Car Financing Maintenance Policy 01Jan2011

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Car Financing &Maintenance Policy

PREFACE

It is the practice of Techlogix to encourage the allegiance of its employees. This policy is example of showing

Techlogix faith in its employees. After certain amount of time they are eligible to acquire this facility. This

document defines the policy & process for the car financing, maintenance & other related benefits offered to

employees.

PROCESS

1. Car Financing

The company extends a car financing benefit to employees with a minimum staff classification of Principal Engineer

or Principal Executive. The benefit will be given to those employees who have an exemplary record at the company.

Employees selected for the Car Financing benefit are entitled to purchase a car of value up to the Financing Ceilingshown below. The Financing Ceiling depends on the employees staff classification. The employee can choose to

finance a car more expensive than the Financing Ceiling by paying the differential amount.

Staff Classification Financing Ceiling 1

President Rs. 2,250,000Executive Vice President Rs. 1,840,000Senior Vice President Rs. 1,640,000Vice President Rs. 1,450,000Director Rs. 1,200,000Senior Manager Rs. 1,000,000Manager Rs. 830,000Principal Engineer/Executive Rs. 600,000

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Effective January 1, 2011

Under the terms of this car financing policy the employee will have to buy the car from the company at a price equal

to *4/5th of the amount financed by the company. This payment will have to be made in 36 equal monthly

installments over a three (3) year period. The installments will be deducted from the employees monthly salary.

Once the entire payment has been received by the company the car will be transferred to the employees name.

The monthly lease rental and financial charges for the car, up to the Financing Ceiling, will be paid by the Company.The Company will also pay the annual car registration charges and insurance premium, up to the Financing Ceiling,

for a period of 3 years. However, the Company will not pay the transfer fee for transfer of the car to employees

name upon the completion of repayment.

The employee is entitled to receive another car after six (6) years from the date of the pervious entitlement.

* Effective January 01, 2009 onwards. This ratio may change in future as it is tied up the markup rates. This ratio

will be 3/4 for the car leases done before 31th of December 2008 and will be 2/3 for the car leases done before

30th of June 2008.

2. Car Transfer Policy (Resignation/Termination)

The employee is not allowed to withdraw from this benefit, except in the case when the employee has resigned or is

terminated from the company. If an employee resigns/gets terminated from the company s/he can only benefit from

car financing policy on a prorated bases i.e. the time s/he stays in the company after availing this benefit. S/he must

pay the remaining amount and get the car transferred to his/her name

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In both scenarios (Resignation/Termination) Techlogix has authority to retain or not to retain the car.

In case of resignation/termination, s/he has to purchase the vehicle from the company which will be determined as a

sum of following three components.

2.1. Principal Amount:

If an employee leaves the company during the leasing period of 3 years. At that particular time s/he isbound to payback a calculated amount of principal. The amount to be paid by the employee will be deduced

from the payment plan, prepared by the leasing company at the start of leasing contract and will be addition

of following two:

**4/5th of the total principal amount paid by the company to the leasing company.

Aggregated remaining principal amount for the remaining leasing period.

The installment amounts that have been deducted from the employees monthly salary will be subtracted

from above said figures to get the final amount that employee will have to pay.

In other words the employee will be given benefit of 1/5 of principal amount paid during the employmentperiod.

For sake of lucidity, lets take an example. An employee has got financial ceiling of 800,000. The employee

is leaving the company at 18th month. Then the calculations will be:

Principal amount paid to the leasing company till 20th month 18/36*800,000=400,000

4/5th of the principal amount deducted from the employees

monthly

4/5*400,000=320,000

Remaining principal amount 800,000-400,000=400,000

Total to be paid by the employee 400,000

So the employee will have to pay Rs. 400,000 to company to get the ownership of the car.

** Effective January 01, 2009 onwards. This ratio may change in future as it is tied up the markup rates.

This ratio will be 3/4 for the car leases done before 31th of December 2008 and will be 2/3 for the car

leases done before 30th of June 2008.

2.2. Markup Amount:

In case of breaking the contract with leasing company, leasing company is legitimate to recover the

markup. So as stated in the example above employee has to pay the markup for the remaining 18 months.

However if leasing company has some regulation to receive the remaining markup at reduced level then

that benefit will be transferred to the employee and employee will be eligible to avail that discount.

In case of breaking the contract with leasing company, there is a fixed lease termination penalty that iscurrently 7500 Rs. (It may vary time to time as set by the leasing company). Employee is bound to pay this

amount to the company.

2.3. Insurance Amount:

Besides the financing Techlogix also provides the benefit of car insurance for three years, that is used to be

paid at the start of each year. Any of the following situations may arise when insurance contract is ended:

a) Insurance company terminates the policy and reimburses the amount for remaining months toTechlogix. In this case nobody will bear any penalty.

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b) If insurance company has a policy and decides to transfer the insurance in the name of employee,then employee will have to pay back the remaining amount of insurance premium to Techlogix to

get the ownership of the car.

c) In worse scenario, if insurance company has the policy to terminate the contract and does notreimburse any amount, then employee will have to pay back the remaining amount of insurance

premium to Techlogix to get the ownership of the car.

For example if employee resigns after the 8th month of 2nd year of leasing; then there is no penalty in case

of situation a; in case of both situation b & c, employee has to pay insurance amount of remaining 4 months

to Techlogix.

3. Car Retaining Policy (Resignation/Termination)

If Techlogix opts for retaining the car, then the depreciation for the period of use will be subtracted from the

principal amount paid by the employee till date and the remaining amount will be reimbursed to the employee

in case of a positive difference and vice versa.

4. Car Maintenance

The company also extends a petrol and car maintenance allowance benefit to employees with a minimum staff

classification of Manager. The benefit will be given to those employees who have an exemplary record at the

company. The amount of petrol and car maintenance allowance paid to an employee depends on his/her staff

classification, as shown below. Furthermore, employees whose car is not insured by the company, but are eligible

for the petrol and car maintenance allowance, are entitled to receive the car insurance allowance shown below.

Staff Classification Petrol 2

(liters/month)

Car Maintenance (Rs/month) Insurance

(Rs/year)

President 1400.25% of financial ceiling 3% of financial ceiling

Executive Vice President 1350.25% of financial ceiling 3% of financial ceiling

Senior Vice President 1350.25% of financial ceiling 3% of financial ceiling

Vice President 1350.25% of financial ceiling 3% of financial ceilingDirector 1300.25% of financial ceiling 3% of financial ceiling

Senior Manager 95 0.25% of financial ceiling 3% of financial ceiling

Manager 800.25% of financial ceiling 3% of financial ceiling

2 Effective January 1, 2009.

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Documents

Car Financing Maintenance Policy 01Jan2011