligible for claiming tax exemption) and balance amount will be paid as taxable LTA. f) All LTA claims received before 20th of every month to accounts dept. will be settled in that month through Salary. g) The company reserves the right to amend the policy at anytime without assigning any reason whatsoever. The utility and interpretation of the policy will be at the sole discretion of the Management.5.12. GratuityGratuity is paid as per the provisions of The Payment of Gratuity Act, 1972 to those employeeswho have completed a continuous service of 5 years or more and attended minimum 240 daysin each year are eligible to receive Gratuity based on actual last rate of pay of Basic Salary.Gratuity as per Exempted Gratuity Scheme with KPCL:KPCL has exempted Gratuity schemes viz. Scheme No. II and IGratuity payable under Scheme No. I is as per the provisions of The Payment of Gratuity Act,1972. The employee who has completed 5 years of service, but less than 15 years of service,will be paid Gratuity at the rate of 15 days salary for every completed year of service. In suchcase rate per day is calculated based on Last rate of Basic Salary paid, divided by 26 days.Gratuity Payable under Scheme No. IIThe employee in managerial grade 58 to 68 who has completed full 15 years service or more iseligible to receive gratuity @ one month’s salary (last paid actual Basic) for every completedyear of service subject to maximum 25 months last drawn Basic salary.However, the payment of Gratuity under Scheme No. II will be made as under: 1. Gratuity 30 days’ (One month’s) salary per completed year of service or Rs.10,00,000/- whichever is less will be paid within 30 days from the date of actual separation; 2. The balance amount of Gratuity over and above Rs.10,00,000/- is payable in five equal annual installments of which 1st installment will be paid in the month of forthcoming April and remaining in the month of April of subsequent years. 3. The employee has to submit the application for payment of Gratuity on his / her separation. 4. Gratuity becomes payable only under following circumstances: i) Superannuation / retirement ii) Resignation / termination of service iii) Death / total disablement due to accident or disease and subsequent separation. 42

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK However the gratuity will be forfeited for dishonesty with employer’s business or misconduct of moral turpitude.5.13. Superannuation SchemeThis is a non-contributory retirement benefit scheme for the employees in Grade 62 and above,which is administered through The Life Insurance Corporation of India. The company depositscontribution equivalent to 15% of basic salary actually paid to member, under this scheme.The benefits under the scheme are as under:i) On resignation prior to retirement: The employee can withdraw the accumulated Superannuation fund on submission of a withdrawal application addressed to The Trustee, Superannuation Fund, Kirloskar Pneumatic Co. Ltd., Pune: 411013 accompanied with earlier 3 years’ Income-tax returns or Assessment Orders. The Income tax is deducted at source from the withdrawal amount payable to employee, at the highest rate of Income tax deducted in the respective years and remaining amount paid to the employee.ii) On retirement: The employee can withdraw 1/3 share of the accumulated fund tax-free and will get a monthly pension till his / her death, based on the remaining amount. The remaining amount of originally accumulated fund will be paid to the legal heirs of the employee after the death. The pension is dependent on Interest rates declared by LIC of India from time to time based on the accumulated amount.iii) On death: In case of death of an officer while in the service, the entire amount of superannuationaccumulations is paid to his / her spouse / legal heirs in one lump sum.iv) Transfer: If the manager covered under the scheme resigns and joins any other establishment, then he/ she can opt for transfer of the amount, provided the next employer is having same or similarscheme for superannuation.NOTE: Accounts Department looks after day-to-day administration of this scheme.5.14. Insurance CoverageThe employees are covered under Group Personal Accident Insurance for the entitled amountas per the grade while they are in the employment of the company.Benefits:1. The manager can get 1% of the capital sum insured under Table III of the Insurance Plan, per week for his / her absence from duty for loss of wages, maximum up to 104 weeks or the 43

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK sum assured subject to rules and regulations framed by the concerned Insurance company from time to time OR terms and conditions as applicable to the Group Insurance policy2. In case of permanent partial disablement, an officer can get compensation, on the basis of percentage certified by the Insurance Doctor, instead of weekly compensation.NOTE: To avail the benefit as mentioned above, the employee who meets with an accident, hasto inform HR Department at Head Office, mentioning the date, time and place of accident anddetailed description of the accident at the earliest. On receipt of the said information, HRDepartment will inform concerned Insurance Company. On resumption of duties, the employeehas to send to HR Department at Head Office, all the prescriptions, medical bills, x-ray films,Reports, Discharge card form Hospital, if any etc. in original for lodging the Insurance Claim.Claims, which are delayed or made without pre-intimation of accident, are rejected by theInsurance Company.5.15. Employee Higher Education Assistance SchemeKPCL recognizes that the skill and knowledge of its employees are critical to the success of theorganization. Higher educational assistance program encourages personal developmentthrough formal education so that employees can maintain and improve job related skills orenhance their ability to compete for reasonably attainable jobs within KPCL. The details areKPCL will provide educational and training assistance program to its employees.Before going for training, employees must sign an agreement depending upon the number ofdays and the cost of the programme.While training program is expected to enhance employee’s performance and professionalabilities, KPCL cannot guarantee that participation in formal training will entitle the employeeto automatic advancement, a different job assignment, or pay increases.For more details, visit Policies tab on Shashwathttp://apps.kpcl.net:8000/OA_HTML/KPC/Shashwat/HTML/service_function/HR/policies.html5.16. BonusManagers in Grade 58 to 61 are eligible to receive Annual Profit Sharing Bonus. The bonus ispaid minimum @ 8.33% to maximum of 20% (depending upon profitability of the company) onactual Basic earned during previous financial year. The employee, who has left the service ofthe company, has to submit an application for payment of Bonus, mentioning therein his / herthen prevailing address. 44

