Engineers India Limited New Delhi Circular No.

09/2010

Sub: Other Allowances and perks in respect of Board level and below Board level executives on IDA Scales of Pay

1.0

DPE, while notifying the revision of pay scales in respect of Board level and below Board level executives on IDA scales of pay has made provision for a Cafeteria Approach for payment of Other Allowances & Perks subject to a maximum ceiling of 50% of Basic Pay. Accordingly, it has been decided to have a Cafeteria Approach for payment of Other Allowances & Perks for such executives subject to a maximum ceiling of 50% of Basic Pay w.e.f 26th November 2008. The payments under the Cafeteria Approach of Other Allowances & Perks shall be made in respect of executives on rolls of the Company as on 28.1.2010 and subsequent joinees. This shall also apply to executives on deputation to other organizations and such executives who have separated from the Company on or after 26.11.2008 on account of superannuation or death. Under the Cafeteria Approach of Other Allowances & Perks, executives shall be allowed to choose from a cafeteria/ set of allowances/ perks within the prescribed limits as enumerated in the following paragraphs. Fixed Allowances: Payments towards certain allowances and perks (medical, annual gift and tea/ coffee/ soup in office) shall be monetized at corporate level as part of Fixed Allowance. For this purpose, expenses under these heads and the basic pay of the previous year would be considered for fixing the percentage towards Fixed Allowances for the next year. For the years 2008 09, 2009 10 and 2010 11, this shall be 6% of the Basic Pay. Optional Allowances: Executives shall be allowed to choose from a cafeteria/ set of allowances/ perks within the prescribed limits. These allowances/ perks shall be allowed upto 50% MINUS percentage towards Fixed Allowances. For the years 2008 09, 2009 10 and 2010 11, this shall be 44% of the Basic Pay.

2.0

3.0

3.1

3.2

SL. NO. 1 2 3

OPTIONAL ALLOWANCES ITEM PROFESSIONAL ATTIRE ALLOWANCE

AMOUNT/ PERCENTAGE OF BASIC PAY UPTO 10%

4 5 6 7 8 9a)

PHYSICAL FITNESS ALLOWANCE (including UPTO 10% Spectacle Allowance etc.) UPTO 12.5% EDUCATION ALLOWANCE (Including PDA, Reimbursement of Prof. Institute, Children Education Allowance & Hostel Subsidy, Magazine, Merit Scholarship etc.) UPTO 5% ENTERTAINMENT ALLOWANCE HOUSE MAINTENANCE/ UPKEEP ALLOWANCE (For executives on HRA only) CANTEEN ALLOWANCE (Meal Coupons/ Cash) LEAVE FARE ASSISTANCE (LFA) Holiday Home/ In lieu thereof UPTO 5% Rs. 1100 per month. 12.5%* At actual (based on previous year) Rs. 800

TRANSPORT SUBSIDY for executives not owning a vehicle (Mandatory) LEVEL AMT. P.M 9b) TRANSPORT ALLOWANCE for executives (Mandatory): 10 800 i. i. Claiming reimbursement for owning and 12 1000 maintaining a 13 1100 ii. vehicle; 14 1200 ii. Provided with official vehicle; 15 1300 iii. iii. Claiming 50% of Conveyance Reimbursement & 16 1500 iv. provided with official transport; and 17 1600 v. iv. Claiming Special Transport Allowance applicable 18 1800 for 19 & 20 2000 vi. handicapped executives. In case the actual claim in any of the above is less than the entitlement of Transport Allowance, actual claim would be considered. In case of executives provided with official transport & drawing 50% conveyance reimbursement for maintaining a scooter, 100% scooter allowance or Transport Allowance, whichever is lower shall be considered. At actual as per previous year 10 DIFFERENTIAL INTEREST/ INTEREST SUBSIDY data (Difference between rate ON LOANS charged from employee and rate as per Income Tax Rules) 11 44% MINUS Total of above SUNDRY ALLOWANCE for expenses on miscellaneous allowances account (Min 5%); 5% to be paid at the end of the (minimum of 5% of Basic financial year at option of employee) Pay) *Zero or 12.5 % option for LFA to begin from Block 2011-13 onwards.

4.0

The individual officer may choose, as per requirement, allowances & perks from the list of allowances/perks, as above, and submit his/her option in the prescribed Performa (Annexure A)

