ISMT LIMITED

ISMT LIMITED

HRD MANUAL(OPERATING GUIDELINES)

Organizational Vision ......................................................................................................... 3 Objective of the HR Policy ................................................................................................ 3 Means for achieving Objectives ........................................................................................ 3 1. Organization Structure & Promotion Policy .................................................................... 4 2. Conditions of Employment .............................................................................................. 6 3. Promotion of Staff Category to Managerial Level .......................................................... 6 4. Promotion Review ........................................................................................................... 6 5. Definition of Max Age & Ideal Age ................................................................................ 7 6. Modifications & Changes to the Organization Chart ...................................................... 8 7. Salary Structure & Interpretation of its Components ...................................................... 9 8. Appraisal Process ........................................................................................................... 12 9. Appraisal Methodology ................................................................................................ 12 10. Training ........................................................................................................................ 14 11. Linkage of Policy Decisions & HR Initiatives to HR Objectives ............................... 14 12. Attachment ................................................................................................................... 16 Manpower Planning and Recruitment .............................................................................. 17 Recruitment Standards ...................................................................................................... 23 Designations ..................................................................................................................... 25 Recruitment of GT’s ......................................................................................................... 26 Recruitment of Retainer category ..................................................................................... 27 Probation and Confirmation ............................................................................................. 28 Promotion of Staff Category to Managerial Level ........................................................... 29 Training ............................................................................................................................. 31 Transfer ............................................................................................................................. 32 Inter Company Transfer .................................................................................................... 33 Deputation ......................................................................................................................... 34 Separation ......................................................................................................................... 35 Retirement ......................................................................................................................... 38 Personnel Administration ................................................................................................. 40 Insurance Policies ............................................................................................................. 47 Accomodation ................................................................................................................... 48 Provident Fund .................................................................................................................. 54 Domestic Travel Policy .................................................................................................... 60 International Travel Policy ............................................................................................... 66 Telephone Reimbursement ............................................................................................... 69 Marriage Gift .................................................................................................................... 70 Visiting Cards ................................................................................................................... 71 Car Policy ......................................................................................................................... 72 Personal Files .................................................................................................................... 73

ISMT Limited

Organizational Vision

To be the most sought after, efficient, profitable and respected producer globally of precision seamless tubes and alloy steels.

Objective of the HR Policy

To create and maintain a young, self-rejuvenating, motivated, lean, cost-efficient and performance oriented organization.

Means for achieving Objectives

•Identify, nurture, and retain key talent

•Reward Merit

•Reward/Encourage Learning, Team work, Creativity, Innovation and Entrepreneurship

•Create an equitable and fair salary structure

•Make the HR Policy simple to understand and implement

1. Organization Structure & Promotion Policy

1.1 Levels, Roles & the Assignment of Roles to Levels

oThe organization is divided into Five Primary Hierarchical Levels (HL1 - HL5) containing a maximum of 4 Reporting Levels in any chain of command. oWithin each Primary Hierarchical Level are three sub-levels. As an example sub level 2 in Primary Hierarchical Level 1 will be designated as HL 1.2. However, for level 5 there are four sub – levels and these are represented as 1,2,3, & 3AoEach sub-level corresponds to a different Base Salary as described in the Salary Structure & PolicyoThe organization is divided into specific Primary Roles. The nomenclature for the Primary Role may be distinct from the Designation of the person who is performing that Primary Role.oEach Primary Role in the Company is assigned to a particular HL. In other words that particular Role cannot, under any circumstances, exceed that HL.oThere will be no reporting within one Primary Level (other than in the case of persons who are Blocked – see below)oEach Primary Role is associated with possible promotion opportunities (if applicable)oFor the sake of conceptual understanding the levels in the Company represent ‘Managerial Ability’. Within a ‘Rotation Set’ (defined subsequently) this implies transferability between Departments. In other words, the Hierarchical Level answers the question: If jobs were transferable between Departments then what would the lateral equivalent be between different departments?oThe Primary Roles are defined and frozen as a part of a one time exercise by the MB and is reflected in the organization chart. Consequently, any changes to the Primary Role Chart are to be ratified by the MB or by the CEO.

1.2 Filling Vacancies

oThe first attempt will be to fill any vacancies through internal promotion. Only if such attempt should fail will we resort to external recruitment.

1.3 Fitment of Roles into Sub-Levels and Intra Primary Level Promotion

oA particular Primary Role may occupy any sub-level within the Hierarchical Level to which it belongs. In other words a person may be promoted from one sub-level to the next without a necessary change in job-content or increase in job responsibility. Such promotions will be effected based on ‘on the job’ experience where ‘on the job’ may include related jobs. Other than at Primary Level 5, such promotions will be based on an appraisal process. oAt Primary Level 5, it will be based on time rather than experience. In other words a “max” time will be defined beyond which “auto” promotion to the next level will be effected. Max time will be a function of Qualification and Rating and will be as per Appendix attached. Such promotions will be automatic, will require minimal paperwork and will be due on the employee’s appraisal date.

1.4 Job Rotation, Earning of ‘Stars’ and their Impact on Promotability

oCertain Departments will be clubbed together and belong to a “Rotational Set” (see Appendix). As a policy, a person will not be promoted from one Primary Level to the next without having moved laterally (at least once) from one Department to a ‘new’ one (‘new’ implies a Department that he has not been part of before) within a particular Rotational Set. Transfers between Departments not in a rotational set will still be possible but this will be done on a case to case basis and not as a norm. oWhen a vacancy arises, then among the candidates competing for promotion to fill that vacancy and having equal Effectiveness Ratings, a person having more stars will be given greater consideration.

1.5 Designations

oDesignations given to employees are for external purposes only. For internal purposes, an employee’s position is defined by a combination of his Primary Role, Dept & Level. For example: Mill Manager - Production, (Level 3.1).

2. Conditions of Employment

2.1 Transferability

oPrimary Roles where location transferability is to be expected are to be defined. When a person takes up such a job it should be made known to him via the appointment letter that he is in a transferable assignment. oThe max time for transfer ‘Max Transfer Period’ should be defined for transferable jobs.oFor transferable jobs, new persons being recruited should not be hired for work in the home city.

2.2 Non-Compete

oPersons joining the Company (after the date of adopting this policy) are required to sign a non-compete agreement that will restrict them from taking up assignments in competing companies for a specified period after leaving their job at ISMT. This will apply to jobs in ‘Sensitive Departments’ including Production (all production departments) and Marketing (Domestic as well as Exports). Competing companies will include all manufacturers or distributors of tubes - welded as well as seamless.

3. Promotion of Staff Category to Managerial Level

oStaff category promotions will be considered to Level 5 on a case to case basis. Criteria for such promotion will be based solely on Job Vacancy, Competence & Further Promotability. In other words the person who is promoted to the Executive level should not thereafter becoming a bottleneck or block in the chain – he himself should have the potential to be promoted further.

4. Promotion Review

4.1 Periodic

oThe company will conduct an annual review of all persons who are in Sub Level 1 of all Primary levels to identify those who are ready for promotion to the next higher primary level. oThis promotion review will be combined with the Annual Review to identify and Blockers and those who are Blocked (See relevant para)oThe review will be conducted by a committee consisting of the Management Board, Head or Marketing, CFO and the two Plant ChiefsoThe output from this exercise will be to (i) Promote a person or (ii) Designate him as ‘Ready for Promotion’ or (iii) Prepare for Promotion oA person is designated as ‘Ready for Promotion’ when the next job that he/she can occupy in a higher Primary Level is identified and it is confirmed that he/she

has the requisite experience, skills, knowledge and qualifications to take up that assignment. oIf a person is Ready for Promotion a pro-active effort needs to be made to see how he can be promoted at the earliestoPrepare for promotion will mean identifying likely positions that the person may be promoted to and instituting a procedure to train/prepare him for that positionoThe EVP HR will be responsible for preparing a dossier on each employee to be discussed. This dossier must include a good quality picture of the person that can be displayed on the screen during the discussion.

4.2 Triggered by a Vacancy

oAny vacancy in the organization above level 5 will trigger a Promotion ReviewoThis Review will be conducted either by the Plant Chiefs, in the case of a position at the plants and by the Dept Head in case of a position at the head Office. oThe guiding philosophy for conducting such a review will be: The management’s first priority is to promote a person internally provided such person is available. If such a person is found, he will not be held back from promotion solely because he is doing his current job well and there is therefore a reluctance to relieve him from his current positionoThe input information to this review meeting will be a list of (i) all Sub-level 1 candidates in one Primary level lower than the vacant position (ii) all persons one sub level lower in the same department and (iii) all persons one sub level lower in the associated Rotational Sets. The Executive HR will provide this information to the CommitteeoIf a person is not found suitable for internal promotion then a note must be prepared stating which candidates were considered and why each was rejected.

5. Definition of Max Age & Ideal Age

oFor each Primary Role a max age will be defined and this will be ratified by the MBoThe purpose of assigning a max age is to be able to identify ‘Blockers’ who are preventing the promotion of people below him in the hierarchyoCertain Primary Roles in the company will be identified as being part of a ‘Growth Path’. People in such Primary Roles shall not be allowed to exceed the Max age for that Primary Role. oFor each Primary Level an Ideal Age is defined. This ideal age is used as a guide for locating Fast Track persons, for the promotion of deserving employees, and for the induction of new persons into the organization. oPersons who are consistently rated A on the Effectiveness scale should move up the organization roughly as per the Ideal age. If the trend is otherwise, the management must review the causes.

5.1 Identification of Blockers

oThe company will conduct an annual review of all employees occupying Growth Path positions in Levels 4 and above to identify blockers. oIn general, any person, who occupies a Growth Path position and exceeds the Max Age, will be deemed as a Blocker. However, exceptions may be made by the MB, particularly, in cases where the department is being expanded such that the blockage is not severe.

5.2 Identification of those who are Blocked

oA person who is deemed ready for promotion to the next Primary Level but cannot be promoted because there is no vacancy may be designated as ‘Blocked’oSuch a person must meet the following criteria simultaneously:

He must be ‘ready for promotion’His next position in the organization must be identified The ‘Blocker’ who is preventing his promotion must be identifiedA time-frame of less than one year must be set for the Blocker to be moved

oA person who is designated as ‘Blocked’ may, at the discretion of the management, be promoted to the next Primary Level, Sub level 3 and be given a designation associated with that Primary Level. In such case, he must be briefed that he has been promoted in advance and that as and when his responsibilities are actually increased he may not necessarily be given a salary increase. oSuch a person cannot be promoted beyond Sub Level 3 until he actually occupies a job position that is associated with the Primary Level to which he has been promoted

5.3 Cut-Off Age

oA ‘Cut-off’ age will be defined for all persons occupying Growth Path jobs. Every person approaching the Cut-Off age will be reviewed (two years prior to the date) to determine whether the Company wishes to retain him or not. If he is not to be retained, he should be asked to leave gracefully. In general, such persons will not be granted any special benefits, other than those due as per the terms of employment. oThe MB will periodically review the option of giving Blockers who are beyond the Cut-Off a golden handshake. If the system of prior review is working, such incidences should reduce over time.

(The rationale for such review and such action is that the Company believes that if a person crosses the Cut-Off age his ability to find an alternative job diminishes. Therefore, the Company should make an assessment prior to the person reaching such an age. Beyond that age, the Company assumes a certain moral responsibility for that person. However, this is not valid in cases where the incumbent has joined the Company after having attained the cut off age)

6. Modifications & Changes to the Organization Chart

oThe Management Board will periodically review the Organization Chart and make modifications. During such a review there may be additions and deletions of roles assigned in the chart. Existing roles that are defined for deletion will be marked and due consideration will be given to (i) the time-frame for such deletion; and if required (ii) the re-assignment of the person occupying that role.

