Annual Bonus Plan FY 16-17

Annual Bonus Plan FY 2016-2017
Compensation and Benefits-

Human Resources Annual Bonus Plan
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Tata Communications 2016 Policy FY 16-17
All Rights Reserved.
Annual Bonus Plan 2016-2017
Applicable to employees who are not covered under any other company incentive
plans
Table of Contents
1. Introduction .............................................................................................................................. 3
2. Plan Terminology ..................................................................................................................... 3
3. Scope & Eligibility .................................................................................................................... 4
4. Plan Components .................................................................................................................... 6
4.1. Company Performance ............................................................................................................ 7
4.2. Functional Performance ........................................................................................................... 8
4.3. Individual Performance ............................................................................................................ 9
5. Multipliers Company & Functional performance................................................................. 10
6. Illustration for Company and Functional Performance .......................................................... 11
7. Calculation of Bonus Payment - Illustration ........................................................................... 12
8. Plan Policies and Procedures ................................................................................................ 14

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Preamble:
In the FY16-17 Annual bonus plan the Individual recommendation range has changed in the
following way from FY15-16:
Fiscal Bottom Need Revving Vital Contributor Best in class

performer
FY16 0% 50% to 75% 80% to 110% 115% to 145%
FY17 0% 0% 75% to 120% >120% to <175%
From FY16-17 to FY17-18 the Annual bonus might change in the following ways, final plan shall
be communicated in Q1 FY17-18.
The four PMP rating classification may change to a stack rank distribution
Individual recommendation ranges will be re-defined as per the new stack ranks
1. INTRODUCTION
To achieve our business goals, we need the active participation of all our employees both in
ensuring operational excellence and in the long term strategic initiatives of the company. The
companys reward and remuneration systems are designed to drive performance, ensure
consistency and reinforce accountability. The objective of the Annual Performance Bonus Plan
(hereinafter referred to as the Plan) is to recognize and reward the contribution of employees
towards the achievement of the organizational goals.
Every Participant of this Plan has the opportunity to play a key contributory role towards the
Companys success and share the rewards commensurate with their individual contributions as
assessed by their supervisors during the annual review process.
To recognize the diversity and the nature of our enterprise, the organization is structured across
various Business and Regions supported by the Shared Services (SSs). At the individual level, the
employee is assessed and rated on:
i. Performance against each KRA (Key Result Areas) that ensure:
Alignment of individual activities to the overall strategy and Annual Operating Plan (AOP)
Flexibility to support different organizational functional objectives across the BU/ LOB/
SS/ Region
An ability to recognize and reward individual contributions and performance directly
ii. Potential based on demonstration of the Leadership Signature (DRIVE) attributes
2. PLAN TERMINOLOGY
Participants All permanent full time employees excluding those covered by another
company incentive plan.

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On-Target Bonus The variable component out of the total annual compensation of a
Participant that becomes payable when the Companys annual objectives
as defined under this plan, the functional performance and the individuals
performance are met, subject to fulfillment of other conditions of the Plan
and subject to other terms and conditions of the remuneration package
offered to the participant.
Bonus Payment An amount paid by the Company to a Participant in accordance with this
Plan.
Plan Year The current fiscal year from April 1, 2016 to March 31, 2017
3. SCOPE & ELIGIBILITY
Employees who are eligible to participate in this plan will receive specific individual information
about their participation vide their offer letters/ employment contracts at the time of joining their
respective Tata Communications company to the employee indicating eligibility of participation
in the plan. Nothing in this plan creates a right of participation.
a. All employees active as on 31st March, 2017 will be eligible to be covered under the bonus
cycle of the year subject to the following conditions:
Employees who have joined the company up to 31st December, 2016 will be paid
out bonus as per their performance rating (on a pro-rata basis commencing on their
start-date).
Participants who join between 1st January, 2017 and 31st March, 2017 will be paid
a pro-rated portion of their bonus, however their performance recommendation for
the purpose of payout will be considered on-target, unless the Participant has
been put on a Performance Improvement Plan (PIP), in which case no bonus will
be paid to such Participant.
Participants who quit or are otherwise terminated during the fiscal year will not be
eligible to receive payment unless they are serving a notice period as on 31st March,
2017, in which case they will be considered for bonus payout in accordance with
the terms of the Plan.
Notwithstanding anything herein to the contrary, Participants who have not

