Car Policy

7/25/2019 Car Policy

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Company Car Policy, 1st October, 2011

Disclaimer: The intent of the policy document is to make it as

comprehensive as possible, however if there is any situation that may arisewhich has not been comprehended under the policy, it would need to be

raised to the respective Supervisor and HR for any exceptions/approvals

COMPANY CAR

POLICY


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Subject matter: Car Policy

Effective Date of Policy:October 1st, 2011

Scope of policy:

This policy is applicable to all full time exempt employees1and full time

employees in specific bands subject to meeting prescribed conditions as

mentioned in the ensuing sheets.

Purpose of this policy:

To lay down guidelines for providing Company cars to eligible employees ofAmerican Express in India.

1This refers to all the Exempt employees of American Express (Band 28 and above)


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Key changes to previous policy:

Higher car price entitlement at every band levelEmployee canchoose any car in the specified price range at the band level.

Flexibility to decide on car in the permitted Price range, Car tenure

and Car operating expense (COE) at the Band level.

Transport Allowance entitlement amount to increase for some bands.

Actual car depreciation value could vary by employee; based on carprice, car tenure and COE and therefore allowing added flexibility to

the employee based on his role, travel requirements etc.

Added transparency to employees to understand the Car Benefit

entitlements applicable


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Policy Index

1.0 Key Definitions

1.1 Summary of Policy Requirements

2.0 Detailed Policy requirements

3.0 Policy Owner

4.0 Implementation


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1.0 Key Definitions:

Car Benefit Entitlement: Consists of Car Operating Expenses andCar Depreciation and varies by band.

Car Operating Expenses: Expenses towards running of the car

typically qualify as Car Operating expenses. These include fuel, repair& maintenance, parking, washing charges, toll charges and out of

pocket expenses for insurance claim settlements.

Band-wise Car depreciation entitlement: This is the band-wisemaximum Car depreciation entitlement amount. The actual car

depreciation value could vary by employee; based on car price, cartenure opted and COE.

Actual Car depreciation: It is the amount calculated as per the car

calculator that decides the actual car depreciation applicable to the

employees car. This is determined on the basis of combination of

factors, listed below:

Ex-show room price (final value post discounts, if any) Car Tenure opted by employee

Cost of Funds

Registration cost and Road Tax

Insurance

The actual car benefit entitlements, once fixed (at the time of

purchase) will not change until buy-back of car/expiry of tenure of thecar.


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1.1

Summary of Policy:

Eligibility

All employees in Band 30 and above are eligible, except

in World Services & Global Credit Administration (WS

& GCA) where eligibility is for B35 and above

employees. (assuming that the personal/ special

allowance is a positive amount after the transport

allowance component in the employees compensation

structure is at the highest limit for that band level)

Effective Date October 1, 2011

Option

Eligible employees can choose to receive the Transport

Allowance or opt for the Company Car Scheme.

Employee will be on Transport Allowance by default,

till he opts for the Company Car Scheme as per the

terms of this policy.

Entitlement

**Basis role & travel requirement, the Car operating Expensesentitlement may vary in the range of 50-100% of above mentioned

COE

For further details on entitlement, please refer to the

Detailed Policy Requirements section.

Band Ex Showroom

Price Range(in Lakhs)

Transport

Allowance

Car Operating

Expenses(Max entitlement)

30 15.25 149,619 36,000

35 59 273,989 72,000

40 814 388,000 100,000

45 1321.5 574,000 120,000


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2.0 Detailed Policy requirements:

Eligibility:All employees in Band 30 and above are eligible, except in World Services &

Global Credit Administration (WS & GCA) where eligibility is for B35 and

above employees. (Assuming that the personal/ adhoc allowance is a positive

amount after the transport allowance component in the employees

compensation structure is at the highest limit for that band level)

Option:

Eligible employees will continue to receive the Transport Allowance, tillthey opt to avail of the Company Car Scheme, as per policy terms.

Entitlement: For employees who choose to avail the Company carscheme, entitlement by band, is as per the following table:

Band Ex-Showroom Price Range(in INR Lakhs)

Min Max

30 100,000 525,000

35 500,000 900,000

40 800,000 1,400,000

45 1,300,000 2,150,000

On availing the Company Car scheme, employee will be eligible for CarOperating Expenses. The entitlement for CoE would vary in the range of

50-100% basis role & travel requirement.

