Document # Procedure for Compensation & Benefits Wages & Salary STM-6 Weaving Unit PURPOSE The purpose

of this procedure is to ensure and maintain the following Revision Effective date Page

STM/SA/8.8/2 0 1/6

The company has ensured that wages paid for a standard working month which meets at least legal or minimum standards and is sufficient to meet the basic requirements of personal and their families. The company has ensured that the deductions from wages are not made for disciplinary practices, and has ensured that wages and benefits composition are clearly informed to the workers. The organization has ensured that wages and benefits are rendered in full compliance with all applicable laws and that compensation is rendered either in cash or Cheques form in a manner convenient to employees and in conformity with local labor laws. SCOPE This procedure is applicable at all levels of STM-6 Weaving Unit. RESPONSIBILITIES Admin Manager Accounts Manager Management Representative To monitor remuneration as per Labor laws To update the wages records To ensure that wages & salaries are paid as per law

PROCEDURE

In STM-6 Weaving Unit, wages are set in such a manner that they earned for regular hours worked (i.e. not more then 48 hours) are sufficient for the workers and his / her dependents for food, cloth, and shelter. If due to urgent business needs the organization wants its employees to work for extra working hours, the employees stay free to make decisions for overtime. If an employee works for extra hours voluntarily, the maximum limit is 2 hours daily or 12 hours per week and 48 hours per month. The overtime is paid at double the rate of the regular pay as per local Labor laws.

6. DEDUCTIONS The company ensures that deductions from wages are not made for disciplinary purposes. Deductions from the salaries of the employees are made on the following grounds. o o Loan Installments Income Tax

7. PAYMENT MODES

Salaries are paid monthly basis through cash / cheque in a manner convenient to the employees.

Document # Procedure for Compensation & Benefits Wages & Salary STM-6 Weaving Unit
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Revision Effective date Page

Salaries are paid up to 7 of each month through cash for those employees, drawing up to 10,000/- per month and the employees who are getting salary above 10,000/- are paid through Bank. Salaries are paid on working days

INCREMENTS Increment is based on the annual performance appraisal systems. 9. BENEFITS / FACILITIES FOR EMPLOYEES. S. # 1 2 3 4 5 6 7 8 9 10 11 11 12 Title of the Benefit Minimum Wages Gratuity Sick Leaves Casual Leaves Annual Leaves Social Security EOBI Group Life Insurance Overtime Medical Facility Transportation Advance Against Salary Canteen Description Rs. 6000 / = for Un - Skilled workers as per Govt. rules As per Government Policy As per Government Rules As per Government Rules As per Government Rules As per Government Rules As per Government Rules As per Government Rules As per Government Rules As per Company policy As per Company policy Up to One third of Gross Salary At subsidized rates

RELATED DOCUMENTS Monthly Salary Policy

Doc#: STM/SA/8.8/1

Document # Over Time Policy STM-6 Weaving Unit Revision Effective date Page

STM/SA/8.8/3 0 3/6

The company strongly condemns overtime work of employees; it indicates the improper planning on part of management and/or inefficient working of employees. Department Heads / In-charges must manage the work load in specific time with approved sanctioned strength for their department. We believe on Zero Overtime working 48 hrs working per week One day rest after six working days Over Time Procedure: Due to Urgent Business Needs or avoid interruption in operations if it is unavoidable to work overtime, the following policy shall be applicable: No worker will be forced to work more than normal working hours without his consent for the overtime. Prior approval from Manager concerned must be obtained to qualify for overtime compensation. The overtime must be sanctioned by the Department Head & Final approvel will be give by General Manager. Department incharges Head must submit Overtime Approval Form with time office with an explanation of reason. The periods of work of a worker shall be so arranged that working hour shall not be spread over more than (10)ten hours in any day( 8-hours duty+2-hours O.T ). Normally working hours are not more than ( 8 Hrs 1-hr interval)asper W/H, Policy.

Overtime Payment: 0 o o Overtime will be paid at double rate,not at ordinary R.O Pay. If work is performed on festival holidays, the worker will be paid at the rate of twice his ordinary rate of pay. Overtime will be paid by the cashier twice in a month.( Fortnightly )

Method of Calculation of Over Time: For Example: Rate of Pay Gross P.D R.O Pay R.O P. P.HR Working Hrs:2HR Double : Rs. 7000/= : Rs. 7000/26 : Rs.269.23 / 8 : Rs. 33.65 x 2 : Rs. 67.30 x 2

= 269.23 = 33.65 = 67.30 = 134.60

Document # Procedure for Compensation & Benefits STM-6 Weaving Unit Revision Effective date Page

STM/SA/8.8/1 0 4/6

Employees at STM-6 Weaving Unit also receive following benefits as per their entitlement: Annual Bonus th. Every permanent employee who has completed ninety (90) days of his employment on June 30 is entitled for the bonus of 30 days (one month) by law, in case of profit. Its management discretion to decide the quantum of bonus, however all employees are rewarded equally based on their salaries. We at STM-6 Weaving Unit has always rewarded more than the bottom line for last many years. In case the service of an employee is less than a year but more than ninety (90) days, the bonus shall be paid for the employment period only on pro rata basis. Gratuity Only those employees who have successfully completed one year of service shall be entitled for gratuity, the year will start from the date of joining. The amount of gratuity is calculated as per law. If an employee leaves the service and has completed 180 days of service during the last year shall be entitled for a complete year gratuity. The period less than 180 days shall not be counted towards calculation of gratuity. The income tax deduction on gratuity shall be applicable as per Income Tax Law. Income Tax STM-6 Weaving Unit deducts income tax at source as per income tax laws and deposit to income tax department every month. Employees falling in this category can obtain salary slip showing income tax deduction for the purpose of their tax returns. Presently STM-6 Weaving Unit shares some part of income tax contribution with employee. For further information/ clarification on this policy, employee can contact Accounts Manager.