7. Salary Structure & Interpretation of its Components

7.1 Salary Structure

oThe Salary structure is divided into 5 Primary Levels with three Sub-levels in each primary level (for sub-levels in Primary Level 5). These levels correspond to the Hierarchical levels defined in the Organization Structure & Promotion PolicyoEach sub-level corresponds to “On the Job (or related job) Experience” of the person. In other words it measures the “ability of the person to contribute to the job given his experience in that job or a closely related job (perhaps in a job within the same rotation set)”. oWhen a person moves laterally between Departments from one Rotation set to the other, he will join the other job within the same Primary Level at the next higher Sub-level as compared to the previous job. The assumption being made here is that his previous experience (within the same rotation set) has also prepared him for this job. Each shift between departments in a Rotational set will earn him a ‘Star’. Number of Stars will relate to the breadth of experience that a person has.oAt each level the Salary = Base + HRA (% of Base) + Rating Allowances (% of Base) + Personal Pay (% of Base) + Performance Allowance + Professional Allowance (% of Base) + Criticality / Effectiveness Allowance (% of Base) + Conveyance Allowance (%Base) + LTA + Medical Allowance. The conveyance allowance is only a “tax” shelter as allowed by the authorities - it has no relationship to actual conveyance costs.oFor each level the Base salary is fixed. oThe ‘Rating Allowance’ is a function of the Criticality Rating and the Effectiveness Rating that is awarded to an employeeoThe Professional Allowance will be Uniform across certain categories of persons based on either Professional Qualification or Trade. e.g., Company Secretaries, Chartered Accountants, Marketing Professionals or Computer Programmers. This Allowance will be used for carrying out any market corrections in salaries across categories of professionals (entirely at the discretion of the Management). It will be at the discretion of the Management to assign a particular person to a professional category. In other words a person with a computer background who joins in the Marketing Department cannot insist that he gets clubbed with computer programmers and be eligible for the allowance. The Company has to decide whether that person is working as a computer programmer or not (refer to promotion policy for more clarity on how such decisions will be taken by the Company)

7.2 Personal Pay & Personal Pay Absorption

oPersonal Pay is a ‘buffering’ component used to manage decreases in applicable Salary. A positive Personal Pay indicates that an employee, given his level and given his ratings, is receiving a higher salary (equal to the personal pay) than his peers in an equivalent state. This salary component has been used while transitioning employees from the old salary structure into the new salary structure. For the next two years it will also be used to buffer decreases in salary due to downward revisions in Performance Allowance, Criticality Ratings and/or Effectiveness ratings. Subsequently it will be used only to buffer decreases in salary due to downward revisions in Criticality Ratings and Effectiveness ratings. Any positive balance in Personal Pay will be automatically subject to gradual reduction (absorption). oFor a period of two years from September 2006: For a person who has a positive balance in the Personal Pay account, 1/3 of the increase that would have been due (in percentage terms) will be absorbed in the Personal Pay account. In other words his actual salary will go up by at least 2/3 of the percentage increase that would normally have been due. Thereafter: For a person who has a positive balance in the Personal Pay account, 1/5 of the increase that would have been due (in percentage terms) will be absorbed in the Personal Pay account. In other words his actual salary will go up by at least 1/5 of the percentage increase that would normally have been due.

7.3 Criticality & Effectiveness Ratings

oCriticality/ Effectiveness Allowance is defined as follows:

EffectivenessA B C

CriticalityA 70% 40% 15%B 40% 15% 5%C 15% 5% 0%

oThe Criticality rating is the prerogative of the management and is not subject to debate. oA Critical person is defined as one who meets one of the following two conditions:

1.Has special skills critical to the company AND is not easily replaceable AND whose departure could have a significant impact on the company (must meet all three conditions)2.Is considered to be on the Fast Track

oThe rating is linked to the person and not to the job. In other words, a person is critical and not the job that he does. On the other hand we may define jobs which if mastered by the person will make him critical to the company. For example, we may conclude that if a person has learnt how to run the hot-mill he becomes a critical person. He might therefore join as Hot-Mill in charge and start with a B rating and once he has learnt the job he will have an A rating. oThe Effectiveness Rating is the prerogative of the “Functional” superior two Primary levels higher than him and is subject to review and moderation (based on a

lateral comparison of ratings across his peers) by the Management Board. The rating given to an employee is not subject to debate between the employee and the Management or the Functional Superior who has given the rating; the assumption being that the Functional Superior is duly qualified to give the rating. oEach Department will be given a max criticality rating. A person in that department, unless he has transitioned through a department that has a higher max criticality rating and in that process earned a higher rating, will not have a rating higher than the max criticality rating for the department. oA new person joining the Company will be assumed to be rated better than C on both Criticality as well as Effectiveness scales.

7.4 Performance Allowance

oFor all levels the Max Performance Allowance is capped at 25 % of Base. oDepending on the Performance Score that a person gets (x / 5) he will get a portion of that Performance Allowance. For example if he gets a Performance score of 3/5 his Performance Allowance will be (3/ 5) x 25% x Base. Similarly if he gets a score of 5 out of 5 his Performance Allowance will be 25% of Base. (Please refer to Appraisal System for a description of how the Performance Score will be granted)oTill such that the proposed IT system which will simplify the work-flow for Performance Allowance appraisal process we have decided to give 30/40/50 percent of the Maximum Performance Allowance to all employees depending upon the Functional Head’s A/B/C rating.

7.5 Changes in Salary due to Changes in Performance Allowance

oThe Performance Score is variable and therefore it can reduce or increase from one year to the next depending on the appraisal.oAs a special measure, the performance score that is granted to each employee at the launch of this revised salary structure will be protected for a period of two years (from launch date): Any decreases in Salary on account of a downward revision in Performance Allowance will be protected through an equal increase in Personal Pay

7.6 Changes in Salary due to Changes in Criticality or Effectiveness Ratings

oA downward shift in the Criticality Rating and/or Effectiveness Rating may cause a downward shift in applicable salary. However, in such a case the downward revision will be protected through an equivalent increase in Personal Pay. The rationale for creating such a buffer is that a dramatic downward revision (since a rating change can cause a substantial change) will not be palatable to the employee. However, the fact the Personal Pay is to be absorbed over time is a clear indication to him that he needs to improve.

7.7 Rationale for the Above Structure

oThe salary of each person is based on the following criteria: (i) His position in the hierarchy (ii) His actual performance during the year as related to targets for achievement (ii) His experience as a measure of his ability to contribute to the job (iv) His criticality to the company and (iv) His Quality as compared to his peersoThe entire salary structure is linked to one single Base Salary number. Therefore a salary correction across the board is simple to effect.oEnables a specific differentiation between persons of different professionsoCreates a logical basis for analyzing each component of the salaryoAll key attributes are separately measure and indexed to the salary creating a logical and explainable basis for relative salary variationsoThe Criticality scale allows the Company the flexibility to fence in key personsoPuts a cap of salary for specific jobs/forces exit for underperformersoMakes a clear distinction in salary for better performers

7.8 Timing of Salary Revisions

oWhen a person’s performance comes up for appraisal, the appraisal will be restricted to (i) his level i.e., whether he is due for promotion or not, (ii) his Performance Rating (iii) his Criticality Rating and his (iv) his Effectiveness Rating. In the event of the appraise being rated at the same or lower level than the previous rating on effectiveness, he / she would get an increment of 6/4/2 percent if rated on an A/B/C respectively.oThe Base Salary may, at the prerogative of the Management, be corrected annually and will, as a result of the new structure, have a uniform effect across the organization. The basis for such correction will be overall inflation, market salary inflation, company’s performance, and/or a combination of other factors. The management has decided that this revision would be brought into effect from 1st of June every year.

8. Appraisal Process

8.1 Types of Appraisal, Expected Output and Timing

oThe Appraisal System will be divided into two categories: Non-process based and Process-basedoIn both categories, some appraisals will require Managerial Ability to be appraised while others will not. The Managerial Ability Appraisal will be used to determine the promotability of a personoAll appraisals will have two outputs: Knowledge Appraisal and Performance Appraisal. The Knowledge Appraisal will be used by the HRD Department as an input for determining training requirements while the Performance Appraisal will be used to determine the Performance AllowanceoAppraisal of all employees in levels 5 to 1 will be done annually on the date of joining on probation.

9. Appraisal Methodology

9.1 Process Based Appraisals

oA person who is involved in a defined Process of the Company will be evaluated by the Process In charge of each Process in which he is involved and will be given a score (out of 5) based on his performance in that process. The assessment will aim to reflect the person’s performance relative to the best performance that might have been possible had no hindrances been present. Having said this, the assessment will be subjective - in other words it will be at the discretion of the appraiser.oIn addition, the appraisal will also evaluate person’s knowledge/skills level relative to the specific requirements of the job (as per the process). The appraisal form being handed to the Appraiser shall carry in advance the Knowledge/Skills requirements of the Role. oIn addition to the above the person will be evaluated by the Functional Head to whom he reports based on other KRA’s that the person might have been allocated at the beginning of the appraisal period. The forms shall carry the KRA’s in advanceoAll the scores from the above evaluations will be collated by the Functional Head and he will be given an Average Performance Score again out of 5. oThese scores will be submitted to a higher committee of Process Owners who will then use this score to evaluate the applicable Performance Allowance. Normally, the performance score will be a weighted average of the scores submitted by the process owners and the Functional head. In case there is a wide discrepancy either in one of the scores or between all the scores then the committee may debate the issue and arrive at a consensus score.

9.2 Non-Process Based Appraisals

oSuch persons, who are not involved in any defined process of the company, will be appraised only by the Functional Head to whom they reportoAppraisal will be made based on the KRA’s that had been defined at the beginning of the Appraisal periodoBased on the Appraisal they will be given a Performance score (out of 5). The assessment will aim to reflect the person’s performance relative to the best performance that might have been possible had no hindrances been present.oThis score will be submitted to a higher committee of Process Owners who will then validate/moderate (make an assessment whether it is in line with other scores that they are seeing) this score and use it to evaluate the applicable Performance Allowance

For all appraisals, in addition to the above, the evaluations the Functional Head will appraise the person on Effectiveness (Relative to his peers how good or effective is the person at his job) on a scale of A, B, C.

Each person will be appraised by the Management Board on Criticality (conditions for which are described in the section on “Salary Structure”)

9.3 Managerial Ability Appraisal

oA managerial appraisal will be required of persons who are in positions from where promotion to a next Primary Level is possible i.e. in Sub-level 1 of any Primary Level.oA managerial appraisal will be done by the Functional Head and will be used to determine the ‘promotability’ of a person. The Functional head will merely recommend whether a person is promotable. An actual decision on promotion will be made by a ‘Promotion Committee’. Needless to say a person will only be considered promotable when he is performing better than 50% on his Performance score.

10.Training

Training is the responsibility of a person’s Functional Head. The HR Department is merely a facilitator for the training. It is the responsibility of the Functional Head to identify the training needs of his subordinate, make time for his subordinate to receive such training, encourage his subordinate to receive training and finally to evaluate the quality of the training and provide feedback to the HR Department.