The Actual Car depreciation will be computed basis car price, tenure and

other factors. (Refer to Annexure A for Car calculator).


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Additional Details:

Eligible employees can opt for the Company Car Scheme at any point

of time during employment with American Express. The scheme can

be used to purchase only a single car, at any point of time. Theemployee would be eligible to purchase another vehicle through the

Company scheme, only once the previous car has been bought backfrom AXP.

The minimum lock-in period for the Company Car scheme is 1 year

i.e. once an employee has purchased a car he/she cannot surrender it/buy-back before the expiry of 1 year.

The employee will be required to commit to buying back the car from

the company at the end of the Car tenure chosen. Employee needs tofill-up a declaration form for the same at the time of purchase of the

car. ( Refer Annexure B)Employee can however opt to buyback the car earlier i.e. anytime

after completion of 1 year from purchase.

The car entitlement is based on the car Ex-showroom price that is

available to the employee as per the grid above in the Entitlements

section. Employee will be eligible for Car Operating Expenses (COE). The

entitlement would vary in the range of 50-100% basis role & travel

requirement. This selection needs to be made at the time of purchasingthe car and cannot be changed during the car tenure/ till buy-back.

Employee can choose amongst 3 options for Car tenure, this can be 3,4 or 5 years. This selection needs to be made at the time of purchasing

the car, and cannot be changed during the car tenure/ till buy-back.

Cost of funds that is used in the Car calculator, to arrive at value of

Actual Car depreciation will be reviewed on an annual basis. The rateprevailing at time of car purchase will be locked-in for the entire

duration of the car tenure.(For details of applicable rate, please reach out to Payroll)

In case of car buy-back before expiration of car tenure, any over-

utilized CoE will be recovered from the employee.


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This employee car plan is applicable only for purchase of new cars.Second hand cars and Commercial vehicles are not in the scope of this

policy.

The Car price applicable for employees must be as per the amounts

fixed for the band, stated in the Entitlements Section. Request for

purchase of cars, that have an Ex-showroom price more than the

specified amounts, is not allowed, even if the employee is ready tobear the difference.

Incase employee wishes to purchase a CNG variant under the

company car scheme, the same can be done, so long as the car comeswith a Company fitted CNG Kit, subject to band-wise limits.Employee is not permitted to convert a company purchased car to

CNG by getting the kit fit separately.

Registration of company car is not possible at location/s where AXP

legal entity is not registered

The following should be clearly documented and communicated to

payroll at the time of care purchase, to determine Actual Car

depreciation:o

Ex-showroom priceo

Road Tax & Registration costo

Car tenureo

COE Option (Min/ Mid/ Max)

This information needs to be clearly filled out in the Car calculator (ReferAnnexure A) and submitted to payroll, along with rest of the documents

when availing of Company car scheme.The selection of car type, Car tenure, CoE are to be made prior to

purchase of the car and are binding /cannot be changed during the CarTenure.

In case the employees services come to an end for any reasonwhatsoever, including without limitation resignation, retirement,

termination or severance, the employee will need to contact Payroll(Refer to Annex D for Helpdesk details)to determine exact residual

value of the car. The employee would be liable to buy-back the carfrom AXP; alternately the same will be recovered from the employee

along with the Full & Final settlement. Ownership transfer fee (in case


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of an intra-state) would be borne by AXP#.

The perquisite value of thecar would be added to the taxable salary of the employee as per the

prevailing Income Tax rules.

Operating expenses for Company cars will be reimbursed by the

Company as per specified limits set out herein above. These includefuel, repairs and maintenance. If the employee chooses to engage a

personal driver, the drivers salary will not be reimbursed by theCompany. Accessories in the nature of CD player, music system, GPS

etc. are not permitted to be claimed under car operating expenses.

When an Employee gets transferred from one location to anotherwithin India (inter-state transfer), the Employee has to take the samevehicle with him at the time of transfer. AXP will arrange the NOC

(No Objection certificate) from RTO through its approved vendor andwill bear the cost of obtaining the NOC from the Traffic Authorities.

It is the responsibility of the employee/buyer to ensure completion ofthe remaining procedures/paperwork for transfer of ownership in the

destination state.It willbe the users responsibility to settle any pending challans. Any

pending challans could lead to a potential delay of transfer.

In case an employee gets transferred from one AXP India legal entityto another, the employee has to initiate transfer of ownership bysubmitting the required documents for car transfer. This is important

to ensure inclusion at the time of Insurance renewal by AXP.