for the next financial year. The option once exercised shall remain applicable for the financial year. In case of any transfer/foreign posting of 6 months or more duration during the financial year, the amount of allowances available to an individual officer shall be reworked for the balance financial year if options are revised by executive. In such cases the revised options shall apply prospectively. In case of non-submission of duly filled option form (Annexure A) towards the optional allowances by an executive by the cut-off date, payment shall be made @ 44% after making due adjustments against payments towards transport, merit scholarship, differential interest/ interest subsidy on loans and holiday home/ in lieu thereof, if any. 5.0 Executives shall not be required to give their option for the period 26th November 2008 to 31st March 2010. For this period, the difference between allowances and perks drawn and 44% of basic pay shall be disbursed as a lump-sum amount. Accordingly, the payment against existing Professional Updation Allowance, Spectacle Allowance, Children Education Allowance, Minor Repairs, Canteen Coupons/ Allowance, Reimbursement of expenses in lieu of holiday home, Entertainment Allowance, Picnic Subsidy, Uniform Allowance and Reimbursement of Membership Fees of Professional Institutes shall be discontinued w.e.f 1.3.2010 in respect of executives on IDA pay scales. All payments made w.e.f 26th November, 2008 under items indicated at Annexure I shall be proportioned pro-rata and adjusted against the perks/ allowances specified under the optional allowances of Cafeteria Approach. The existing LTC scheme shall stand withdrawn for the block 2009 11 onwards. Leave Fare Assistance Scheme as detailed at Annexure II shall be introduced for the block 2009 11 onwards. Executives who are yet to utilize the blocks 2005 07 & 2007 09 shall be allowed to utilize the same as per existing LTC scheme. Executives superannuating during 2009 11 who are eligible to avail the last block of LTC due to them within a year of superannuation shall be allowed to avail 2007 09 LTC within one year of superannuation if travel option for 2009 11 is not exercised. Executives shall have the option to avail facility of actual travel or LFA. Amount equal to 12.5% of the Basic Pay shall be disbursed towards LFA component every month. However if option for actual travel is exercised, this monthly amount shall not be disbursed. Options under the Cafeteria Approach towards optional allowances for the period 1st April, 2010 to 31st March, 2011 shall need to be exercised by the executives as per Annexure A from 1.3.2010 to 15.3.2010 in EIL portal. Payment of Field Allowance presently being made to executives posted at sites observing 48 hours/ 6 days week stands discontinued w.e.f 1.12.2008.

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5.2

5.3

6.0

7.0

In case of executives under suspension, only subsistence amount as applicable on the Basic Pay shall be payable. A suspended executive shall not be eligible to allowances & perks under cafeteria approach during the period of suspension. Executives on Study Leave shall not be allowed other allowances & perks. Payments on account of allowances/perks shall be subject to the Income Tax as per the Income Tax Act. Vouchers/documentary evidence, as required may be submitted for claiming exemption under IT Act. The Cafeteria of allowances and perks and applicable percentages shall be reviewed every two years. Next review shall be in 2010 11 for the FY 2011 - 12.

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9.0

This issues with the approval of the competent authority.

(S.K. Kohli) General Manager (Pers.) No. 711.31.2 dated 24th February 2010 As per Standard Distribution list in New Delhi Office R&D Complex, Gurgaon Mumbai Branch Office All Regional/Field/Procurement/Foreign offices Notice Boards EIL Officers Association, New Delhi

http://hr.eil.co.in/Circular 2010/09_2010.htm

ANNEXURE-I to Circular 09/ 2010

EXISTING ALLOWANCES & PERKS TO BE ADJUSTED AGAINST OPTIONAL ALLOWANCES

Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Name of Allowance/Perks Uniform Allowance Canteen Allowance/ Meal Coupon/ Picnic Subsidy, where applicable Professional Updation Allowance Transport Subsidy for executives not owning a vehicle and Transport Allowance for executives owning a vehicle or provided with official vehicle as per Table under the Optional Allowances. Spectacle Allowance Reimbursement of Membership fees of Professional Institutes Children Education Allowance Minor Repairs Entertainment Allowance LTC Merit Scholarship Interest Subsidy/ Differential Interest on Loans Holiday Home/ Reimbursement in lieu thereof Field Allowance upto 30.11.2008

ANNEXURE- II to Circular 09/ 2010 LEAVE FARE ASSISTANCE (LFA) SCHEME 1. The LEAVE FARE ASSISTANCE (LFA) Scheme shall be introduced for the block 2009 2011 onwards and shall be applicable for a block of two financial years (i.e. 2009 11, 2011 13 and so on). For the block (2009 11), 12.5% of Basic Pay shall be paid as component towards LFA in respect of all officers. The option not to claim any amount towards LFA under the cafeteria approach shall be available to officers only from 1.4.2011 onwards. Amount equal to 12.5% of the Basic Pay shall be disbursed towards the LFA component every month. If option for actual travel is received, this monthly amount shall not be disbursed. Executives who intend to utilize the amount of LFA for actual travel shall indicate their intention to do so in the month of March preceding the beginning of a block or beginning of financial year. In such case, he/ she shall be allowed to travel for the block anytime upto 1 year from the completion of the block. The total amount due to him for the block can be released upto 3 months before the date of intended travel. If the executive does not actually travel, he would have to refund the amount within the time frame along with penalty (if applicable) as per existing LTC Rules. The amount due to him shall be calculated based on actual past basic pay data of the block and basic pay as on date of advance. On separation other than superannuation from the company, the pro-rata amount for the balance months shall be recovered. In case of executives who are due to retire within the block, the amount pro-rated for his service period shall only be admissible. Income Tax provisions shall apply as per IT Act/ Rules. The existing LTC scheme shall stand withdrawn for the block 2009-11 onwards. Officers who are yet to utilize the blocks 2005-07 & 2007-09 shall be allowed to utilize the same as per existing LTC scheme. Officers superannuating during 2009 11 who are eligible to avail the last block of LTC due to them with a year of superannuation shall be allowed to avail 2007 09 LTC within one year of superannuation if travel option for 2009-11 is not exercised.

