Internal Policy on Salary Advance

1. Purpose

BMML Ferro Alloys Private Limited (the Company) acknowledges that employees may face genuine personal emergencies requiring short-term financial assistance. At the same time, the Company must protect its working capital to ensure uninterrupted plant operations. This policy establishes a structured, fair, and financially sustainable framework for granting salary advances, in alignment with the Service Rules.

2. Scope and Applicability

This policy applies to all regular employees of BMML Ferro Alloys Private Limited across all divisions. Current employee strength is 272 and is projected to increase to 313 in the next year.

Division-wise strength (indicative):

·       Operations: 150 employees

·       Technical: 83 employees

·       Finance & Accounts: 5 employees

·       Commercial & Support Departments (CSD): 75 employees

3. Nature of Salary Advance

·       Salary advance is interest-free.

·       It is an advance against future salary, not a long-term loan.

·       Grant of salary advance is subject to management discretion, availability of funds, and compliance with this policy.

·       Salary advance is not an automatic entitlement.

4. Eligible Grounds

Salary advance may be considered only for genuine emergencies, including:

·       Death of a dependent (spouse, children, parents)

·       Serious medical exigencies of the employee or dependents

·       Other exceptional personal emergencies, subject to approval by Management

5. Non-Emergency Nature, Not Eligible

The following shall be treated as non-emergency purposes and shall normally not qualify for salary advance:

·       Purchase of consumer durables (TV, mobile phone, laptop, home appliances, etc.)

·       Construction, renovation, or furnishing of house

·       Purchase of land, vehicle, or repayment of personal loans/EMIs

·       Credit card dues or informal borrowings from friends/relatives

·       Business investments, trading, or speculative activities

·       Travel, vacation, or leisure-related expenses

·       Marriage-related expenses,or social ceremonies

·       Any recurring or planned expenditure that could reasonably be anticipated

Routine personal expenses, lifestyle spending, or non-emergency purposes shall not normally qualify.

5. Eligibility Conditions

An employee shall be eligible to apply for salary advance subject to:

·       Minimum 12 months of continuous service inclusive of his/her probation period

·       No outstanding salary advance at the time of application

·       Satisfactory performance and disciplinary record

·       Submission of a written application with supporting documents, wherever applicable

6. Quantum of Salary Advance

·       Minimum amount: Nu. 20,000

·       Maximum amount: Nu. 40,000

·       In all cases, the approved amount shall not exceed one month of Net Take Home Pay, whichever is lower

7. Annual Financial Ceiling

·       Total salary advances in a financial year shall not exceed Nu. 2,400,000

·       This amount shall be treated as a controlled revolving fund

8. Quarterly Controls and Limits

To prevent sudden strain on working capital, salary advances shall be regulated quarterly:

·       Maximum annual advances: Nu. 2,400,000

·       Maximum per quarter: Nu. 600,000

·       Maximum number of employees per quarter: 20 employees (indicative)

Quarterly distribution across divisions:

·       Operations: Up to 8 employees

·       Technical: Up to 6 employees

·       CSD , Finance, & Accounts and independent units: Up to 6 employees

Unused quarterly limits may be carried forward to the next quarter, subject to the annual ceiling.

9. Priority Criteria (When Applications Exceed Limits)

Where eligible applications exceed the quarterly cap, priority shall be given based on:

·       Severity and urgency of the emergency

·       Death and critical medical cases

·       Employees with lower basic pay levels

·       Employees who have not availed salary advance in the previous 18 months

·       Length of service with the Company

The decision of Management shall be final and binding.

10. Recovery of Salary Advance

·       Salary advance shall be recovered through equal monthly deductions from salary

·       Maximum recovery period: 6 months

·       Recovery shall commence from the salary of the month following disbursement

·       In case of resignation, termination, or separation, the outstanding balance shall be recovered from the final settlement

11. Cooling-off Period

“Cooling-off period means a mandatory minimum gap of 12 months between two salary advances, counted from the date of sanction of the previous advance, irrespective of repayment completion.”

·       An employee may avail only one salary advance in a rolling 12-month period, except in cases of death or critical medical emergencies, subject to CEO’s approval

12. Approval Authority

·       Applications shall be routed through the HR & Finance

·       HR and Finance shall jointly verify eligibility, limits, and fund availability

·       Approval authority:

o   Up to Nu. 25,000: Division head

o   Above Nu. 25,000 and up to Nu. 40,000: CEO upon recommendation from Division Head

13. Documentation and Monitoring

·       HR shall maintain a Salary Advance Register capturing:

o   Employee details and department

o   Amount sanctioned and date

·       Finance  and HR shall monitor quarterly and annual utilization against approved limits and report to Management

14. Review and Amendments

·       This policy shall be reviewed annually or earlier based on operational or financial requirements

·       Management reserves the right to amend, suspend, or withdraw this policy at any time in the interest of the Company

15. Effective Date

This policy shall come into effect from the date of approval by Management and shall supersede all earlier informal practices related to salary advances.

 

Approved by: Management, BMML Ferro Alloys Private Limited