In case an Employee who is already availing of the company car

scheme, is promoted and entitled to a higher model of car, he/she maychoose to, subject to minimum lock-in period guidelines:

(1)Retain the existing car & continue with existing CoE(2)

Buy back the current car and settle the dues. Post settling

dues on current car, avail of a new car as per limitsapplicable to the higher band to which he/she has been

promoted.

Under no circumstances shall the car be driven or used by a person

who is under the influence of drugs, unless prescribed by a medicalpractitioner and with a written statement from the practitioner that

driving abilities are not impaired by the prescribed drug.


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Nor shall the car be used or driven, or attempted to be driven, by aperson who would be in breach of the applicable legislation governing

the use of a car whilst under the influence of alcohol.Where the employee or any person authorized by the employee is in

breach of the above, the employee will be responsible for all damageor liabilities which may be incurred in those circumstances, including

any action for recovery of costs made against the employee byvendors, insurers or third parties.

American Express expects employees to properly use all assets in

their care. Misuse of any assets (including Company cars) would beinconsistent with the Company's expectations and will be treated as adisciplinary matter, as decided by the Leader.

The employee shall ensure that only fully licensed drivers shall bepermitted to operate the vehicle. The employee also assumes full

responsibility for ensuring compliance with all traffic regulations andany fines or liability relating to any traffic infringement.

#Pro-rated insurance Premium, for the balance period of the Insurance policy (i.e. from thedate of separation to the date of expiry of the policy), already paid by AXP to the insurance

company, will be recovered from the employee at the time of buy-back/ full & finalsettlement.

Procedure:

1.

Eligible Employees should prepare and put up an Appropriation

Request (AR) for the total cost of the car. This would include the

following:1.

Car Purchase Form

2.

Filled in Car calculator, with final selection of Car tenureand COE Option(Annexure A)

3.Proforma Invoice that mentions Ex-showroom price, Roadtax & registration cost (obtained from the vendor excluding

Insurance cost)4.Form 20 (obtained from the vendor), with all details filled

in. (Blank form 20 will not be signed)


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5.

Car undertaking on Rs. 50/- non judicial stamp paper6.

Expected date of delivery - this is required to arrange

insurance cover note7.

Signed copy of Employee Declaration form (Annexure B)

2. Within 5 working days of submitting the completed documents,employee can collect the following from Payroll:

Cheque of full value (in vendors name)

Form 20 duly signed by the company's authorized signatory

Proof of company address and copy of companys PAN

Insurance cover note (basis expected delivery date)3. Within 7 working days of purchase of the car, the employee willsubmit the following documents to ensure capitalization of the

asset:

Original Invoice and receipt for the amount of advance taken

Debit Note (towards road tax / Registration / Logistics)

Credit Note if any (towards discount offered by the vendor)

Refund cheque (if any)

One copy of RTO receipt for registration (Copy of

Registration Certificate can be submitted within 15 days) REC details (Registration No / Engine No / Chassis No) to

be mailed to TATA AIG at [email protected] 15 days without which Insurance policy will not be

issued by the Insurance Company.Please noteCOE will be processed only after date of Car capitalization.

4.

The Employee can claim the Car operating expenses as a re-

imbursement for car running & maintenance expenses, once the car

has been capitalized in companys books.Claims must be

accompanied by appropriate supporting documentation. The payout

will be taken care of by the Company payroll system and the balanceremaining for the year will display on payslip (in re-imbursementsection).

5. The car will be insured under the company scheme from Day 1 and

the copy of the policy will be sent across to the employee.

6. In case of accident/damage, it will be the responsibility of theemployee to ensure timely submission of claim to the Insurance


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Company with full details / estimates required to expeditiously settlethe claim.

7. In the event of an accident, the employee may need to pay an advancefor the repairs in such cases pending lodgments and processing of the

insurance claim; the employee will be issued a cheque on receipt fromthe insurance Company.

8. In case of theft or destruction of the Car, the Employee mustimmediately inform American Express , file

police complaint and file a valid insurance claim duly acknowledgedby the insurance company.

9.

The date of theft/ destruction is taken as date of car sale. The sale ofcar (on books) can only be initiated post settlement from insurance

company. EE bears the total cost of liability post insurance settlementif any. Till the time car is sold in the books, deduction continues. COE

can be claimed till date of theft/ destruction.10.

