Policy THREE Effective January 1,

No Date 2002
Policy CAR RELATED EXPENSES Review Date January 1,
On POLICY 2004

1 OBJECTIVE

To provide a basis for claiming car-related expenses for Managers.

1 DEFINITION

Car Related Expenses of the Employee include Car Lease Rentals (as
computed above), car fuel, car maintenance, driver’s salary (if applicable)
and car insurance (if applicable, only for company owned cars).

2 ELIGIBILITY

Unclassified, Band 1 - Band 3. This policy comes into effect from 1st
January 2002.

3 ENTITLEMENT : CRE as communicated in employee’s terms of

appointment / service. Car entitlement will be such that the lease rentals
towards it, at a 20% residual value, does not exceed 75% of the CRE
entitlement of that band.
(Table 1)
BAND ELIGIBILITY MAXIMUM ITEMS ACCESSORIES
CAR COST ALLOWED (Rupees)
(Net of One UNDER CAR
time Road-tax, RELATED
Insurance, EXPENSES
Registration *,
etc)
Unclassifi Company Rs 9,84,000/-, Fuel, toll-tax, 15,000 once in two
ed provided car maintenance, years
or as defined driver,
in employee accessories
contract (other than one-
time), taxes and
insurance
Band 1 Company Rs 8,88,000/- Fuel, toll-tax, 15,000 once in two
provided car maintenance, years
or as defined driver,
in employee accessories
contract (other than one-
time), taxes and
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VP–Finance VP-Corporate HR CFO CEO Director

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 insurance
Band 2 Company Rs 6,98,000/- Fuel, toll-tax, 15,000 one time
provided car maintenance, basis
or as defined driver, (Once in 2/3/4
in employee accessories years – depending
contract (other than one- on ownership
time), taxes and period)
insurance
Band 3 Company Rs 5,08,000/- Fuel, toll-tax, 15,000 one time
Provided Car maintenance, basis
or as defined driver, (Once in 2/3/4
by Employee accessories years – depending
Contract (other than one- on ownership
time), taxes and period)
insurance
4 POLICY DETAILS FOR COMPANY PROVIDED CARS

I. The Car Scheme is primarily a 4 year scheme but can be converted to a

two or three year scheme at the employee’s discretion initially or once
during the ownership access.

II. Each Business Unit will be responsible for the timely purchase / lease and
allotment of car as per entitlement. The capex for this should be raised by
the Administration Department within a fortnight of the employee joining.

III. Eligible Employees will give their option for ownership period (2,3 or 4
years) in advance at the time of sending their request to Human
Resources for allotment of car as per their entitlement. This option may
be changed only once after the car is allotted. The date on which the car
is allotted to the employee is the start date of the scheme.

IV. Car will be sold to employee at the end of 4 years or may be foreclosed at
the option of the Company or employee, at book value. If the employee,
at the end of 4 years, wishes to retain the same car without affecting the
transfer of the car into his ownership, he can renew the same. For this
purpose, the then Residual Value will be taken as the new cost price. In
case of renewal for a fresh term, he can foreclose the same at any point
of time by paying the residual value at the end of that term.

V. Insurance will be paid by Administration only for Company owned cars

and amounts will be adjusted against employee’s Car-related expenses.

VI. For computation of car lease rentals, the cost of the car will be computed
as follows :

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VP–Finance VP-Corporate HR CFO CEO Director

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 Invoice Value of the car, less one time road tax (borne by the Company),
less registration (borne by the Company, in the case of the first purchase
of car under this scheme or at the end of four years at least from the time
the car was first purchased, else partly borne by the Company), less
Insurance (debited to Car Related Expenses), less cost of Accessories
(adjusted against the limit of accessories as applicable). The Lease rentals
will be calculated on a 13% IRR with the Residual value at 20% of the
Original Cost, as amended from time to time.

VII. Company car is basically provided to address the official transport needs
of the employee and therefore the car-related expenses have been built
up accordingly. In case of an employee whose business usage is greater
than 500 kms (excluding residence to office) per month, he will be
entitled to claim reimbursement of the excess kilometers (i.e. over and
above 500 kms per month) traveled on business as per the Local travel
Policy. The basis of calculation will be @ 10 kms per litre for Maruti 800 /
Zen or similar range cars and 8 kms to a litre for an Esteem / similar high-
end cars. Employees will have to maintain a logbook for the same. Claims
in this regard should be as per format in Annexure I. Travel to and from
residence to place of work will be considered as personal travel.

VIII. If an employee leaves the company, it is compulsory for him / her to buy
off the car he / she is allotted. Any foreclosure costs will be to employee’s
account.

IX. If an employee fails to foreclose the ownership on leaving the Company,

the Company shall be entitled to recover the balance outstanding from
the employee’s salary / other dues payable by the company to him / her,
and in case his / her salary / other dues are not sufficient, the company
may at its discretion, without prejudice to rights and remedies available to
it under law, initiate suitable legal action to recover the remaining
balance from the employee.

X. In case of transfer of an employee from one Hutchison Joint Ventures (JV)

to another, the car will be transferred to the new company. The
employee will however be governed by the terms of the Agreement /
Policy with Hutchison Max Telecom Ltd. or its Joint Venture prior to the
transfer.

XI. In case of change in entitlement on promotion and consequent change in

band, it is optional for the employee to foreclose the ownership of the
existing Car that he is running. However, he will be entitled to the higher
entitlement, only after foreclosure of the existing car.