11.Linkage of Policy Decisions & HR Initiatives to HR Objectives

11.1 Identify, Nurture and Retain Key Talent

a.Enforce and Reward Job Rotation (the rule that an employee cannot be promoted from one Primary Level to the next without one job rotation, ‘Star’ system)b.Enforce job transferabilityc.Criticality rating based compensationd.Need based training system (mapping of skills, knowledge and qualifications and appraisal based on this mapping)e.Internal recruitment to take precedence over external recruitmentf.Flatter organization structure (by enforcing a 4 level reporting structure and disallowing reporting within the same Primary Level)g.Leaner Organization Structure (by encouraging a span of control of anywhere between 4 to 6. That is, each person should have 4 to 6 persons reporting to him). With such increased responsibility, the Company should target paying more than the competitionh.Speed up Promotions / Make the Organization Younger

i. Pro-active review of persons (in sub level 1) to determine whether they are “ready for promotion”ii.Limit the ability to promote a person without growth in responsibility (by assigning a job to a specific Primary Level)iii.Allowing auto promotion at lower levels where a full appraisal is difficult (at Level 5)iv.Identification of Blockers in the growth path

11.2Reward/Encourage Merit

a. Efficiency based compensationb. Speedier promotions (as above)

11.3Reward/Encourage Team Work

a. Process Appraisal based Performance Allowanceb. Organize community events – picnics, sports etcc. Organize team oriented off-sites – trekking etc

11.4Equitable and Fair Salary Structure not Prone to Distortions

a. Uniform codified salary structure based solely on Role, Performance and Experience

b. Uniform correction mechanism for inflation. Elimination of ‘increment’ system that caused distortions

c. External recruitment only as per fitment into salary Structure

11.5Be Simple to Understand and Implement

a. Entire salary structure indexed to one numberb. No distortion of salaries by special schemesc. CTC oriented pay package

12.Attachment

HRD Manual:Attachment 1

Rotational Sets

Set 1 Set 2 Set 3Domestic MarketingExportsMaterial ProcurementLogistics

FinanceAccountsAudit

MillsCold DrawCold PilgerMaintenancePlanning & DispatchQAFinishing (incl. EFS)Stores & Raw Material

Set 4SMSCCMRolling MillMaintenanceQAQSPlanning & DispatchStores

HRD Manual: Attachment 2

Manpower Planning and Recruitment

1.Requirement Generation and Approval for Recruitment

1.1 Based on Annual Budgeting

oEach individual Department, in consultation with the HR Department, will prepare organization charts giving details of the manpower required to meet their departmental objectives for the forthcoming financial year and these will be prepared before the 1st of January every year. This list should include the requirement for Graduate Trainees for the year.oThe HR Department will consolidate the organization charts and present the same to the Managing Director for review.oBased on the recommendations of the MD, the HR Department will make appropriate changes and send the revised Organization Charts to the CEO for his approval. oOn obtaining the CEO’s approval, the HR Department, in consultation with the concerned Departments, will prepare a Annual Manpower Recruitment Plan which will include: the list of vacancies, the job description for each position; educational requirement; skill sets; competencies; experience required; the age profile; the level; and the time frame in which the vacancy needs to be filled up. oThe above Annual Manpower Recruitment Plan will be submitted to the Management Board. The MB would review the recruitment performance of the HR Department against this plan.

1.2 Following a Vacancy

oAs soon as a vacancy arises a Promotion Review will be triggered.oIf the outcome of the Promotion Review is that no suitable candidate is found for promotion then the vacancy will automatically qualify for filling.oIf the above process results in a candidate being found for promotion then the secondary vacancy will once again trigger the Promotion Review process. This process will repeat itself till a vacancy is created which cannot be filled through promotion. This vacancy will qualify for filling automatically

1.3 Based on a New Requirement (Ad hoc)

oAny Department Head may, based on need, raise and submit a duly filled manpower Requisition Form (See Appendix 1) to the Managing Director thorough the EVP HRD. Such form must be accompanied by a revised Organization Chart showing the exact position of the prospective candidate. oBased on the recommendations of the MD and after making any modifications if required, the EVP HRD will forward the Requisition to the CEO for his approval

2.Search Process

2.1 Soliciting Applications

oThe search process will be initiated by EVP HR as soon as a vacancy is authorized for filing. oBased on the vacancy the Executive HR will create a job profileoThe Executive HR will post the details of this Vacancy and the Job Profile on all company notice boards soliciting internal applications and referrals and on the Company Website soliciting both internal as well as external applications. oSimultaneously, the EVP HR will conduct a public search for this position either through an executive search firm, advertisements, and personal referrals or through any other suitable means.oFor Graduate Trainees Only: The HR Department will contact engineering colleges in Maharashtra and other sates and invite applications. A team of recruiters consisting of representatives of Manufacturing, Quality, and Marketing would visit these colleges for campus recruitment. HR Department would coordinate this exercise. The short-listed candidates would be called for a final interview to the HO and the team that would select the candidates would consist of two of the Plant Heads and a senior level Marketing Representative. oFor some select positions a ”Referral Scheme” would be used wherein existing employees of the company would be encouraged to refer candidates for employment and in case the candidates are found suitable and work in the organization for a minimum period of six months, the employee referring the candidate would be given a financial incentive.

2.2 Shortlisting Applications

oThe HR Department will sift though the applications received as a result of the above process and produce a ‘first-cut’ shortlist of suitable candidates.

oThe complete list, with the screened candidates highlighted, would be sent to the Head of the concerned Department for his/her review/comments/approval.

oAll candidates who are called for interview would be required to fill up a Personal Data Form

2.3 Graduate Trainees

o The HR Department will contact engineering colleges in Maharashtra and other States and invite applications. A team of recruiters consisting of representatives of Manufacturing, Quality, and Marketing would visit these colleges to shortlist candidates for a final interview. The EVP HR would coordinate this exercise.

2.4 Level 5 Candidates

The Executive HR will call all short-listed candidates for Level 5 positions for a written test/interview to the HO within 3 weeks of having completed the short-listing process.These candidates would have to go through a 90 minute written test to evaluate their capabilities in the area of their specialization, basic science, general aptitude, logic, and language. The Executive HR will be responsible for conducting this test. Management cadre candidates (4.3 to 1.1) would not be required to undergo any written test.The cut off percentage for selection would be 50%. However, EVP HR would use his/her discretion to lower the cut off percentage only if he/she is convinced that the instrument of evaluation has not reflected the capabilities of the candidate correctly. A justification for deviating from the policy has to be recorded by EVP HR on the evaluation sheet.

2.5 Interview

oCandidates who have made the Final Shortlist and those Level 5 candidates who have passed the test will be interviewed by a panel consisting of the expert in the area of the specialization, the head of the Plant/Department for which the candidate is being considered, and a representative of the HR Department. oFor Graduate Trainees Only: The team that will interview the candidates will consist of two of the Plant Heads and a senior level Marketing Representative.

oThe interviewers will highlight, in writing, their specific observations and will either recommend or reject a candidate for employment. This decision has to be consensual and in case there is a difference of opinion amongst the members of the interview panel, the candidate in question will not be considered.oThereafter, the recommended candidate(s) would be interviewed by the President (CS&D)/MD/CEO (at least by two of these persons) and approved/rejected for appointment.oAll candidates who are called for interview and rejected will be informed accordingly within a week of the final interview.

2.6 Negotiation and Contract Finalization

oThe HR Department will discuss salary details with the selected candidates, make an offer and if required negotiate the offer within the Company’s salary structure and policy guidelines. oIf the offer is acceptable to the candidate, based on his verbal consent, he will be asked to go for a pre-employment medical check-up to a designated clinic. Outstation candidates would be given the option of undergoing the prescribed examination/test (Appendix 2) by qualified general practitioner.oIf the candidate clears the fitness test an offer letter signed by the HR Department will be sent to the candidate by post/e-mail in a prescribed format. oThe period given to the candidate for joining the Company will generally be 30 days. However, exceptions may be made in consulting with the requisitioning department and the candidate.oOn the day of joining, a formal letter of appointment signed by the President (CS&D) for levels 4 to 1 employees and by the Head of HRD for level 5 will be issued.oA copy of the acceptance letter, duly signed by the incumbent, will be maintained in his personal file by the HR Department. The Executive HR will send a copy of this acceptance letter along with a copy of the Joining Report, PF Form, Gratuity Nomination form, Bank Account Opening Form, Medical Insurance Form to the Accounts Department for processing the payroll and one copy to Secretarial Dept. for PF and SA inclusion. oThe HR Department would share the salary details with the selected candidates and seek acceptance before making the offer. The offer made, would be based on the grade already fixed and approved and the rating would be either BC/BB. However, in some critical positions and exceptional cases the rating can be upgraded after taking management approval.

7 Induction of New Persons (External Recruitments)

oThe Company will not induct a new person into a Primary Role at a higher salary than others in that Primary Level. In order to induce the new incumbent to move we will, if required and pursuant to the specific approval of the President (CS&D):oWhen identifying persons for external recruitment we must ensure that the person is being promoted through the process of recruitment. In other words he should not be moving laterally from his previous organization into our Company. If a lateral movement is taking place chances are (for the reasons described above) that we are paying him more than market salary.

2.8 Induction

oUpon joining, the incumbent would have to show the HR Department the originals of his/her certificates and testimonials. The HR Department will then make photocopies of these documents, the EVP HR would sign them ‘as having seen the original’ and retain them for our records. It is vital that the originals be seen by EVP HR. The proof of DOB and the year of passing the relevant qualifying degree is a must. oOn the day of joining, a formal letter of appointment signed by the President (CS&D) for levels 4 to 1 employees and by the Head of HRD for level 5 would be issued.oA copy of acceptance duly signed by the incumbent would be in his personal file maintained in the HR Department. A copy would, also, be sent to the Accounts Department for processing the payroll. oThe HR Department will inform the Administration Department in the HO or respective plants about the date of joining and the department where the incumbent would be posted and request to make arrangements for incumbent. oThe EVP HR will send a letter of introduction (hard copy) to all Departmental Heads and post it on all company notice boards. Soft copies would be sent to all on the HR/ER mailing list. oThe HR Department would prepare an Induction Plan and an Induction Kit for the incumbent. The induction Kit will include (i) schedule of introductory meetings with a pre-defined set of persons (ii) introductory literature on the company (iii) a written brief on company policies. This hands-off approach by the HR Department is being deployed for making the incumbent independent and providing the opportunity for faster and effective enrollment in the team.

2.9 Probation & Confirmation

• The probation period for all Executive and Management cadre employees (5.3A to 1.1 grades) would be one year.

• Probation is a period for learning and all support must be extended to the new employee to help him/her to adjust to the new environment.

• Those who join between the 1st and 15th of the month will be confirmed on the 1st of the month and those who join between the 16th

and last day of the month will be confirmed effective the 1st of the following month.

• Within one month of joining, the Process Owner/Functional Head will - in consultation with the probationer - complete the annual goal setting exercise for employees in levels 1 to 4 and a copy of this would be kept in the Personal file of the employee for reference and evaluation.

• The Process Owner/Functional Head will carry out a review of the performance of the probationer as against the defined goals after six months and send the report to HR Department.

• HRD Department will initiate the confirmation appraisal on a prescribed format which will be processed on the basis of the performance review vis-à-vis the goals that have been set and the appraisal recommendation at the end of the probation period (Appendix)

• The probation period may be extended by three months only either on health grounds or when the deficiencies in performance non-critical and rectifiable in the short term.

• Based on the performance review and effectiveness rating of the process owner/functional head, the CTC of the probationer would get revised on confirmation. However, the criticality of the probationer cannot be changed at the time of confirmation

• The letter of confirmation will be prepared by HRD and will be issued personally by the Reporting Officer/ Department Head.