Medical Allowance Employees who are not members of Punjab Employees Social Security Institution are entitled for medical allowance @ 4 % of the salary. Management reserves the right to bring any change in medical policy for the mutual benefit of the organization and employees. In case of incident/ injury at work place, all employees are provided with First Aid facilities on the spot followed by complete treatment from hospital. All expenses for such treatment are born by the company as per law.

Punjab Employees Social Security Institution All workers drawing wage up to Rs. 10,000/- per month are members of Punjab Employee Social Security Institution. The company pays the contribution as per the law and no deduction is made from the employee in this regard. The employee may obtain information regarding this facility from the administration department. The amount of social security deposited is calculated as follows: {(Earned Wages) (Special Allowances) (which applicable)} X 7% All workers registered under above mentioned scheme are entitled for Social Security benefits for themselves or their dependents in the event of sickness, employment injury or death and all other benefits stated in The Employees Social Security Ordinance 1965.

Document # Procedure for Compensation & Benefits STM-6 Weaving Unit Employee Old Age Benefits (EOBI) Revision Effective date Page

STM/SA/8.8/1 0 5/6

Employees old age benefit contributions are made to ensure support after retirement. All employees are covered EOBI scheme and will be entitled for old age benefits as per Employees Old Age Benefits Act. 1976. The details of benefits may be obtained from Sr. Manager Admin.

Hajj Sponsorship Policy At STM-6 Weaving Unit two employees are selected each year through lucky draw under Hajj Sponsorship Policy. Only permanent employees with a minimum of three-year service are eligible for the draw. All hajj expenses declared by the government for lucky winners are born by the company (only through bank draft submitted with Hajj Application).

Loan Policy Management has an exclusive amount reserved for payment of advances/loans to employees. An employee may apply for a loan to meet emergency requirements with following frame of eligibility: The loan is provided free of interest. The loan will be sanctioned on first come first served basis. The amount will be refunded in maximum five equal installments. The disbursement shall not exceed the pool amount. An employee can only reapply for the loan, if he has paid all previous loan installments. The existing pool of funds, available for loan/ advances to employees, may be increased as per management decision. Housing: Workers are provided accommodation facility free of cost at dormitory maintained by company at plant site. Daily newspaper, clean drinking water, canteen and provision of free gas and electricity are main features of workers welfare. In order to maintain pleasant, comfortable, healthier and hygienic environment at dormitory, living rules and regulations are posted in native language for easy understanding. The dormitory is inspected regularly to maintain it at high standards.

Canteen and Shop: Company provides quality and hygienic meals on subsidized rates to the workers at canteen. The common use items, food products and fresh fruits are available at controlled rates at the shop maintained in the dormitory.

Pray Room: Pray room is maintained in dormitory for prayers

Document # Leaves Per Year Policy STM-6 Weaving Unit Leave Policy: Revision Effective date Page

STM/SA/8.8/2 0 6/6

All employees are entitled for different kinds of leaves under the law. The leaves should be planned in advance and approved from competent authorities, except in case of emergency or sickness. The leave will be applied on a specific leave form. Every department Head is authorized to sanction the leave of his worker. 1). Casual Leaves 10 days (with pay in one year) 2). Sick Leaves 16 days with half pay or 8 days with full pay (with in a year) 3). Annual Leaves 14 days (with pay after one year of service) 4). Festival Holidays (Declared by Government) 1. CASUAL LEAVES Every employee is entitled for ten days casual leave with full pay during a year. The leave should be availed in case of extreme emergency or should be planned in advance. Maximum three leaves can be availed at a time, however in case of emergency the complete quota can be exhausted at once. 2. SICK LEAVES Every employee is entitled for eight days sick leave with full pay or sixteen days with half pay during a year. The leave will only be granted at the advice of authorized medical practitioner. In case of prolonged illness the casual and annual leave in the account can be granted. 3. ANNUAL LEAVES Every employee who has completed one year of continues service shall be entitled to Annual Leaves with full pay for 14 days. To provide recreation and relief to the workers, once due the annual leave is scheduled at the earliest. It is discouraged to encash annual leave; however employees not covered under Payment of Wages Act, 1936 may ask for encashment at their personal request. Unveiled Annual Leave can be accumulated to the next year; however, the total number of holidays shall not exceed 28 days. (for details contact Sr. Manager Admin) In case of resignation or termination of an employee, he will be paid for the balance of annual leave at the rate equivalent to the daily wages calculated as per the law under section 49-c of Factory Act 1934. 4. FESTIVAL HOLIDAYS Every employee is entitled for festival holidays with pay declared by the Government of Pakistan and Labour Department. 5. WEEKLY HOLIDAYS/ COMPENSATORY HOLIDAY One day rest after six working days is granted to all employees. Department Heads/ In-charges ensure that no worker shall work on his rest day. Under unavoidable circumstances, if workers are required to work on weekly holiday will be granted compensatory leave on one of the three days immediately before or after his working day.