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK 3.17 Medical Expenses ReimbursementManagers in Grade 58 to 71 can avail medical expenses reimbursement as per terms ofappointment letter/ pay revision letter.Grade Procedure58 – 64 Employee will submit claim through Oracle – Employee Self Service- My Info - Medical Reimbursement Claim.65 and above Reimbursement will be available on quarterly basis as per earlier practice. Employee need to submit the claim before 24th of last month of every quarter to get the reimbursement in that month’s salary. ( i.e. in June, Sept, Dec & March ) Employees will submit original bills incurred towards medical expenses along with medical reimbursement form to Accounts by 15th of the month after duly approved by Medical officer of the company. Employee can use existing form for submission of the claim.At the end of the year if employee has unclaimed balance, it will be paid as a one-time medicalallowance after deducting income tax as per the rule in the March salary. All payments will bemade through salary.5.18. Welfare Schemes and FacilitiesThe Employee Welfare program at KPCL is based on the management policy, which aims athelping our people to achieve self-satisfaction and prosperity.5.18.1. Death Benevolent FundIf any employee dies while in the service of the company, all employees contributeRs.50/- amount from their salaries and the company pays matching contribution. Theamount so collected is being paid to the legal heirs of the deceased employee.5.18.2. Managerial Staff and their family member Hospitalization SchemeThe scheme is intended to extend partial financial assistance by way of reimbursementof hospitalization expenses through an Insurance Coverage to the Managerial staff andtheir family members’ hospitalization.The eligible employee has to declare the four family members inclusive of him / her, andthe other three family members. The family members i.e. parents under age 75 yrs, (incase unmarried), spouse (Mandatory in case of employee is married), children (underage 25 yrs) by filling prescribed forms for the same at the time of joining and inform thecorrections (if any) as and when required to be changed. HR Department will arrange tosend format for the same for any kind of change or the confirmation correctness of theinformation like changes in names, address, addition / deletions of the covered 45

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK members’ etc. to be furnished to Insurance Company for every covered employee every year. The scheme covers only 4 members -. The scheme can be availed only for at least, one-day hospitalization (while covering family members in case of married, the priority are given to self, spouse and children. Only when the number is less than 4 then the parents can be enrolled so that the total no. of members will not exceed 4). Benefits of the scheme are: o Death or Disablement benefit: This benefit is intended to the managers who after putting 10 years service, either die or become incapacitated to do his / her normal duties. This was intended to extend the financial help to the unfortunate families in case of death or the disablement of the manager. o Reimbursement of medical expenses during retirement period: The second benefit is to extend the financial help to the retired managers and their spouses, during their retirement period up to the age of 75 years, who have served company for at least 10 years, by providing those Medi-claim policies. o Reimbursement of medical expenses: This benefit is to reimburse the hospitalization expenses incurred for the managers himself/herself or for the previously declared family members. The reimbursement will be to the tune of 90% of the expenses incurred for the illness allowed under Group Medi-claim policy. The employee himself/herself is allowed to have the reimbursement of pre- existing illness. The company reserves the right to refuse any quantum of expenses to be reimbursed and/or treatment taken from a particular doctor. (Hospital / Nursing Home: “Hospital / Nursing Home” means any establishment established for indoor care and treatment of sickness and injuries and which either has been registered as “Hospital or Nursing Home” with the local authorities and is under the supervision of registered and qualified Medical Practitioner.) The benefits under the scheme cannot be carried forward and/or accumulated. o Scope of Hospitalization and Expenses: The benefits include expenses on hospitalization for minimum period of 24 hours is admissible. However, this time limit is not applicable to specific treatments i.e. dialysis, Chemotherapy, Radiotherapy, Eye surgery, Lithotripsy (Kidney stone removal), Tonsillectomy D and C taken in the hospital / nursing home and the 46