completed the Companys mandatory annual Tata Code of Conduct online training
and received a Certificate of Completion will not be eligible to receive bonus
payment until such time as they complete the training.
General exception to employees quitting the services of the company would be in cases
of:-
Group Transfer with continuity of service under the Group Transfer Guidelines
Death and Incapacitation
Retirement
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In Group Transfer cases, employees will be eligible for prorated payment for the duration
they were with the company. For the Bonus calculation, the Company multiplier and
Functional multiplier would be as per actual performance and Individual Performance would
be considered on Target.
In Death/Incapacitation & Retirement/Superannuation cases, employees will be eligible for

prorated payment for the duration they were with the company. For the Bonus calculation,
the Company multiplier, Functional multiplier and Individual Performance would be
considered on-target and will be paid with full and final settlement.
b. For employees active on 31st March, 2017, the actual bonus payout for 16-17 fiscal year
will be prorated for the number of days worked in the Plan Year.
c. In the event, where an employee is on paid leave (where the salary continues from the
employer because the leave is against accrued leave/ earned leave/ vacation time),
irrespective of number of days of leave, he/she would be eligible to earn bonus for the
period of such absence. For the duration where an employee is on leave without pay, the
bonus will be prorated accordingly (subject to local legal requirements).
d. Participants who are facing any disciplinary proceedings or whose services have been
terminated on account of misconduct or for cause or who are on unauthorized absence
will not be eligible to receive any benefit or payout under this Plan.
e. Payments under the Plan to eligible employees will be made only after completion of the
consolidated financial audit of annual accounts. As such, the payouts are expected to be
made around June following the close of the fiscal year.
f. Any tax liability, on account of the payments made under the Plan, will be to the account of
the employee. For participants who are not on the company payroll on the date of
disbursement, the payment under the Plan will be done only on completion of the Final
Dues Clearance process, as may be applicable in each country.
g. In the event of transfer of the employee across LOB/ Segment/ Shared Services during the
fiscal year, while the general eligibility conditions would apply, the payment of bonus in
such cases would be further regulated as follows: -
Functional Objectives pro-rated as per the tenure spent in respective Functions

during the fiscal year and Individual Performance as per the rating assigned at the
annual year-end appraisal review.
h. In the event of transfer of a Participant across different countries to other Tata

Communications entities during the fiscal year, bonus will be paid out from respective
entities in their respective location on the basis of pro-rata calculations taking into account
the time period during which the employee was on the rolls of a particular Tata
Communications Entity
For example: If an employee has worked in the UK from 1st April to 30th September 2016
and then moved to US from 1st October to 31st March 2017, then the pro-rated bonus
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amount would be provided in GBP for the time spent in Tata Communications UK and in
USD for the time spent in Tata Communications US subject to withholding tax in the
respective countries of work. These would be credited to the respective bank accounts in
these countries, the employee must ensure that they have a valid bank account for receipt
of these payments.
4. PLAN COMPONENTS
There are three main components to the Plan the Company achievement, Functional imperative
achievement level and the Participants individual achievement as further described below.
The Target Incentive of employees would be split into three parts, one each for Company,
Functional and Individual Performance and will be payable in accordance with the framework set
forth below. Employees who have been rated either in the Bottom Performer or Needs Revving
category by their supervisors at the end of the appraisal process will not be eligible to receive any
portion of their Target Incentive (as further set forth below). For the avoidance of doubt, this Plan
is discretionary and shall not be construed as guaranteed compensation by the company to
employees.
The following sections outline these components in more detail.
Weights for the Three Components
Company Functional Individual

Level/Band Performance Performance Performance
Weight Weight Weight
GMC Members* 70% 0% 30%
Executive Vice President,

Sr. Vice President, Vice
40% 40% 20%
President, Assistant Vice
President, GM/Director
Deputy General Manager,

40% 30% 30%
Sr. Manager, Manager
Other Bands 30% 30% 40%
*Note: For GMC members, Individual weight will be based on a set of cross-functional projects and
the overall multiplier will be a function of the peer-review survey.