• An employee will be deemed to be on probation till his/her confirmation is formally communicated in writing.

The notice period applicable during probation and after confirmation is:

On Probation ConfirmationManagement Employees 30 days 90 daysTrainees 30 days


Recruitment Standards

Incumbents would have to fit into the norms specified on the minimum experience and maximum age and this is as given:

1.Overall Standards

Prescribed Norm Experience Min. (yrs)

Age Max.(yrs)

Level 1 15 45Level 2 12 40Level 3 8 35Level 4 5 30

Recruitment of employees in Level 5 will be made against sanctioned vacancies and as per laid down standards. For higher-level recruitment, the experience and age profiled in the above chart holds good.

1.1 Technical Candidates should be Graduate in Engineering (Diploma Holders could be considered for some positions in levels 5 and 4).

Candidates should be Graduate/Diploma holders in Engineering with minimum experience as under:

Level Qualification Experience (yrs)

Age Range (yrs)

5.3

Diploma 2/3 22 to 25

5.2 Degree 2/3 25 to 28

1.2 Techno-Commercial(Marketing, Materials, etc)

Candidates should be Graduate in Engineering with minimum expereince as under :

Level Qualification Experience(Yrs) Age Range (yrs)

5.2 Engineering Degree 2/3 25 to 28

1.3 Others (Finance, Accounts, ER, HRD, etc.)

Candidates should be Graduate in any discipline with relevant postgraduate professional qualifications with minimum experience as under:

Qualifications and age can be relaxed only very special cases and with the approval of the President (CS&D).

Level Qualification Experience (yrs)

Age Range (yrs)

5.2 CA/ICWA/CS/MBA 2/3 25 to 28M.Com, etc


Designations

The designation of employees in the different Levels would be as follows:

Level 1 – Executive Vice President

Level 2 – Vice President

Level 3 – Associate Vice President

Level 4 – Assistant Vice President

Level 5 - Executive

However, for internal purposes, an employee’s position is defined by a combination of his Primary Role, Department & Level. For example: Mill Manager, Production, (Level 2, 1).


Recruitment of GT’s

Fresh Engineering Graduates with a first class academic record/background will be recruited as Graduate Engineer Trainees:

At the beginning of the year (Calendar) all Department Heads would send their requirement of Graduate Trainees to the HR Department. HR Department would contact engineering colleges in Maharashtra and other states and invite applications. A team of recruiters consisting of representatives of Manufacturing, Quality, and Marketing would visit these colleges for campus recruitment. HR Department would coordinate this exercise. The team would make a corporate presentation to give an overview of the opportunities that ISMT Limited has to offer. The short-listed candidates would be called for a final interview to the HO and the team that would select the candidates would consist of two of the Plant Heads and a senior level Marketing Representative.

The Management of the Company would, in consultation with the HR Department, decide on the number of Graduate Engineer Trainees that are to be recruited every year. These trainees would undergo training in different locations in manufacturing processes and at the end of the year placed in different departments based on an evaluation of their skills, knowledge and aptitude. As trainees they would be given stipend.

The training programme would be a combination of class room and on the job exposure and each trainee would have to work on a specific project that would reflect his understanding of the different processes and the ability to add value to the same.


Recruitment of Retainer category

Candidates may also be considered for appointment on a retainer ship basis for a fixed term basis of 6 months to 1 year, which may be further extended on mutual agreement.

Compensation will be on a consolidated sum per month with tax deducted at source as applicable

Employees retiring from the Company on superannuating may also, upon approval of the management, be appointed on retainer basis.


Probation and Confirmation

Employees will be appointed on probation for a period of one year from the date of joining.

Probation is a period for learning and review and all support must be extended to the new employee to help him/her to adjust to the new environment.

Those who join between the 1st and 15th of the month will be confirmed on the 1st of the month and those who join between the 16th and last day of the month will be confirmed effective the 1st of the following month.

Within one month of joining, the Supervisor will - in consultation with the probationer - complete the annual goal setting exercise for employees in levels 1 to 4 and a copy of this would be kept in the Personal file of the employee for reference and evaluation.

The supervisor would carry out a review of the performance of the probationer as against the defined goals after six months and send the report to HR department.

Corporate HRD will initiate the confirmation appraisal which will be processed on the basis of the performance review vis-à-vis the goals that have been set and the appraisal recommendation at the end of the probation period.

The probation period may be extended by three months only either on health grounds or when the deficiencies in performance are non-critical and rectifiable in the short term.

The letter of confirmation will be prepared by HRD and will be issued personally by the Reporting Officer/ Department Head.

An employee will be deemed to be on probation till his/her confirmation is formally communicated in writing.

The notice period applicable during probation and after confirmation is:

On Probation ConfirmationManagement Employees 30 days 90 daysTrainees 30 days


Promotion of Staff Category to Managerial Level

1.Eligibility Criteria

1.1 QualificationOperational Jobs in the Plants: Graduation – ITI would be preferredOther Jobs: Graduation

1.2 ExperienceMinimum of 15 years and 10 years in ISMT

1.3 AgeNot less than 40 years

1.4 Existing PositionStaff – Top 2 levelsWorkmen – Top 2 levels

1.5 Other AttributesHigh level of integritySound knowledge of area of specializationGood presentabilityGood analytical capabilitiesEffective basic level communication skillsGood inter-personal relations

2.Identification of Positions

At the beginning of the year, the HRD Department in collaboration with the Heads of the Plants and the Heads of Departments in the HO would prepare a list of Executive level positions that need to be filled up through internal promotions.

This list would be presented to the Management Board for approval.

At the plants the number of such positions should not exceed one position per shift per Department

3.Selection Procedure

After the approval is obtained, notices would be put at the appropriate places to seek applications from interested internal candidates. The notice would clearly define the eligibility criteria, the job description, the format of the application, and the last date of submission of the application.

The review of the applications and the first short listing of the candidates would be done by the HRD Department.

A committee would interview these candidates and it would comprise of:

For Positions in Plant AExecutive DirectorHead of Plant BHead of relevant Department in Plant BHead of HRD

For Positions in Plant BExecutive DirectorHead of Plant AHead of relevant Department in Plant AHead of HRD

For Positions in JejuriExecutive DirectorHead of Plant A or BHead of relevant Department in Plant A or BHead of HRD

For Positions in HOExecutive DirectorSenior management representative (Not from the Department for which the position is being filled) Head of HRD

The short-listed would be interviewed by the Managing Director for final selection. The administrative formalities of upgrading the selected candidates would be carried out with one week of the final selection.


Training

The HR Department will endeavor to provide a minimum average of 2 man days of training per year per employee.

For Graduate Trainees

• The training programme for Graduate Trainees would be predefined. • It would be a combination of class room and on the job exposure and each trainee

would have to work on a specific project that would reflect his understanding of the different processes and the ability to add value to the same.

For All Others

• Training for all other employees would be need based. • Each job is associated with a set of Knowledge and Skills (this requires a one

time exercise to be conducted and then periodically updated and reviewed)• The input to the Training program is the Knowledge Appraisal to be done by the

Functional Head and which will provide a Knowledge/Skill Gap Analysis. • Based on a compilation of all the Gap Analyses the EVP HR will put together a

training calendar. This would be prepared annually and would be circulated to all Department Heads to seek nominations. The calendar would specify details of the course content, faculty, duration of the training, and the location.

• In preparing the training calendar the HR Department would ensure that the overall cost of training is within the approved training budget. This budget is prepared annually and is a part of the HR budget that is incorporated in the overall company level budget.

• All HOD’s would ensure that the employees in their department meet the organizational training objective.

• The nomination for overseas training is strictly based on distinct value addition to the organization. This would require the approval of M.D/CEO along with recommendations of the respective Head of the Plant or Departmental Head.

• Employees nominated for overseas training will be required to sign a bond requiring them to continue in employment with the Company for a minimum period of three years from the date of return from such training.

Evaluation

All employees undergoing training would be required to fill up an evaluation form (Annexure) to help the HR Department to improve the efficacy of the training programme. The Process Owner/Functional Head will be required to fill up Effectiveness Form - only in case the training duration is more than 6 hours - after 3 months of the participant having attended the training programme.


Transfer

All transfers will be based on the opportunities of career development of the employee and also the vacancies in the Department /Location and this will be done through the Performance Appraisal system

The transfer of such employees would be facilitated by the HR Department in consultation with the Concerned HOD’s.

The proposal for transfer would be approved by the MD.

The transfer order will be issued by the HR Department. Copies will be forwarded to concerned departments and the Accounts Department.

The employee will be eligible for assistance from the Company to facilitate the relocation, where the transfer involves change in place of posting.

Employees who are going on a PERMANENT TRANSFER will be allowed special leave with full pay for a period of 5 days to enable them to make suitable arrangements for shifting their families, household goods, luggage etc. This special leave may be availed by the employee as per their convenience any time within three months of the date of their transfer notice. Such special leave is allowed only once for each transfer

For Travel related expenses please refer to the policy on Joining and Transfer Expenses.


Inter Company Transfer

The management at its discretion can transfer employees between companies within the group. While Consultation with the employee is essential, consent is not obligatory.

Written proposal of transfer should be made to HRD department by the representative of the management initiating the transfer and that should be duly approved by the CEO.

HRD will issue relevant letter of transfer.

The employee will be governed by the rules/regulations of the new company from the date of the transfer order.

There will be no Transfer leave for joining in cases where transfers do not involve change of place of posting.

Other conditions:

1. All leave and payments due to the employee on the date of transfer will be carried over to his credit in the company transferred.

2. All loans and advances repayable by him on their existing terms and conditions will be transferred to his account in the new company.

3. The transfer will not constitute a break in service

4. Where transfers involve change in city, transfer leave for joining, traveling allowance and shifting allowance and shifting expenses as applicable for inter-company transfers will be admissible by the Company to which the employee is transferred.


DeputationTo meet short term specialized manpower requirements, reassignment of management employees from one location to another or from one Company to another (within the Group) may be effected by way of deputation.

An employee on deputation will continue to be on the rolls of the original Department/Company and there will be no change in the salary and allowances.

An employee can be on deputation for a maximum period of six months, at the end of which a decision must be taken to either terminate the deputation or if his/her services are still required consider an extension of a period not exceeding three months. The person on deputation cannot, in any case, get more than two extensions of durations each not exceeding three months.

All proposals for deputation would have to be initiated by Head of the Department/Company seeking an employee on deputation. These proposals should be sent to the HRD Department and should have:

A brief description of the job:• A statement on the knowledge and skills desired from the job holder.• The duration for which the job holder would be required on deputation.• A brief profile of the specific person – in case the person has been identified; and • The consent of the Head of the Department/Company in which the person that has

been identified is employed – in case that has been done.

All proposals for intra – company deputation shall have to be approved by the Managing Director and those relating to inter – company deputations shall have to be cleared by the CEO.

An employee on deputation - only in case it when there is a change in place of his/her residence - will be eligible for the following:

A deputation allowance as per the following structure:Level 1 & 2 Rs 11,000 pmLevel 3 & 4 Rs 9,000 pmLevel 5 Rs 6,000 pm

However, if guest house accommodation (this would include board and lodge) is available and the employee on deputation avails the same, the applicable deputation allowance would be:

Level 1 & 2 Rs 8,000 pmLevel 3 & 4 Rs 6,000 pmLevel 5 Rs 3,000 pm

Travel expenses from place of posting on deputation to the place of permanent posting on an off day once in two months would be entitled. Eligibility will be as per travel rules.


Separation1.Exit Interview

All employees upon having submitted notice of resignation will undergo an exit interview.