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK insured is discharged on the same day; the treatment will be considered to be taken under hospitalization benefit. No expenses on account of hospitalization will be covered by this scheme, for the hospitalization within 15 days from the commencement of the scheme. o Procedure for claim: 1. Pre-intimation: - The manager must inform the hospitalization / accident of the information of his or his family members, in prescribed format, (In case of accident and subsequent hospitalization the pre-intimation should be submitted by filling in two forms) to the Personnel Dept. at HO; in turn HO- Personnel will send this information to the insurance company. Unless pre-intimation is given to the Insurance Company, it is not binding on it to settle the claim and it may turn down the claim. 2. Final claim: - The reimbursement claim as per the prescribed format should be submitted to Helpdesk at HO on every Tuesday and Friday in HR dept. The form should be accompanied by original bills, cash memos, receipts and vouchers of doctors, chemist, and laboratory and fitness certificate, discharge card, all test reports etc as required. Doctors’ prescription and receipts should accompany the chemists’ memo. 3. Correctness if filling in the prescribed form of the Insurance Company: - The employees should take proper care while filing up the prescribed form of the Insurance Company and will be responsible for the mistakes and/or wrong claims. Reimbursement: All reimbursement will be made only through pay roll and requests for payment in cash will not be entertained.Accident and Medi-Claim Insurance Statement showing Insurance Coverage (Sum Insured) Group Personal Accident Insurance Policy (On Death)Grade Designation Amount (Rs.) 58 Jr. Officer/ Engineer-B 9,00,000/- 47

KIRLOSKAR PNEUMATIC CO. LTD.59 Jr. Officer/ Engineer-A EMPLOYEE HANDBOOK60 Officer/ Engineer 9,00,000/-61 Sr. Officer / Sr. Engineer 9,00,000/-62 Assistant Manager 9,50,000/-63 Manager 10,00,000/-64 Sr. Manager 11,50,000/-65 Dy. General Manager 12,50,000/-66 General Manager 20,00,000/-67 Associate Vice President 25,00,000/-68 Vice Presidents 30,00,000/-70 Managing Director 35,00,000/- 50,00,000/- Group Medi-claim Insurance PolicyGrade Designation Amount (Rs.)58 Jr. Officer/ Engineer-B 1,50,000/-59 Jr. Officer/ Engineer-A 1,50,000/-60 Officer/ Engineer 1,50,000/-61 Sr. Officer / Sr. Engineer 1,50,000/-62 Assistant Manager 1,50,000/-63 Manager 2,50,000/-64 Sr. Manager 2,50,000/-65 Dy. General Manager 2,50,000/-66 General Manager 3,00,000/-67 Associate Vice President 3,00,000/-68 Vice Presidents 3,00,000/-70 Managing Director 5,00,000/-90% of the admissible hospitalization expenses are being reimbursed by Insurance Company, for hospitalization of minimum 24 hours5.19. Formalities on Resignation and RetirementEmployees who retire / resign and are officially relieved from the services of the company haveto complete the following formalities on their last day of service before they are relieved fromthe service. 48

KIRLOSKAR PNEUMATIC CO. LTD. EMPLOYEE HANDBOOK1. Clearance Certificate: The format of Clearance Certificate in duplicate is to be obtained by the employee relieved from the services which is available in HR Department. The signatures from different departments like Tool / Guage Stores, Finance , Communication, etc. as well as the signature of Departmental head to be obtained by such employee for intimation of dues / objections (if any) and the same is to be submitted to Time Office subsequently. The payment for balance P/L along with the P/L earned in current Calendar year, non availed Medical Reimbursement amount after filling prescribed form for the same and the amount of non availed LTA (at the discretion of the management) will be paid along with salary due for the month of the employee being relieved.2. Application for Bonus: (Only for 58 to 61 grade) This is also to be submitted in the prescribed format for claiming the bonus, if due for the last financial year in the month of November / December month in the current financial year.3. Application for Gratuity: Employee who has completed 5 years or more than 5 years’ service is eligible to claim the Gratuity for which, the employee has to fill up a prescribed application form along with the advanced stamped receipt. The Gratuity becomes payable within 30 days from the date of receipt of the application.4. Provident Fund Dues: Employee who is retiring / superannuating from the services of the company can withdraw the total contribution of the provident fund by submitting form no. 19 and Family Pension Form No 10 D. In case of continuation of membership with other employer, the employee should transfer his / her PF/ FPF accumulations to his / her new employer by submitting form no. 13 to new employer. This is mandatory under the law. The forms mentioned above for withdrawal is to be submitted in HR Department which after due verifications will be endorsed with a signature of the authorized signatory and will be handed over to the concerned employee for submission to PF Office, Pune Cantonment Building, Golibar Maidan, Pune : 4110015. Superannuation Dues: (Only for Grade 62 and above ) Employee covered under the Superannuation scheme of the company has the option either to withdraw or transfer the superannuation amount to his /her new employer. Employee who is willing to withdraw the amount has to fill up the prescribed application form and submit to (Pay and Accounts), for claiming the amount along with the Income-tax returns for preceding 3 years. On retirement one has to fill the prescribed forms. The employee get 1/3rd of accumulated fund amount tax-free and on remaining balance will get Pension from LIC.6. Income Tax Certificate: 49