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Example 1
40%, i.e., $10,000 will be based on Company Performance
Base Salary is $100,000 p.a.
40%, i.e., $10,000 will be based on Functional Performance
OTB is 25%, i.e., $25,000 p.a.
20%, i.e., $5,000 will be based on Individual Performance
Band is Director (B5-1)
Example 2
40%, i.e., INR 60,000 will be based on Company Performance
Salary is INR 10, 00,000 p.a.
30%, i.e., INR 45,000 will be based on Functional Performance
OTB is 15%, i.e., INR 150,000 p.a.
30%, i.e., INR 45,000 will be based on Individual Performance
Band is Manager (B3-2)
4.1 COMPANY PERFORMANCE
There are four parameters included in Company Performance and the general principles of the
bonus plans for Shared Services, BU/LOB and Segments are similar. Depending on the
Companys achievement for these components, different payout multipliers are set to calculate the
Bonus Payment as per the table provided in this document.
Imperative Key Actions and Focus Areas Measure Weight
Net Revenue 20%

Grow Revenue Profit Before Tax 5%
Achieve corporate AOP
Profitably
FY17 FCF = EBITDA -CAPEX 15%
Achieve revenues from all "New Services" at 100% as

per the AOP:
Revenue from the New
IZO, Hosting, MSS, Vconnect, Broadcast, Healthcare, 20%
Services
Shape the SIP Connect, Skype for Business GHCC, CCA SP,
Future Mobile Messaging, Media Mgmt.
Advance Partnership program:

Grow revenues from Partnerships in FY17 per defined Revenue from Partners 15%
Segment targets
Differentiated services Assurance Global Loyalty Percentile

7.5%
A more customer- friendly MSA Score (CSAT)
Become the Increased automation through Portal enhancement
SQ of Telecom and API development Reduction in annual value of
7.5%
Maintain customer based by maximizing contract terminated contracts (in MRC)
renewal rate
Further enhancement in Leadership & Capability Skills Enhancement

development programs 5%
(Target & Measurement)
Create a Great Enhance Diversity to mirror the communities where
Place to Work we work
Foster continued skills development by maintain or Enhanced Diversity Level 5%
increasing training days

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4.2 FUNCTIONAL PERFORMANCE
Functional performance will be divided into two sets one for LOBs & Segments and another for
Shared Services:
a) For LOBs and Segments
The Functional parameters for LOBs & Segments contain both Financial & Non-financial
parameters. The parameters applicable are given in the table below:
Criteria Remarks
Net / Gross GAAP revenue of the LOB / Segment

Net Revenue*
(Standalone) as per Final Corporate MIS
EBITDA - CAPEX
Key Imperative 1
Key Imperative 2 Set of parameters identified for the particular LOB / Segment
for the purpose of this bonus plan.
Key Imperative 3
#Customer loyalty
It is the percentile position of how segment specific customers
or Renewals or
respond on the same parameters.
Product Density
Overall ESAT score as per survey conducted indicates
#Employee
happiness index of employees, as per AON Hewitt standards
Satisfaction
(external agency).
* Depending on the LOB / Segment as per the Companys standard accounting practices
#ESAT and CSAT both are applicable for GM/Directors & above and for other employees only CSAT is
applicable
The various LOBs and Segments for the bonus plan are identified based on the business
structure and the key imperatives set for each of them.
b) For Shared Services
The Functional parameters for Shared Services will comprise of goals that will drive the
focus through incentives. These may include optimization of expense budget, key
measures that determine success (e.g., key SLAs) and certain identified Key
imperatives along with the Customer / Internal Customer Satisfaction Score.

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Criteria Remarks
Cost Budget (as per AOP)
Key Imperative 1
Key Imperative 2
Set of parameters identified for the particular Shared
Key Imperative 3 Service for the purpose of this bonus plan.
Key Imperative 4
CSAT / ICSAT score of the respective SS / Segment as
#Customer / IC- per survey conducted - indicates Customer / internal
Satisfaction customer happiness on services rendered by internal
business support functions.
Overall ESAT score as per survey conducted indicates
#Employee Satisfaction happiness index of employees, as per AON Hewitt
standards (external agency).
Note: In case of large Shared services, the Key Imperatives may need to be defined at
two or more levels.
#ESAT and CSAT both are applicable for GM/Directors & above and for other employees only CSAT is
applicable
The various Shared Services are identified based on the organization structure and the key
imperatives set for each of them.
4.3 INDIVIDUAL PERFORMANCE
The incentive payable for Individual contribution would be a range (rather than a fixed number)
and this percentage would be applicable on all three components. A Participants entitlement
to any Bonus Payment is dependent on his/her own individual performance and potential
based on the Performance Rating as a part of the PMP process. The range for each
performance rating is described below: -
Bottom Need Vital Best in class

Performer Revving Contributor
Incentive
0% 0% 75% to 120% >120% & <175%
Payable
One of the Key Imperative for managers (with teams) focuses on improving the ESAT Score
of their team.