Exit Interview will be conducted by the head of the Division/EVP-HRD/President (CS&D).

Relevant points arising out of the interview will be addressed and if required communicated to the concerned persons.

2.Separation Procedure

As an employee submits his/her resignation, the HRD Department will be immediately informed.

The employee will be requested to fill the Exit Interview Form.

An exit interview will be conducted by the Department Head within 3 days, who will record his comments on the form and forward it to HRD through Plant Head for Works cases and through respective Divisional Heads for HO cases. This will also include recommendation for acceptance of resignation.

The employee's Exit and Feedback Form will be forwarded to HRD, after which he/she will be met by an HR representative.

Any feedback relevant to any Department/person will be given within a fortnight of the exit interview by HR. In case of sensitive information, this feedback will be given after the employee leaves, wherever appropriate.

If both the concerned Department Head and HRD agree that the resignation should be accepted, the same will be immediately put up for MD's approval.

Recommendation regarding terms of release, i.e. notice period, and date of release will also be made by HRD.

3.Final Settlement

On receiving information of an employee's intent to resign, HRD/Personnel Department will inform Accounts Department so as to keep track of salary/advances/recoveries, etc.

For computing final settlement, notice period would normally be reckoned as under:

During probation 1 month (30 days) After confirmation 3 months (90 days)

On receiving the notice of resignation, the company reserves the right to accept the resignation with immediate effect before the expiry of date of notice period, in which case the employee will be paid notice pay salary, for the days of the notice period not actually worked.

On the other hand, if the employee is unwilling to serve the entire notice period, an amount equal to the salary for the corresponding period of notice period not served will be recovered from him. Alternatively, the shortfall in notice period may be adjusted against PL due. Balance PL, after adjustment against the notice period, will be encashed.

For the purpose of notice pay, salary will mean basic salary and special allowance, which will also be the basis of encashment of accumulated PL.

The company may, however, at its sole discretion release the resigning employee at the date earlier than the applicable notice period. This discretion to release him at an earlier date, shall rest only with the Company and the authority to exercise the discretion to waive notice pay shall rest with MD/CEO.

The employee will be entitled to all allowances / reimbursements up to the last date of actual working on pro-rata basis. Accounts department will compute the net amount payable / recoverable from the employee after taking into account the notice pay, salary, loans and advances etc.

Once the Company agrees to relieve an employee, he will be issued a clearance form by HRD.

HRD Department at HO/Personnel Department at Works shall initiate action to get a status of dues owed by the employee to the Company on account of loans viz. Furniture, Rent Deposit, Vehicle and Co-op. Society, and on account of HDFC line of credit. The employee's leave balance shall also be ascertained. Such intimation shall be furnished by the concerned departments in the clearance form.

It is the employee's responsibility to return the duly filled up form to HRD/Personnel Department within the stipulated time i.e. 1 week before his/her last working day.

In case an employee has availed of an HDFC loan through the Company's Line of Credit, immediate action shall be initiated by the employee to convert the loan into an individual one. The employee will be required to submit a letter from HDFC confirming that the same has been effected.

In case the employee is a guarantor for a loan taken by another employee, arrangement for alternate guarantors shall be made.

The Time Office will ensure that no PL is availed during the notice period and immediately report any irregular attendance on the part of the employee to the Works Personnel Department. Personnel Department in turn shall ensure that irregularities, if any, will be reported to HRD before salary for each month is processed, i.e by the 27th of each month.

HRD will submit details of attendance; leave balance and the clearance certificate to Accounts Department 3 days before the last working day of the employee to enable them to draw up the full and final statement.

Dues on account of superannuation, where payable as per rules, shall be included in the final settlement. For those falling within the purview of Payment of Bonus Act, amount due, if any towards bonus will be settled only after bonus, if any, is declared.

A copy of the statement of Full and Final settlement shall be submitted to HRD by the Accounts Department, certifying correctness. The settlement pertaining to Full & Final dues shall be done before the employee leaving the organization. HRD will release the relieving letter, duly signed by MD/Authorized Signatory, only after settlement of all dues by the resigning employee.

Exceptions to the above, if any, may be made at the discretion of the management.

The following documents will be issued only after the Full and Final accounts have been settled.

• The relieving letter• Service Certificate• Settlement/transfer of PF

4.Restrictions on Leave During Notice Period

PL cannot be normally availed of during the notice period. In case availed, without proper authorization the same will be treated as without pay.

CL/FL as per rules can be availed of. Casual leave due cannot be set off against the notice period.

In case, however, CL/FL taken exceeds the pro-rata entitlement then such excess CL/FL may be adjusted against PL/recovered in case specifically so communicated by HRD/Personnel Dept. in the final attendance statement.

5.Abandonment of Services

Employees leaving without resigning will be treated as unauthorized absentee up to 7 days after which they will be deemed to have abandoned the employment. Their service will be terminated on ground of such abandonment after 7 days of issue of notice to report for duty. The notice will be sent by HRD by registered post.


Retirement

1. Procedure

HRD will identify all personnel due for retirement, every 6 months, i.e. on 1st January and 1st July.

The 1st January list will be for the forthcoming period July - December. The 1st July list will be for the forthcoming period of January - June.

The list will be reviewed by Head of HRD for decisions regarding extension of service, if any.

Concerned employees will be informed of the date of retirement, three months in advance, in order that formalities in connection with the same commence.

Formalities for settlement of final dues will be done in accordance with the procedures on `Final Settlement'.

Retiring employee, on MD's approval, will be entitled to one month's basic salary towards meeting resettlement expenses.

HRD will issue a circular 15 days in advance, informing about the retiring employee(s)

2.Extension of Service on Retirement Reappointment

Service will be extended / reemployed for a period not exceeding two years, at a time.

Identification of such cases will be decided at least six months in advance, when the retirement list is under review by Head of HRD and will require the approval of MD and CEO.

In case an extension required to be given to an employee, concurrence of the concerned employee would also need to be obtained in advance (at least three months).

The terms and conditions of service during the extended period would normally continue to remain the same as were prevailing on the due date of retirement.

The management may also consider the option of reappointment on retirement, on a retainership basis. In such a case the employee will be retired on the due date with full settlement.

Terms and conditions of service on reappointment need not be the same as while in regular service. However, the last drawn salary could be protected. There shall be no contribution to retirement schemes of the Company.

The date of retirement for all permanent employees would be the last day of the month in which they attain the age of superannuation.

Example: An employee who turns 58 on 10th of January would officially retire from service on the last day of January i.e. 31st. However, in case an employee turns 58 on the last day of the month the effective date of his retirement would remain the same.


Personnel Administration

1.Payroll Facilitation (Attendance)

An attendance register/recording system is provided which includes the names of all employees.

All relevant details, including leave and outstation duty details should be recorded in the register.

The Company's Head Office has an eight hour working day, with a 30 minute break for lunch. The working hours are from 9 am to 5.30 pm with the lunch break from 1.00 pm to 1.30 pm.

On Saturdays, the HO works from 9 am to 1.00 pm.

Sunday is the weekly holiday at the H.O.

Every employee is required to sign the attendance in the attendance register provided at the reception.

Five minutes grace has been allowed.

Attendance after 9.05 a.m. will be considered as late reporting.

Any employee attending after 9.05 a.m. is required to sign the late register available with the HRD dept. The time at which an employee signs the register is taken as the time of reporting.

Any employee attending after 9.05 a.m. on account of official/outstation duty (OD) is required to fill the Attendance Regularization Form and after obtaining permission of the Divisional Head to regularize attendance, submit the same to HRD on the same day, failing which attendance will not be regularized.

Reporting beyond 9.05 a.m. and up to 9.30 am, will be allowed/ regularized for not more than two times a month (corresponding to salary period). From the third occasion onwards the employee will forego half day Casual Leave (CL) or the same will be treated as half-day leave without pay.

Employee availing leave in the first half will also be required to sign the Late Register for recording attendance.

After 9.05 a.m. all cases of unrecorded attendance in register will be marked in red. On submission of the attendance regularization form, HRD will mark the attendance with a 'P'. No employee may sign in the register, overwriting the red mark.

Attendance, not regularized on the same day, will be treated as absence from duty.

Leave Cards, regularization form for OD and late attendance must be made available to HRD regularly and in time so that data to salary section can be sent by the 26th of each month.

Any of the following abbreviated entries will be made in the attendance register:

Casual Leave CLFestival Leave FLPrivilege Leave PLOutstation Duty ODPresent (i.e. regularized)

P

Maternity Leave MLLeave without Pay LWPCompensation Off CO

Such entries will be made only after due authorization on the leave card, regularization form etc.

These guidelines will be applicable for the Works also appropriately corresponding to the respective timings prevalent at each location.

2.Payroll Facilitation (Leave)

Leave is granted subject to exigencies of work and at the discretion of the Department Head.

Application of leave and its approval is recorded on the employees leave card.

All leave entitlements coincide with and are determined for the calendar year, January to December.

Employees joining/leaving at any time during this period would get pro-rated leave.

Leave record of all management employees (Level 1 to 5) shall be maintained by the ER Department of the Plants and by Corporate HRD for employees of HO.

2.1Leave EntitlementEmployees are allowed leave as follows:

CL (days)

FL (days) PL (days)

Permanent & Probation

7 3 30

Temporary - 2.5 days per monthTrainee 7 3 21 days (will accrue

during training Period)

2.2Casual Leave

All probationers, graduate trainees/management trainees and permanent employees will be eligible for CL @ 7 days per annum.

CL can be taken up to a maximum of 3 days at a time.

CL can be availed up to a maximum of 4 days in the first 6 months and balance can be availed of during the second half of the year. CL will be credited at the beginning of the calendar year.

CL may be availed as half or full day leave.

CL cannot be pre-fixed or suffixed to either Privilege or Festival leave or Compensatory off.

Unutilized CL at the end of the year will not be carried forward to the next year. These would be cash compensated on a pro-rata basis on the basic salary in the month of December. This amount would be a part of the January salary.

2.3Festival Leave

All probationers, officer trainees, and permanent employees will be eligible for FL @ 3 days per annum.

FL can be taken from one day to all three days at a time.

Half day FL will not be allowed.

FL cannot be prefixed or suffixed to CL or PL or Compensatory off.

FL will be credited at the beginning of the calendar year.

Unutilized FL at the end of the year will not be carried forward to the next year and would be cash compensated on a pro-rata basis on the basic salary in the month of December. This amount would be a part of the January salary.

2.4Privilege Leave

All employees will be eligible for Privilege Leave @ 30 days per annum.

PL can be normally availed only after 11 months of continuous service in case of employees on probation and on completion of training in the case of Trainees.

PL will accrue for each calendar year and will be credited only at the end of that year and may be availed of in the subsequent year.

This leave should be planned on an annual basis. Request for annual leave should be made in January. Leave programme in the form of Leave Roster shall be compiled by each department and submitted to MD's Office.

PL for 7 days or more may be availed after giving a prior notice of fifteen days to the Head of Department.

PL may be taken for not less than 3 days at a time.

The 30 days of PL will include Sundays/weekly offs falling in the period of leave.

PL cannot be prefixed or suffixed to Casual or Festival Leave.

PL can be taken only on three separate occasions during any period of the year.

PL will accrue on calendar year basis and will be credited at the beginning of each year (as on 1st January)

PL may be accumulated up to a maximum of 90 days.

2.5 Leave Application & Approval

HR Department at HO and ER Departments at Works will, at the beginning of every calendar year, issue each employee a fresh leave card (after receiving the old card) duly completed in respect of leave due. The cards shall be kept in the custody of each individual.