Any expenses, in excess of the Insurance Re-imbursement and car

operating expenses are to be solely borne by the employee.

Taxable Value of the Car:

The employees selecting the Company car scheme under the Companycar policy would be subject to taxation as per the provisions of Income

Tax laws in India. The perquisite value of the car would be added to the

taxable salary of the employee as per the prevailing Income Tax rules.

General Terms and Conditions:

1.

Insurance claim settlement - Employee vs. Employer liability

Employee would bear liability on account of accidental damage to the

company car i.e. balance post insurance claim settlement to be paid by

employee. The same however can be separately reimbursed to theemployee as part of annual car operating expenses.

2. Company car theft - Employee vs. Employer liability


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In the case of theft where there is total loss of asset, the employee wouldhave to bear the total cost of liability post insurance claim received, if

any.

4. Residual ValueThe Residual Value at the end of chosen car tenure is determined upfront

basis the Car price and Tenure chosen by the employee. The same ispopulated on the Car calculator. (Refer Annexure A)

5. Reimbursement of daily/monthly/quarterly/annual toll tax expenses

All expenses paid by an employee who has availed of the company carscheme towards road toll tax, shall be reimbursed subject to available car

operating expenses. Original bills would need to be submitted for thesame.

3.0 Policy Owner:

Human Resources / Finance

4.0 Implementation:

The above Car Policy will be introduced for all eligible employees with

effect from October 1, 2011.


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Addendum to Company Car Policy effective from October 1, 2011

Purpose and Scope:

The following addendum has been introduced to clarify certain points asapplicable to employees who have availed the company car scheme as per

the previous Car Policy document dated October 01, 2007.This document also introduces clauses applicable for the administration and

functional aspect of the policy per se.

1.

Employees who have availed the company car scheme as per theprevious car policy document dated October 01, 2007 will continue to

be on the same plan until the expiry of the 4 years from the date of carcapitalization.

2. At the end of 4 years from the date of car capitalization the employeewill need to buy back the car as per the original terms, applicable at

the time of procurement/capitalization of the car.

3.

The new car plan, referred to in this document will be applicable to

employees who join the company on or after October 1, 2011 and are

eligible to avail the car plan benefit, as well as any new car purchasesby existing employees, effective the date of October 1, 2011.


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Annexures

Annexure A

Employee Car calculator

CarCalculator-2011.xlsx

How to use the calculator?

The following needs to be inputted by the employee into the calculator:

1.

Personal & employee details:a. Employee Name

b. People Soft ID

c. Date of joiningd. Legal Entitye. Business Unit

2.

Car benefit entitlements:a. Band

b.

Location

c. Ex-showroom price (in INR)

d. Road Tax & Registration amount

3.

Car options for your purchase:a. Car tenureb.

Car opex option

Pls. be aware that the final selections need to be made on the calculator and a print-out of

the same needs to be attached with the Car purchase form to Payroll.The selections made are final and cannot be changedduring the car tenure / till buy-

back.

The Residual Value that the Car calculator displays is the Residual Value of the car, at the end of the Car

tenure. In case the car is bought-back/ employee leaves the company, before the car tenure, the Residual

value would differ. Employee can reach out to payroll for details.
https://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/CarCalculator.xlsxhttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/CarCalculator.xlsx


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Annexure B

Employee Declaration

The attached declaration form needs to be completed and signed and submitted to

the Car helpdesk at the time of purchase of car.

Car Declaration

Form.docx

Annexure C

Car purchase Checklist and forms

Car purchasechecklist.xls

Annexure D

Car buy-back Checklist and forms

Car buy-backchecklist.xls

Car Buy-backForms.xls
https://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/DeclarationCarPolicy.docxhttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/ChecklistCarPurchase.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/ChecklistCarBuyBack.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/FormsCarBuyBack.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/FormsCarBuyBack.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/ChecklistCarBuyBack.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/CarPurchaseCapitalisationforms.ziphttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/ChecklistCarPurchase.xlshttps://square.aexp.com/MyLife-Career/JAPA/PolicyCenter/MyBenefits/India/Documents/DeclarationCarPolicy.docx


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Annexure E

Payroll Helpdesk details

For Car related queries you can write in to [email protected]

Dedicated help-desk for Car related queries at Amex Campus & Cybercity.Reach out to payroll for latest schedule.
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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