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S. No. KRA Weight
1. E-Sat of the Group that the Manager is responsible for # 15%
2. Key Imperative 2
3. Key Imperative 3
4. Key Imperative 4
5. Key Imperative 5
# Only for Managers who have a team reporting to them
Important points:
Final rating that is assigned at the year-end performance review will be considered.
The recommendation provided by the manager would be applicable not just on the
Individual component but also on the Company and Functional components
For Participants in the Bottom Performer & Needs Revving categories: No Incentive
will be paid, i.e., none of the three portions (Company, Functional and Individual) will
be paid to the Participant.
5 MULTIPLIERS COMPANY & FUNCTIONAL PERFORMANCE
There will be Three Goal Posts for Company and Functional Performance defined as follows:
Minimum Goal Target Goal Post Maximum Goal

Post (1) (2) Post (3)
Incentive Payable 75% 100% 130%
For each Criterion, a Target would be defined. In addition, a Minimum Target and a
Maximum Target would be defined.
When actual performance is equal to the Target, 100% of the Incentive (linked to that
part) is payable.
When actual performance is equal to the Minimum, then 75% of the Target Incentive
(linked to that part) is payable. Incentive is not payable when Performance is below
Minimum.
When actual performance is equal to (or exceeds) the Maximum, then 130% of the
Target Incentive (linked to that part) is payable.

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When actual performance is somewhere between Minimum and Target or Target and
Maximum, then the Incentive would be prorated on a linear scale - between the
Minimum & Target and Target & Maximum.
The values for the Minimum, Target and Maximum Goal Posts would be defined as below:
Goal Post Value*
Minimum Goal Post (1) This will be either 75% of Target Goal Post
(2) or the Actual Achievement for FY16
Target Goal Post (2) This will be the AOP target for FY17
Maximum Goal Post (3) This would be 110% of Target Goal Post
* There could be certain exceptions to the definition given above based on business
outlook for company or certain BU/LOB.
6 ILLUSTRATION FOR COMPANY AND FUNCTIONAL PERFORMANCE
GoalPost-1 GoalPost- GoalPost-3 Actual Final

Criteria Weight Comments
(Minimum) 2 (Target) (Maximum) Performance Score
Meets Target,
Key
25% 7.5% 10% 11% 10% 25% full weight
Imperative 1
Meets Maximum,
Key gets 130% of
40% 45 60 66 66 52% weight
Imperative 2
Meets Minimum,
Key gets 75% of
15% 75m 100m 110m 75m 11.25% weight
Imperative 3
Between Target
& Maximum,
Key
10% 3.0 4.0 4.4 4.2 11.5% gets 115% of
Imperative 4 weight
Between
Minimum &
Key
10% 30m 40m 44m 35m 8.75 Target, gets
Imperative 5 87.5% of weight
Total 100% - - - - 108.5%

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7 CALCULATION OF BONUS PAYMENT - ILLUSTRATION
On the basis of the above parameters and weightages the final calculations will be made at the
end of the fiscal year on completion of the annual appraisal process and the auditing of the
consolidated financial statements.
Following is an illustration of the calculation of bonus:
Band Sr. Manager (B4-1)

OTB (INR p.a.) 200,000
Step 1 Split of OTB

Performance Performance Performance
% weightage 40% 30% 30%
Split of OTB 80,000 60,000 60,000
Step 2 Company Factor Calculation
Actual Weighted
Criteria Weight Multiplier
Achievement Multiplier
Grow Revenue
40% 80% 80% 32%
Profitably
Become the SQ of
35% 100% 100% 35%
Telecom
Shape the Future 15% 90% 90% 13.5%
Create a Great
10% 4.2 115% 11.5%
Place to Work
Overall 92%