An employee wishing to take leave will make the appropriate entries and present it to his Superior/Department Head for approval. In case of PL, the approval of the Divisional Head will also be required.

The leave card will then be sent to the HR Department, where the particulars will be noted in the attendance muster and individual leave record sheet. Leave cards will be immediately returned to each employee.

All leave cards will be returned to HRD at the end of the year, after which only fresh cards will be issued.

New employees joining during the year will be issued a leave card giving details of CL and FL eligible for the remaining part of the year, calculated on a pro-rata basis. PL accrued for the part of the year up to 31st

December will be credited to the employee's account on 1st January of the following year.

Sanctioning authority will be as under in the case of Privilege Leave. In other cases i.e. FL/CL, the sanctioning authority would be the same as in PL:

Sanctioning AuthorityLevel 5 Level 4 or aboveLevel 4 Level 3 or aboveLevel 3 Level 2 or aboveLevel 1 CEO/MD/CFO/President

(Projects)andPresident (CS&D)/JMD

All leave should be pre-sanctioned excepting in cases of sickness/emergencies etc. In case of pre-sanction not been taken, regularization must be done within 3 days of resumption of duty.

Any leave applied for after CL/FL has been exhausted, which is for less than 3 days at a time, and which is approved by the Department Head will be treated as authorized absence. Such absence will be without pay.

2.6Transfer Leave

Employees who are transferred will be allowed transfer leave with full pay for a period of 5 days to enable them to make suitable arrangements for shifting their families and household goods. This special leave may be availed by the employee as per their convenience any time within three months of the date of their transfer. Such special leave is allowed only once for each transfer.

2.7Maternity Leave

All female employees will be eligible for maternity leave for the first two confinements only.

The total leave given will be 12 weeks inclusive of confinement period. At the option of the employee it may be taken as pre-natal and/or post-natal but 12 weeks continuous leave is to be taken.

Two months advance notice/application is to be given to the Head of the Department by the employee wishing to take maternity leave.

This leave will be treated at par with privilege leave for the purpose of payment of salary and allowances.

Every employee entitled to maternity benefit under Maternity Benefit Act 1961 will also be entitled to receive Rs. 250/- as medical bonus. The said medical bonus shall be paid by the Company only to such female employees eligible for maternity benefit under the Maternity Benefit Act 1961 and only on the conditions and under the circumstances and to the extent stipulated therein.

2.8Paid Holidays

All employees will be eligible for 5 paid holidays in a calendar year.

These dates will be announced at the beginning of each year.

2.9Approving Authority

The list of Holidays for all locations will be approved by CEO/MD.

2.10Accumulation & Encashment of PL

Accumulation of Privilege Leave up to 90 days and also encashment of accumulation above 30 days, to the extent and on terms enumerated below:

2.10.1 Extent

Minimum of 10 days and maximum 30 days in any calendar year.

2.10.2 Pre-conditions

Within the above limits, the number of days of encashment will not exceed the number of days of PL actually availed of during the current calendar year.

Minimum balance of 30 days PL after encashment.

Salary for the purpose of encashment would mean Basic Pay only.

Leave encashment would be taxable as per law.

The leave encashment provision that is being brought into effect in 2007 would not be applicable to employees who are 55 years and above on 1st January 2007.

2.11Leave Entitlement – Retainers & Temporary

Leave will accrue on a calendar year basis @ 2.5 days per month.

Leave can be availed either as: Casual leave; or Vacation Leave

Casual leave can be availed either 1 day at a time or up to 3 consecutive days, in any case not exceeding a total of 9 days in each calendar year.

Vacation leave (VL) may be availed on not more than three occasions in a year. VL may be taken for not less than 4 days at a time. VL needs to be

applied for at least 15 days in advance, and will be approved based on exigencies of work. VL will include any weekly offs/Sundays falling in the period of leave and either prefixed or suffixed to the leave.

CL and VL cannot be combined.

Normally, VL will be allowed only after it has accrued to the credit of the employee, and will not exceed 21 days in a calendar year.

Entitlement of leave will be eligible on a prorated basis where service periods are less than one year. Leave availed in excess of entitlement will be treated as without pay.

Un-availed VL at the end of the year, to the extent of maximum 10 days, will be encashed. Balance will lapse.

Encashment will be a part of the January salary and will be calculated @ 30% of monthly retainer fee. List of such retainers will be provided to Accounts by HRD/P&A in January each year.


Insurance Policies

The coverage under the Group Personal Accident Policy (GPAP) and the Group Health Insurance Policy (GHIP) has been modified to make it more employee-friendly.

1.GPAP

The grade-wise limits for employees are as follows:

Grade Gross Sum InsuredLevel 1 15,00,000Level 2 12,00,000Level 3 10,00,000Level 4 8,00,000Level 5 5,00,000Staff 1,00,000Retainers 1,00,000

2.GHIP

The Company has taken a floater policy under which the entire family (Self + Spouse + two children + Parents) would be covered wherein one policy takes care of the hospitalization expenses of the family as defined above.

This policy takes care of all the medical expenses during sudden illness, surgeries and accidents. The total value of the coverage is Rs 2,00,000 and from within this amount the coverage available for parents is restricted to 50% i.e., Rs 1,00,000.


Accomodation

Executives and above joining at any of the establishments of the Company either on transfer or afresh may on recommendation of the concerned Plant Head/HR/ER Head be offered the facility of free accommodation at the Company's hostel/flat or at a hotel/guest house etc. of the Company's choice. Such free accommodation will be for a period not exceeding 7 days.

In case of stay at hotel, club etc. no other charges other than the boarding & lodging charges will be borne by the Company. Expenses incurred which are of a personal nature, e.g. liquor, cigarettes etc., will not be borne by the Company.

Such accommodation will normally be bachelor accommodation. In exceptional cases, for Asst. VP and above, family accommodation on the same basis may be provided.

In exceptional circumstances, after taking the approval from the Plant Head/HR Head, the employee is allowed, to stay at a hotel etc. or at the Company’s Guest House beyond 7 days.

Deductions will be made at the following rate:

1.If put up at a hotel etc., deduction of proportionate HRA for the period beyond 7 days.

2.If put up at the Company Guest House, a flat deduction @ Rs. 150/- per day (per head) towards cost of meals and services for stay beyond 7 days. Such period will in no case exceed 30 days.

Administration Department will keep HRD informed of the number of days/persons for which charges are to be deducted.

Administration Department will be informed to make the necessary arrangements for such lodging and the necessary travel arrangements.

1.Family/Bachelor Accommodation

1.1 Jejuri

Furnished accommodation is provided at the residential colony

1 Bedroom Studio apartment Rs. 100/- pm 2 Bedroom Flat Rs. 150/- pm

Electricity charges are borne by the employee. Presently the monthly charges are Rs. 110/-

The Company deducts 10% of basic salary per month towards provision of such accommodation.

1.2 Baramati

The Company has a residential colony with 52 flats in the MIDC residential zone.

Accommodation is provided depending upon the Grade of the employeeElectricity and water charges are borne by the Company

The Company deducts 10% of basic salary per month towards provision of such accommodation.

1.3 Ahmednagar

The Company presently has a Trainee accommodation facility, which bachelor officers are permitted to avail of on basis of availability.

Service charge of Rs. 100/- pm is deducted from salary.

The Company deducts 10% of basic per month towards provision of such accommodation.

Officers wishing to avail of this facility may do so after applying in writing to HR Department, and receiving their written authorization. This includes Officers who wish to continue availing the facility on completion of their training.

The premises would be vacated by the Officer on prior notice of one month being submitted in writing either by the Officer or by the Company.

2.Accommodation for Trainees

Furnished hostel accommodation with mess facility is provided to Trainee Officers (detailed in the next section).

If the trainee is transferred from Works to Head Office, a sum of Rs. 750/- per month will be paid as metro Allowance to a trainee, if Company accommodation is not provided.

This allowance will be withdrawn on completion of training.

Residential Facilities for Executives and Trainees

3.Terms & Conditions:

PUNE (Rs. pm)

NAGAR(Rs. Pm)

BARAMATI (Rs.pm)

JEJURI(Rs. pm)

Graduate Trainees

100/- 100/- 100/- 100/-

Trainees Supervisors

50/- 50/- 50/- 50/-

Trainees For the training period prescribed

Rent deduction will be directly made from salary each month.

Electricity and water charges are borne by the Company 4.MESS MEMBERSHIP

NAGAR and: Membership of the Mess is compulsory for allJEJURI residents, and the rules/terms laid down by the mess

Committee will prevail.

BARAMATI: Mess facilities are not provided.

PUNE: Mess facilities are not provided.

5.Guest House

Guest House facilities will normally be available for outstation employees and guests of the Company/Group Companies visiting Pune/Nagar/ Baramati/Jejuri on official work.

Bookings in Guest Houses will require at least two days' intimation to the respective Administration Departments, and will be subject to the availability and approval by the concerned authorities.

Details are as under:

5.1 At Pune

Guest House facility is available at A-9, Flat No. 618, Eden Garden, Pune Nagar Road, Pune - 411 014.

The Guest House has 3 Bedrooms and can accommodate up to 5 persons.

There is a full-time caretaker and full boarding facility can be provided.For bookings, Administration Department at ISMT HO may be contacted.

Travel Department has to check first for the availability of Guest House before arranging for Hotel Bookings for executives travelling to Pune.

5.2 At Ahmednagar

The Guest House facility is available at, Cottage Corner, M I D C Road, Ahmednagar - 414 111

The Guest House can accommodate up to 8 persons.

Department Head will submit accommodation requisition form duly filled in to the Works ER. Accordingly booking will be made.

No liquor will be served to outside Guest unless approved by Head of Works. Prior approval in this regard to be obtained and submitted to the Club Manager well in advance.

Only Break Fast and dinner will be served at Cottage Corner.

The Guest/Employee will endorse his signature on each bill against the facility availed.

No original bill to be given to Guest/Employee. No cash transaction will be entertained.

The bill to be submitted to Accounts after certification of Administration Department along with requisition form for reimbursement to Seamless Club.

5.3 At Baramati

The Guest House facility is available at ISMT Residential Colony, R-1, MIDC, Baramati.

Bookings have to be done through the HRD/ER Department at Baramati

There are two guest houses - one for MD and Directors, having 3rooms and the other for Management Employees and outside guests, having 5 rooms.

Cook/Canteen facility is available.

6.Vacating Premises (For Executives and Trainees)

Notice for vacating of premises:

Trainee: Premises will be required to be vacated within one month of completion of the Training period.

Executives wishing to avail of this facility may do so for a period not exceeding 6 months after applying in writing to HR Department, and receiving their written authorization. This includes Executives who wish to continue availing the facility on completion of their training.

Allotment of accommodation both for Trainees and Executives whether on single or twin sharing basis will depend on availability and will be at the entire discretion of the management.

Electricity and water charges will be borne by the Company.

The Company will arrange for major repairs/maintenance of the premises. Routine day-to-day maintenance will be undertaken by residents themselves.

It will be the responsibility of the residents to ensure cleanliness of the premises and proper maintenance of items provided by the Company. Replacement of damaged or lost items will be the collective responsibility of the residents.

Guests/relations will not be permitted to stay on the premises.

Summary and strict disciplinary action will be taken against any employee staying unauthorized in the Company flat or accommodating any unauthorized person in it.

