HUMAN RESOURCE POLICY GUIDELINES LEAVE TRAVEL ASSISTANCE POLICY

OBJECTIVE To provide as a measure of welfare, travel assistance to the employees of the Company and members of their families for visiting their Home Town/any place in India.

SCOPE

This policy is applicable to all the permanent employees working with Asia MotorWorks Ltd, India.

GENERAL GUIDELINES

The Company will provide Leave Travel Assistance (LTA) to its employee every year which is a part of the CTC.

As per Income Tax Act 1961, LTA for two journeys in a block of four years are exempted from income tax. The current block period is 2006 09 (1st January 2006 to 31st December 2009). LTA is exempted from Income Tax in respect of employee,

spouse, dependant children and dependant parents. EXPLANATION An employee thus can avail LTA twice in a block of 4 years once for traveling to his home town only and once for the journey to any place in India including his home town. The concession to visit any place in India is adjustable against the concession to visit home town to which an employee is eligible at the time of undertaking the journey to visit any place in India.

In case, an employee does not utilize the LTA before the end of financial year as on 31st March, the same shall be carried forward for utilization in the subsequent year.

Policy No. HRC/0009

Date : 02.05.09

The exemption under Income Tax on expenditure under LTA head is available to the following extent:

I.

Air / Rail or any other mode of transport from Head Quarters to a specified place and back.

II.

Where journey is performed by Air, economy class fare by National Carrier by shortest route or amount spent which ever is less.

III.

Where journey is performed by Rail, amount of first class air- conditions fare by shortest route or amount spent which ever is less.

IV.

Where place of destination of journey is not connected by rail or air, the first class or deluxe class fare on Public transport system shall be allowed.

V.

The quantum of exemption is limited to the actual expenditure incurred on the journey.

VI.

Where the journey is performed by a circuitous route, the exemption is limited to what is admissible by the shortest route. Likewise, where the journey is performed in a circular form touching different places, the exemption will be limited to what is admissible for the journey from the place of origin to the farthest point reached, by the shortest route.

VII.

Where journey between places connected by rail or a part thereof is performed by road by public transport or chartered bus, reimbursement will be on the basis of the railway fare by the entitled class by the shortest route or on the basis of actual expenses, whichever is less. Where such journey is performed by private car (registered in the employees own name), the cost of propulsion being borne by the employee himself, reimbursement will be equivalent to what would have been admissible had the journey been performed by rail by the entitled class by the shortest route.

VIII.

The exemption is strictly limited to expenses on air fare, rail fare, and bus fare only. No other expenses, like scooter charges at ends, portage expenses during the journey and lodging / boarding expenses will qualify for exemption.

Policy No. HRC/0009

Date : 02.05.09

IX.

Exemption on travel concession will not be eligible to more than two surviving children of an individual born.

ELIGIBILITY FOR CLAIMING THE LTA

To become eligible for reimbursement of LTA, the employee should avail of minimum five days of Privilege Leave during the period journey/s are undertaken. The reimbursement will be made on actual based on submission of copy of journey tickets and boarding passes for the air journeys and original tickets for train or other journeys. If the employee surrenders train ticket/s at exit point at railway station, then he is required to submit photocopy of the ticket along with a declaration to the effect that the original ticket has been surrendered to the Railway Authority.

In case of Advance LTA the entire amount as per the eligibility will be paid along with the salary. Advance LTA claim should be settled with one month time of the travel. If the same is not settled with a month then the same will be taxed in the next month Salary.

Advance LTA can be released one month before the travel date.

In cases where the LTA claimed by the employees is less then the eligibility then, the same shall be refunded to the concerned employee after deducting income tax at the end of the financial year in which the LTA is claimed.

To apply for LTA / advance LTA, please fill up the prescribed form which is available on the Intranet.

SUBMISSION OF CLAIMS The claims for LTA to any place in India shall be submitted within one month of the completion of the return journey and shall be supported by appropriate proof of the journeys having been performed (e.g. Air ticket, Boarding passes, railway ticket numbers, bus/taxi numbers, cash receipts etc). Where advance was sanctioned, the balance should be refunded while submitting the final bill, failing which it will be recovered from the salary of the employee.

Policy No. HRC/0009

Date : 02.05.09

OTHER

To avail IT benefits, employees should produce proof of Travel as per the Income Tax Act.

Employee can club the LTA if they have not availed the LTA in the previous year. Recovery of LTA will be done on a pro rata basis for those employees who resign from the services of the company and have claimed LTA in that financial year.

As far as taxability of LTA is concerned, Income Tax Act will be referred and will be applicable to all the employees.

The company reserves to itself the right to modify, amend or cancel any of these rules without notice.

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Policy No. HRC/0009

Date : 02.05.09

APPLICATION FORM FOR LEAVE TRAVEL ASSISTANCE

To, HR DEPARTMENT I am proceeding. on PL for __________________ days from _________________Kindly sanction Leave Travel Assistance to me for the year____________________.

Applicant's Signature :__________________ Name :______________________________ Date :___________ Employee Code:________________

(For HR. Dept.) Leave Balance as on 1st January LT.A. eligibility P.L. Sanctioned Whether LTA drawn during proceeding year Days worked during proceeding year : __________________Days : Prorata / Full : From :_____________ To ________________ : Yes / No : _____________ Days

Sanctioned Rs._____________(Rupees _____________________________________________)

_________________________ Sanctioned by

_____________________________ Approved by

Policy No. HRC/0009

Date : 02.05.09