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___________ _____________ _____________ ___________ ___________

VP–Finance VP-Corporate HR CFO CEO Director

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 XII. An employee can only buy a car such that the lease rentals towards it, at
a 20% residual value, does not exceed 75% of the CRE entitlement of that
band. In no case, can an employee make a payment towards monthly
lease rentals exceeding the 75% ceiling of the CRE amount of that band.

An illustration:
Rs
Car Cost 7,75, 000/-
Less Road tax, Insurance, Registration etc. -1,00,000/-
Net Car Cost 6,75, 000/-
EMI , for the car (@13 % IRR, 20% RV, on a 4 year basis) 15949/-
Car Related expenses Entitlement for Band 2 22,000/-
p.m.
75% of this CRE Amount 16500/-
p.m.
Thus, the employee could avail of the car scheme for this car

However, if
Car cost (net of Road Tax, Insurance, Registration is) 7,00,000/-
EMI, for the car (@13 % IRR , 20% RV, on a 4 year basis) 16540/-
p.m.

Since 75% of CRE amount is Rs 16500 p.m., the employee cannot opt for this
car

Annexure II details lease rentals for 4, 3 and 2-year lease period assuming Rs
6.75 lakhs as the price of the car (not including Road Tax, Registration*,
Insurance etc) and taxes and accessories within eligibility.

XIII. Employees joining in Band Unclassified to Band 3 have the option of

transferring the
car that they were entitled to and using in their previous organization to
this scheme. In such a case HMTL will buy off the car from the previous
company at the prevalent market rates (including cost of registration,
One-time Road Tax, Insurance, foreclosure costs) for such a car. Post this
purchase, the lease rentals will be adjusted against their CRE eligibility.

XIII. Income Tax on car perquisite will be charged as per Income Tax Rules and
will be borne by the employee. The view of the Accounts Department on
this will be final.

XIV. All expenses pertaining to taxes, insurance will cease to be borne by the
Company on completion of the scheme period or foreclosure.

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VP–Finance VP-Corporate HR CFO CEO Director

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 XV. An employee is eligible to purchase his next car under the scheme, if he
has foreclosed his first car and the earlier car was originally purchased at
least 24 months earlier except on promotion and consequent change in
band.

However, if the employee purchases his next car at the end of two years
from his last purchase (i.e. the next car is purchased between 24 and 35
months from the time the previous car was purchased and the previous
car was purchased on or after January 1, 2002), 50% of the registration
will be borne by the employee. If the employee purchases his next car at
the end of three years from his last purchase (i.e. the next car is
purchased between 36 and 47 months from the time the previous car was
purchased and the previous car was purchased on or after January 1,
2002), 25% of the registration will be borne by the employee.

XVI. An employee, who is entitled to a car under the above scheme but does
not avail of the same, will be paid the CRE amount as a Special Allowance
through payroll.

XVII. Employees who are eligible to claim Car Related Expenses as per this
policy are not entitled to claim local conveyance as per the “Local Travel
and use of own vehicle for Company’s work Policy”.

5 OPERATING PROCEDURE

1. Employees in bands covered within the purview of this policy will be

indicated an eligibility amount towards car related expenses. Eligible
employees who want a new car will communicate the same in writing to their
Human Resources Manager stating their option of car and the ownership
period. Procurement of the new car will need the approval of the Human
Resources Manager & Finance Head of the Business Unit.

2. The Administration Dept. of each Business Unit is responsible for the

purchase / lease of cars locally. They should take a written undertaking as
per Annexure III from the employee to buy the car at the end of the
ownership period / foreclose before ownership period at book value. The
Administration Department needs to raise the necessary CAPEX and ensure
that the same is sent to HR. The car can be purchased once the Hong Kong
approval is obtained.

Admin Department will inform the Finance Department & Human Resources
regarding the date of purchase.

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VP–Finance VP-Corporate HR CFO CEO Director

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 Accounts would then work out the lease rentals and the same would be
communicated to the employee by Human Resources.

3. Employee can get petrol filled at any petrol station and submit the vouchers
accordingly. Claims for petrol will be cleared once a month to reduce
accounting transactions. Please ensure that all bills submitted are genuine
and disciplinary action will be taken in case false bills are submitted.

4. On expiry of ownership period, employee will be entitled to buy a new car as

per his / her entitlement. Based on employee’s request as per para (1)
above, the Administration Dept. will start action for procurement one month
in advance before expiry of the ownership period so that the new car can be
made available to him / her on his / her buying the old car. In case, an old
car is available in the company, and the employee is agreeable to take it,
Administration Dept. can give the same to the employee. In such cases,
ownership will be counted from the date of the Invoice of the car. As
purchases are to be made, after the CAPEX is approved, employees in Band
2 and above will be provided with a fully-maintained car through an agency,
in the interim, within the CRE amount. CRE during this period will not be
payable to him. This facility will be provided for two months, and may be
approved with prior approval of CEO for a maximum period of another two
months.

5. Eligible employees are also required to submit their expenditure plan against
car-related expenses in format as per Annexure IV. Claims for Driving
service charges must be supported with a declaration as per Annexure V.

6. Administration department is to be provided details of the driver, a

photograph and driving licence number in order to claim reimbursement
towards driver’s charges.

7. Any exceptions to this policy will need the approval the Managing Director on
the recommendation of the CEO and VP- Corporate HR.

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___________ _____________ _____________ ___________ ___________

VP–Finance VP-Corporate HR CFO CEO Director

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