The facility at Pune would be made available on need basis at the discretion of the Company


HOUSING

The HRA has been fixed at 50% of the Basic Salary irrespective of the form in which it is availed – lease or allowance. For all those who have availed the facility of leased accommodation at 60% of the Basic Salary, could continue with the same arrangement and the Company would deduct 10% of the Basic Salary. However, all those employees who have taken houses on rent from their spouses would either have to give proof of the exclusive ownership of the spouse of the leased property or shift to availing the house rend as an allowance.

The Management employees can be advanced a loan to meet the deposit to be placed with the landlord. The company will give the loan only to the employee and will not place the deposit directly with the landlord.

The maximum amount of the loan would be limited to 6 months basic pay. The eligible amount can be drawn by the employee on the basis of the application to be approved by Head of HRD.

The loan shall carry 9% interest per annum.

The loan shall be repaid in 36 equal monthly installments.


Provident Fund

ISMT Limited Provident Fund Trust is recognized under the Income - Tax Act, 1961 by the Income Tax Commissioner. Mumbai and has also obtained exemption under Section 17(1) (a) of the PF Act from the Central Provident Fund Commissioner, New Delhi.

There are two sets of employees' who are covered - The details are as follows

Excluded Employees

The "excluded employees" are those employees: -

Whose basic salary exceeds Rs.5,000/- p.m. at the time of joining the Company and;

Who have never been members of The Employees Pension Scheme (EPS), 1995 earlier before joining

Hence their own contribution and Company's contribution to PF (@12% of basic (where applicable) respectively is wholly a PF corpus which is deposited in the PF Trust A/c. Such employees are not eligible for pension under the EPS.

Such employees are governed by the provisions of the Income Tax Act, 1961 and The Income Tax Rules, 1962.

Covered Employees

All Management cadre employees who are not excluded employees are the "covered employees' and are members of The Employees' Pension Scheme (EPS)1995.

The employees' contribution to PF @12% on basic is recovered from his/her salary and deposited in the Trust A/c. The Company contributes @12% of basic out of which 8.33% (subject to a maximum of Rs.417/- p.m.) is remitted to the PF office for depositing in EPS. The balance of the Company's contribution (i.e. 3.67% + the amount in excess of Rs.417/- p.m.) is deposited in the PF Trust A/c.

Such employees' are governed by the provisions of The Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

The Trust maintains the PF record of the individual employee and credits the interest to the A/c. of the individual employee.(presently, the rate of interest is 12% p.a.)

On separation, the employee may opt for transferring his PF & EPS accumulations or for settlement of the same.

The contributions remitted to the employee's A/c under EPS can be withdrawn by the employee in case he had contributed towards this scheme for less than 10 years.

After the employee has completed 10 years service, he is eligible for a monthly pension as per the provisions of the EPS.


Superannuation

All managers drawing basic salary exceeding Rs 5000/- p.m. and all officers drawing basic salary and special allowance exceeding Rs. 5000/- p.m.

Policy and Procedures

Contribution @15% of annual salary (as defined above) of the eligible employees' is remitted to the Superannuation Fund by the Company at the end of every financial year.

The Trust maintains a record of the individual employee and credits the interest to the A/c. of the individual employee.

On separation the employee may opt to either transfer his SAF A/c. to his new employer or settle his A/c. In case of settlement the employee will get half commutation of annuity in case he does not receive gratuity. In case he receives gratuity, he will get 1/3rd commutation of the annuity.

In both the above cases, Income Tax will be deducted at source on the annuity commuted. The balance annuity (after commutation) lies with LIC on which the employee receives a pension directly from LIC. The employee may opt for the Scheme of Pension, which he desires out of the 5 schemes presently available from LIC, outlined in Annexure I.

Managers and Officers falling below the eligibility limit will be entitled to receive the amount as exgratia/bonus, payable during Diwali. Such payment will cease immediately upon the employee becoming eligible to join the Superannuation Scheme Trust.

Schemes of Pension

Benefits on Normal Retirement Date

Upon the separation of a Member, the pension shall be paid to the member monthly under any one of the alternative types of Pensions described

Life Pension with Guaranteed payments for 15 years

A pension payable for 15 years, and continued thereafter during his lifetime. The Pension will be paid for the benefit of the member himself during his lifetime. In the event of the member's death within 15 years after retirement, the pension will continue to be paid for the benefit of the beneficiary until the balance of the guaranteed installments shall have been paid.

Optional life pension with guaranteed payments for 10 years

A pension payable for 10 years, and continued thereafter during his lifetime. The pension will be paid for the benefit of the Member himself during his lifetime. In event of the Member's death within 10 years after retirement, the pension will continue to be paid for the benefit of the beneficiary until the balance of the guaranteed installments have been paid.

Optional life pension with guaranteed payments for 5 years

A pension payable for 5 years, and continued thereafter during his lifetime. The pension will be paid for the benefit of the Member himself during his lifetime. In the event of the member's death within 5 years after retirement, the pension will continue to be paid for the benefit of the Beneficiary until the balance of the guaranteed installments have been paid.

Optional pension ceasing at death (without any guaranteed payments):

A pension payable throughout the duration of his lifetime only, the last installment payable, being that due just prior to the date of death.

Optional Life pension ceasing at death with Return of member's accumulation/Cash Option/Purchase price applied for purchase of Pension

A pension payable throughout the duration of his lifetime only, the last installment payable being that due just prior to the date of death. On death of the Annuitant an amount equal to the members Accumulation/Cash Option/Purchase Price applied for purchase of pension will be payable along with any Group Pension Terminal Bonus that may be declared by the Corporation.


GRATUITY

Gratuity is payable to the eligible employees' @ 15 days of last salary drawn basic + DA (where applicable) per year of service. For the purpose of calculating gratuity, one day's salary is arrived at by dividing a month's salary by 26.

Additional Gratuity

Management employees separating from the Company on account of Superannuation/resignation would be entitled to additional gratuity as follows:

Period of Service Additional Gratuity Amount

1. Employees who have worked for 10 years and more but not exceeding 15 years

50% of the amount of gratuity worked out as per normal computation

2. Employees who have worked for 15 years or more but less than 20 years

75% of the amount of gratuity worked out as per normal computation

3. Employees who have worked for 20 years or more

100% of the amount of gratuity worked out as per computation

The additional gratuity amount shall be paid as ex-gratia payment and shall be taxable in the hands of the employee in the year of receipt.

The HR department shall in all eligible cases; raise a separate note for approval of the MD and the Accounts Department shall pay such additional gratuity amount upon receipt of MD's approval.


Domestic Travel Policy

The Company has a prescribed table of expenses admissible to management level employees on tour on official duty giving details of:

• Tariff and board allowances in case hotel accommodation is availed; • Daily Allowance rates for own arrangements;• Mode of inter-city and local travel; and• Classification of A, B and C class of cities. A list of the class À' and `B' cities is

specified and the rest of places shall be deemed to be `C' class cities,

Hotel Accommodation

The table below gives details of the permissible allowance: Permissible Allowances Hotel Accommodation

Allowances For Own Arrangements *

CLASS OF CITIES A B C A B CLevel 1 & 2 Tariff (Rs) 3500 2500 1500 1500 1000 750

Board 40% 50% 60%Misc. Exp Rs) 200 150 100

Level 3 & 4 Tariff (Rs) 3000 2000 1250 1250 750 500Board 40% 50% 60%Misc. Exp Rs) 150 100 75Level 5Tariff (Rs) 2000 1250 1000 750 500 300Board 40% 50% 60%

* Daily allowance entitlement in case an employee likes to make his/her own stay arrangements.

Mode of Travel

Inter - City TravelLevel 1 to 4 Air (Economy – cheapest available

airline/fare), Rail - Any Class, Private/Share Taxis

Level 5 Rail - II Class AC and Below, Share Taxis Intra City Travel

Level 1 to 4 Taxis, Private Car (where and when taxies are not available)

Level 5 Taxis (where and when auto rickshaws not available), local trains.

Staff Local trains/buses, auto rickshaws

Classification of Cities

A Class Bangalore, Calcutta, Chennai, Delhi, Hyderabad, MumbaiB Class Ahmedabad, Ahmednagar, Aurangabad, Baroda, Bhopal, Baramati,

Bhubaneshwar, Cochin, Chandigarh, Dehradun, Guwahati, Goa, Indore, Jabalpur, Jaipur, Jamshedpur, Kanpur, Lucknow, Lonavala, Khopoli, Nagpur, Nasik, Pune, Patna, Trivandrum, Vizag, Coimbatore, Varanasi

C Class All others

i. Maximum limits of actual hotel tariff (excluding taxes);ii. Expenses admissible on board up to a specified percentage of tariff; and.iii. Sundry miscellaneous expenses

Travel section will arrange hotel bookings according to limits admissible

A list of approved hotels is maintained by the Administration. Department for various grades and all personnel in respective grades are allowed to stay in approved hotels irrespective of the hotel tariff prevailing at the time of booking.

Administration Department will periodically identify and standardize suitable hotels in different cities, appropriate to different grades. They will negotiate for tariff/rates/discounts and ensure that employees are booked in these hotels.

A list of approved hotels is available with the Travel Department. For all cities, hotel bookings shall be done in accordance with and within the limits of the approved hotel tariff.

In cases where the name of any hotel does not figure in the approved list, employees are free to stay in any other hotels provided the hotel tariff does not exceed the enclosed approved tariff limit.

For approved hotels, room booking, unless specified in the list, will be done for ordinary rooms by whatever name called. However, in the event of non-availability, superior room may be booked provided the room tariff is within the approved tariff limit. If due to exigencies of work, employees have to stay in hotels outside the permitted ceiling, then prior/post-facto approval of the authority sanctioning the travel would be taken.

In respect of boarding expenses, the percentage as given in the table of tariff limit will apply. However, in case of employees staying in hotel as per approved list, where the room tariff is higher than the approved tariff, such percentage would be applied to the actual tariff charged.

In case of arrangements at any of the Company's Guest Houses, including Cottage Corner, Incidental Allowance as defined in Clause 5.4 will be admissible. No Daily Allowance is eligible.

Miscellaneous expenses are intended to cover expenses such as tips, laundry, portage and other minor out-of-pocket expenses.

Daily Allowance (DA)

An employee may, while on outstation travel, opt for making own lodging/boarding arrangements, in which case Daily Allowance as specified in the table will be applicable.

Daily allowance is intended to cover expenses such as meals, beverages, laundry, portage, tips and other out-of-pocket expenses incurred per calendar day basis away from Head Office/place of posting.

Daily allowance may be claimed as per the following guidelines. A full day will be calculated in units of 24 hours from the start time.

1. For same day travel Prescribed % of DA

i. For travel involving less than 12 hours 25%ii. For travel involving more than 12 hours but less than 24 hours

50%

2.For other travel involving more than 24 hours

i. For first 24 hours and corresponding multiples thereof

100%

ii. For Residual portion of less than24 hoursLess than 5 hours NilMore than five hours but less than 12 hours

25%

More than 12 hours but less than 24 hrs. 50%

The above has been further elucidated through the following examples.

EXAMPLES

Particulars Allowance applicablei. À' leaves Pune at 7.00 AM by DQ and since 24 hours returns next day at 7.30 AM by morning flight

100%

ii. À' leaves Pune by DQ at 7.00 AM and returns by Minar Express at 2.00 AM next morning

50% since less than 24 hours

iii. À' leaves at 11.00 am by flight to Bombay and returns by flight at 9.00 PM next day

125%, i.e. 100% for first 24 hours and 25% for the balance being more than 5 & less than 12 hours.

iv. À' leaves at 7.00 AM by DQ to and returns at 9.00 PM by DQ next day

150%, i.e. 100% for first 24 hours and 50% for the balance being more than 12 hours.

v. À' goes to Bombay by DQ at 7.00 AM and checks into a hotel. He returns next day evening at 6.00 PM by evening flight

No DA is eligible. Miscellaneous expenses and expenses at actuals may be claimed

Daily Allowance cannot be claimed for travel to or between the following works related locations.