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Step 3 Functional Factor Calculation
Actual Weighted
Criteria Weight Multiplier
Achievement Multiplier
Net Revenue 30% 80% 80% 24%
EBIDTA-CAPEX 30% 70% 0% 0%
Key Imperative 1 10% 90% 90% 9%
Key Imperative 2 10% 100% 100% 10%
Customer Loyalty
Score or Renewals 20% 110% 130% 26%
or Product Density
Employee 130%
0% 110% 0%
Satisfaction
Overall 69%
Step 4 Individual Performance
Rating Vital Contributor

75% - <120% (Consider 110% is given by the
Multiplier
manager)
Step 5 Final Bonus calculation

Performance Performance Performance
OTB 80,000 60,000 60,000
=(80,000 x =(60,000 x
Actual payout Calculation =60,000 x 110%
92%)*110% 69%)*110%
Actual payout 80,960 45,540 66,000
Final Payout 192,500

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8 PLAN POLICIES AND PROCEDURES
a) This Plan supersedes and makes null and void all prior plans, agreements,
understandings, communications, and documentation with respect to the Bonus
payouts for Participants. Subject to and consistent with applicable local laws, the
Company reserves the right unilaterally to change, modify or terminate the Plan, in
whole or in part, at any time.
b) Nothing in this Plan or in any other Company documents may be construed to

constitute an express or implied contract of employment for a specified period of time
between the Company and any one or all of the employees covered under the Plan.
c) The administration of the Plan is the responsibility of Human resources. Should any
question or issue arise, during or subsequent to the Plans effective period, the
participant should bring that question or issue to Human Resources. In case of
disagreement, Tata Communications Global Management Committee (GMC) has the
responsibility and authority to resolve any and all disputes that may arise with respect
to the Plan or its operation or application and the decision of the GMC shall be final
and binding.

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Annual Bonus Plan FY 16-17

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Annual Bonus Plan FY 2016-2017

Compensation and Benefits-

Compensation and Benefits-

Fiscal Bottom Need Revving Vital Contributor Best in class

ii. Potential based on demonstration of the Leadership Signature (DRIVE) attributes

Compensation and Benefits-

3. SCOPE & ELIGIBILITY

Notwithstanding anything herein to the contrary, Participants who have not

In Death/Incapacitation & Retirement/Superannuation cases, employees will be eligible for

Functional Objectives pro-rated as per the tenure spent in respective Functions

h. In the event of transfer of a Participant across different countries to other Tata

The following sections outline these components in more detail.

Weights for the Three Components

Company Functional Individual

GMC Members* 70% 0% 30%

Executive Vice President,

Deputy General Manager,

Other Bands 30% 30% 40%

Compensation and Benefits-

4.1 COMPANY PERFORMANCE

Imperative Key Actions and Focus Areas Measure Weight

Net Revenue 20%

Achieve revenues from all "New Services" at 100% as

Advance Partnership program:

Differentiated services Assurance Global Loyalty Percentile

Further enhancement in Leadership & Capability Skills Enhancement

Compensation and Benefits-

a) For LOBs and Segments

Net / Gross GAAP revenue of the LOB / Segment

b) For Shared Services

Compensation and Benefits-

Cost Budget (as per AOP)

4.3 INDIVIDUAL PERFORMANCE

Bottom Need Vital Best in class

Compensation and Benefits-

1. E-Sat of the Group that the Manager is responsible for # 15%

# Only for Managers who have a team reporting to them

5 MULTIPLIERS COMPANY & FUNCTIONAL PERFORMANCE

Minimum Goal Target Goal Post Maximum Goal

Incentive Payable 75% 100% 130%

Compensation and Benefits-

Goal Post Value*

6 ILLUSTRATION FOR COMPANY AND FUNCTIONAL PERFORMANCE

GoalPost-1 GoalPost- GoalPost-3 Actual Final

Total 100% - - - - 108.5%

Compensation and Benefits-

Following is an illustration of the calculation of bonus:

Band Sr. Manager (B4-1)

Step 1 Split of OTB

Company Functional Individual

% weightage 40% 30% 30%

Split of OTB 80,000 60,000 60,000

Step 2 Company Factor Calculation

Compensation and Benefits-

Step 4 Individual Performance

Rating Vital Contributor

Step 5 Final Bonus calculation

Company Functional Individual

Compensation and Benefits-

b) Nothing in this Plan or in any other Company documents may be construed to

Compensation and Benefits-

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