2.

3.

4.

5.

Regulating LTC for the block 2007-09: For executives on the rolls of the Company and superannuated officers who have already availed/ encashed LTC for the block 2007-09, the pro-rata amount of encashed/ availed LTC for the period 26th November 2008 to 31st March 2009 shall be adjusted against the lump-sum perks & allowances arrears. Executives, who are yet to avail, shall be paid LFA @ 12.5% for the period 26th November 2008 to 31st March 2009 and this shall be adjusted against the advance/ actual LTC amount whenever it is availed.

Regulating LTC for the block 2009-11: In respect of executives on the rolls of the Company & superannuated officers who have already encashed LTC for the block 2009-11, the difference between 12.5% of BP for the year 2009-10 and the encashed amount shall be paid alongwith 2009-10 arrears. During the years 2010 11, monthly payment @ 12.5% shall be disbursed. In respect of executives on the rolls of the Company who have already availed LTC for the block 2009-11, the difference between LFA admissible for the block 2009 11 and the amount of LTC already claimed shall be paid/ recovered in lumpsum and no payment @ 12.5% shall be made during the remaining block. In respect of superannuated executives and executives due to superannuate during 2009 11 who have already availed LTC for the block 2009-11, the difference between LFA admissible for the period of service and the amount of LTC already claimed shall be paid/ recovered and no payment @ 12.5% shall be made during the remaining period. Executives on rolls/ due to superannuate who are yet to avail LTC for the block 2009 11, shall be required to give their option for actual travel/ LFA. In case of option of actual travel, monthly disbursement @ 12.5% shall not be made and the applicable amount based on actual period of service, shall be released upto 3 months before date of travel. The date of travel shall in any case be on or before 31.3.2012 including superannuating executives who are allowed to avail their LTC within one year of superannuation as per existing LTC Rules.

Annexure-A to Circular 09/2010 OPTION FORM FOR OTHER ALLOWANCES & PERKS UNDER CAFETERIA APPROACH Name: ____________________________________________ Employee No. : _________________________ Designation:_______________________________________ of Posting:_________________________ (LIST OF OTHER ALLOWANCES & PERKS OPTED FOR FINANCIAL YEAR 2010 11) SL. NO 1 2 3 4 5 6 ITEM PERMISSIBLE PERCENTAGE/ AMOUNT UPTO 10% UPTO 10% UPTO 12.5% UPTO 5% UPTO 5% Rs. 1100 per month. MEAL COUPON** OR CASH ACTUAL TRAVEL OR LFA INDICATE % OF BASIC PAY & OPTIONS WHEREVER REQD.* Place

PROFESSIONAL ATTIRE ALLOWANCE PHYSICAL FITNESS ALLOWANCE EDUCATION ALLOWANCE ENTERTAINMENT ALLOWANCE HOUSE MAINTENANCE/ UPKEEP ALLOWANCE (For executives on HRA only) CANTEEN ALLOWANCE (Meal Coupons/ Cash)

LEAVE FARE ASSISTANCE For block 2009 11 (Refer Para 5.2 of circular) HOLIDAY HOME/ INLIEU THEREOF TRANSPORT SUBSIDY for executives not owning a vehicle (mandatory) TRANSPORT ALLOWANCE for executives (Mandatory):

12.5%

8 9a 9b

At actual (based on previous year) Rs. 800 LEVEL AMT. P.M 10 800 12 1000 13 1100 14 1200 15 1300 16 1500 17 1600 18 1800 19 & 20 2000 At actual as per previous year data (Difference between rate charged from employee and rate as per Income Tax Rules) BALANCE OF 44% MINUS Total of above allowances (Minimum of 5%)

10

DIFFERENTIAL INTEREST/ SUBSIDY ON LOANS

INTEREST

SUNDRY ALLOWANCE miscellaneous account 11

for

expenses

on

5% to be paid Monthly End of year

*Percentage figures may be zero or integer or fraction of 0.5 ** Meal Coupon facility currently available in Delhi, Mumbai and Chennai only. Date:________________________ Signature_________________________________ Place:_______________________

(To be filled in online at EIL portal from 1st March, 2010 to 15 th March, 2010& duly signed print out to be submitted to HR; in case EIL portal facility is unavailable, the hard copy of the option submitted to HR in HO shall be accepted).

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:________________________ ______________________________ ( 1 , 2010 15 , 2010 . . . . / ). :_______________________ ;