1. Pune - Ahmednagar2. Pune - Baramati3. Ahmednagar - Baramati4. Ahmednagar - Jejuri5. Pune - Jejuri

Instead employees are eligible to claim Rs. 100/- as Ìncidental Allowance'. The claim is admissible for all locations other than Jejuri, for:

Same day return

each to and fro (return) trip irrespective of the number of days of outstation stay (i.e., for each trip an employee may claim Rs. 100/-)

Additionally, an employee may claim:

on snacks - at actual - while in transitconveyance expenses at the outstation location, if any

No claims will be admissible for to & fro conveyance between residence and office/pick up point/bus stand/station etc.

Employees are eligible to stay at the guest house and also avail of canteen facilities free of charge.

All employees traveling to their place of earlier residence and who have been given Guest House facilities on transfer to the HO/Plants would be entitled to only 25 percent of the permissible DA.

Travel Requisitions, Expenses, Authorization

An employee required to travel on Company business, will raise a Travel Authorization form.

Authorization for travel will on approval be forwarded by the concerned employee to the travel section for necessary travel arrangements and hotel bookings. Irrespective of any arrangements or hotel bookings to be done, the employee will have to fill up the travel requisition form and forward it to the Travel section.

Travel section will assign a serial number on the TA form, which should be mentioned on all travel expense report forms submitted and on hotel bills signed for.

All requests for travel bookings should be made in the prescribed format only. The same should be duly sanctioned by the appropriate authority.

All bookings and cancellations (if any) will be done by Travel Section only. Exceptions will be separately approved.

Advances may be drawn based on TA approval.

On return from travel, a statement of travel expenses, in the prescribed form, will be made in accordance with the framework of travel, and will be submitted to the Accounts Department, which will pass the same after verification.

Outstanding Travel advances not settled within 3 days from the date of return will be recovered from salary. Fresh advance will not be granted unless the earlier advance is settled.

Miscellaneous expenses are intended to cover tips, portage, laundry, etc., and can be claimed only in case of stay at Hotel/Guest House and not where employee has opted for own arrangements.

For any one complete trip to a single station, travel expenses must be in respect of either those related to hotel arrangements or those related to Daily Allowance for own arrangement.

For example for any outstation trip including overnight stay, an employee will be eligible for either:

- DA for both days, or- Hotel expenses/miscellaneous allowance for both days.

In the event an employee checks out of the hotel / Guest House and returns to base on that day, no DA for the remaining day will be admissible. Miscellaneous allowance for the full day may be claimed as also boarding expenses at actuals.

Expenses claimed while on tour, for hire of private taxis, telephone, photocopying, etc., must be supported by receipts where available and in case of these not being available, must be approved by respective Departmental Head before being submitted to Accounts Department.

Travel reports must include details of tickets booked by the Travel Department or by oneself and mention made whether utilized / cancelled.

Multiple bookings for the same sector will not be permitted. Details will be submitted with travel report in case of claims for ticket differences, fines, cancellations and approval sought from Division head.

In cases where DA is being claimed, expenses on food, stay, and miscellaneous expenses cannot be claimed. However, expenses incurred on conveyance, telephone, etc. can be separately claimed in the travel report.

No liquor or cigarette expenses are admissible. However, where the same are incurred with business associates, a separate approval will be obtained from MD.

When signing restaurant bills for entertainment of business associates/official guests, name(s) of the party/individual should be mentioned in all instances.

The rules constitute broad guidelines and justifiable deviations arising out of exigencies of work may be recommended by the Departmental Head concerned and approved by MD.


International Travel Policy

Entitlement & Operational Framework

America Europe OthersPer Day Per Day Per Day

Directors USD 250 USD 300 USD 225Level 1 & 2 USD 225 USD 250 USD 200 Level 3 & 4 USD 200 USD 225 USD 175Level 5 USD 175 USD 200 USD 150

This includes expenses incurred on lodging, boarding, intra city travel and out of pocket expenses and not expenses incurred on local travel to take the international flight and also fees for VISA etc. The rates mentioned above are per diem entitlements and employees traveling are not required to submit any support bills of the documents.

OPERATIONAL FRAMEWORK

All international travel request should be duly authorized by the concerned head of the department/director in the requisition form (Annexure – I). The form has to be approved in two stages by MD/CFO/President (CS&D) & finally by CEO.

OPERATIONAL FRAMEWORK

Divisional Heads will propose in writing to MD regarding officers/managers to be sent on tour, indicating purpose, duration, schedule of Travel and places to be visited, entertainment of business associates, if any, etc. along with objectives to be achieved and details of the appointment must accompany the proposal. Passport details of the individuals are to be indicated in the proposal.

Proposals of Directors’/VPs travel may be made to MD/CEO, wherever applicable

On approval, the travel department will process papers further for arranging visas, tickets, health insurance and advise Accounts for Foreign exchange.

Admn. Department will book tickets only through the Company approved agency by the most economical route. Full fare (club/ business class) tickets will be booked only for Directors.

Number of days would be computed as nights spent abroad, i.e. from the time of landing to the time of departure.

Forex entitlement will be calculated on the basis of night spent in the country of visit and transit time will not be considered for computation of number of days travelled. For release of Forex, the form (Annexure-I) should be forwarded to the respective Accounts Department at least two days prior to the departure.

For the purpose of drawing advances, it is permissible to draw an ad hoc amount of up to US $ 200 per visit over and above the entitlement for those who are not provided with credit card. This is meant to provide some cushion and is not an additional allowance

In case the employee returns earlier than the number of days for which foreign exchange has been drawn as per the approved itinerary, the excess exchange drawn cannot be utilized for any other purpose/journey and must be refunded.

The monies drawn would be treated as advance till the submission of expenses statement on return from tour abroad and unspent foreign exchange returned. Travel reports will be submitted within 7 days from the date of return. Travel advances outstanding for more than 30 days will be recovered from the salary. No second travel advance either domestic or foreign would be payable unless the account for the previous travel has been cleared.

The foreign travel expenses statement must have air ticket as support document with the expense statement

Bonds will be taken in the standard format available in case of tour for the purpose of training. The Divisional Heads will ensure the signing of the bonds by individuals before they proceed on such tour.


JOINING & TRANSFER EXPENSES

Eligibility

Employees going on PERMANENT TRANSFER OR JOINING IN THE PERMANENT CADRE (including on probation)

The eligibility for reimbursement of travel will include the employee's spouse, dependent children and dependent parents residing with the employee.

The following matrix will apply for joining as well as transfer cases for mode/class of travel and movement of personal household effects/goods.

Grade/Category

Mode/Class

Carriage ofPersonalEffects

Transporting Car

Packaging,Insurance& Octroi atactuals, butnot exceeding)

Disturbance Expenses*(Only in transfer cases, (one time), taxable and payable through HO Account on HR approval

Level 1 and 2

Level 3

Level 4

Level 5

Air (Eco)/I AC Rail

Air (Eco)/II AC Rail

II AC Rail

II AC Rail

Actuals

1 Truck Load

1 TruckLoad

1 TruckLoad

Actuals

Actuals

--

--

Actuals

Rs. 10000/-

Rs. 8000/-

Rs. 5000/-

1 MonthBasic

1 MonthBasic

1 MonthBasic

1 MonthBasic

* Disturbance expenses are intended to cover expenses like new school fees/uniforms/books for children, gratuity paid to servants staying behind, farewell parties to friends and relatives. Employees are expected to keep the relevant receipts for production at a future date.

In case an eligible employee on transfer chooses to drive down in his personal car, the reimbursement of expenses will be at actuals but not exceeding the cost of one EVK wagon.


Telephone Reimbursement

Reimbursement of expenses incurred on official calls from the land line and the mobile phones would be made after taking due approval from the immediate Departmental Head.

Reimbursement on these calls can be sought by employees in levels 1 to 4. However, employees in level 5 would have to take prior permission from the Departmental Head for being eligible for seeking ‘post approval’ reimbursement.


Marriage Gift

All employees in Levels 1 – 5 upon getting married will receive a gift cheque amount will be Rs. 5000/-

A copy of the wedding invitation card will be sent to HRD, which will then obtain a gift cheque of Rs. 5000/- from the Accounts Department at HO or Works.


Visiting Cards

Administration Department will ensure that visiting cards conform to the standards prescribed by the Company with reference to size, lettering, quality of paper etc.

Residential addresses along with phone number may be printed on the reverse of the card.

Executives and above will, with the approval of the department head, make a requisition to Administration in the prescribed format (Annexure I) giving details of name, designation, location, direct telephone numbers (if any), Residence Address and Telephone No. (if required).

Maximum number of cards printed at a time will be restricted to 200.


Car Policy

The holders of the following positions would be entitled to a completely maintained (includes fuel and repair & maintenance) Company car:

Director - CommercialDirector – QualityDirector – R&DHeads of the Plants at Ahmednagar, Baramati, and JejuriDirector – Operations


Personal Files

The personal files of all employees are maintained by the HRD. The contents of the files will normally not be available for reference by the employees.

The personal file will contain details about all correspondence between the employee and the organization. Such data would be available for the Reporting Officer of the employee if prior permission of the Divisional Head/Head of HRD is obtained.

No personal file or document from the personal records of the employee can be removed even for a temporary period, without the prior permission of the head of HRD.

If a Divisional Head wishes to go through the personal file of an employee working under him, he will have to fix up an appropriate time with the HRD to see the relevant documents.

APPENDICES

1. Manpower Requisition Form

2. Prescribed Medical Test

Appendix 1

ISMT PERSONNEL REQUISITION FORM

Number : QFH:HR:01Issue No/Date:01/2004.11.15Rev. No./Date:00/None

HRD DEPARTMENT

(To be filled up by Indenting Dept. and forwarded to HRD)

A. DETAILS OF VACANCY

Location : ___________________________

Division/Department : __________________________

Job Title :__________________________

Category : OFFICER / MANAGER

Preferred Grade :___________________________

Reporting to :___________________________

Addition / Replacement :___________________________

Internal Deployment : YES / NO Reviewed

Justification for Recruitment :

B. BRIEF JOB DESCRIPTION :

C. CANDIDATE'S PROFILE : Qualification :

Essential : _____________________ Desirable : _____________________

Age range : _____________________

No. of years experience : _____________________

Specific experience : _____________________ required, if any _____________________

_____________________

Any other information :

Page 1 of 2

ISMT PERSONNEL REQUISITION FORM

Number : QFH:HR:01Issue No/Date:01/2004.11.15Rev. No./Date:00/None

D. INDENTED BY :

Name :Designation : Signature/Date

E. RECOMMENDATION OF DIVN. HEAD

Name :Designation : Signature/Date

______________________________________________________________________________

COMMENTS BY HRD

1. Internal deployment has been/not been reviewed and is/is not feasible2. Requisition is/is not as per the approved Org. Chart3. Estimated period for placement is _____ weeks

Signature/Date

CORPORATE APPROVAL

Signature/Date

For use by HRD (Record details of recruitment - Source, Offer made, Joining etc.)

Page 2 of 2

Appendix 2

Pre- employment Medical check up.

1. Haemogram2. Urine routine3. Blood sugar random4. Blood group & RH factor5. ECG6. Physical Examination7. Opthal Check (Colour blindness)8. Chest X-ray

Physical examination

Documents

ISMT LIMITED