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Procedures

1. General information

Warranty handling procedure for


Atlas Copco Road Construction Equipment

Printed Matter Number° : 3492 0273 01


Applicable to : Atlas Copco – Road Construction Equipment Service (RCA)

2. Document overview
This document describes the following:
1. General information...................................................................................................................................................... 1
2. Document overview...................................................................................................................................................... 1
3. Purpose ........................................................................................................................................................................ 2
4. Principles ..................................................................................................................................................................... 2
4.1. General .................................................................................................................................................................... 2
4.2. Warranty coverage .................................................................................................................................................. 3
4.3. Limitation of Liability ................................................................................................................................................ 3
5. Warranty periods .......................................................................................................................................................... 4
5.1. Warranty period on Parts ......................................................................................................................................... 4
5.2. RCE engine warranties (non Atlas Copco Engines) ................................................................................................ 4
6. Reporting ..................................................................................................................................................................... 4
7. Reimbursement ............................................................................................................................................................ 5
8. Modification campaigns................................................................................................................................................ 5
9. Defective parts handling............................................................................................................................................... 5
10. Cross border sales ....................................................................................................................................................... 6
10.1. Cross border sales re-imbursement......................................................................................................................... 6

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3. Purpose
The purpose of this document is to define the warranty handling procedures applied by the RCE Division. This procedure
has to be followed by the Customer Centres which are responsible for sales and service in their respective local markets.
The document describes the principles of warranty handling, reporting methods and warranty cost reimbursement from the
Product Companies to the Customer Centres.
The General Policy on warranty handling is an important instrument for the Product companies in order to keep the warranty
costs and product quality under control and must be strictly followed by each of the Customer Centres.

4. Principles

4.1. General

Efficient handling of the Customer Centre claims for technical warranties is part of the Atlas Copco Quality image.
Technical warranties cover defects caused by faulty design, material and workmanship, only if:
• The product is used for the purpose for which it is designed.
• The product is installed, operated and maintained according to the instructions issued and published by the Product
Companies.
All warranty claims from the end-users are handled by the Customer Centres directly or via third parties authorised to do so
by the Customer Centres, and shall not be delayed by possible internal disputes on responsibilities or reimbursements.
It is the responsibility of the CC to establish routines for claim handling and reimbursement between the CC and its local
third parties in case such are used.
The RCE Division specifies clearly the technical warranty terms for each of their products and major components of the
product. The Customer Centres shall take into account, the requirements of their markets irrespective of the warranty terms
specified by the RCE Division. However, the following principle should be strictly followed in all the Customer Centres:
• Parts required for warranty jobs have to be ordered over the normal supply chain. Parts are never delivered from
the Product Companies or RCE Division “free of charge”.
• The cost of warranty repairs taken by the Customer Centres should be booked as warranty and reported back to
the RCE Division, only if the defect has occurred within the technical warranty periods.
The costs are subject for compensation from the RCE Division according to the rules specified in the warranty
reimbursements
The costs of warranty repairs taken by the Customer Centres for defects occurred out of the warranty period as specified by
this policy should be booked as Customer Centre goodwill. The Customer Centre decides how to split the goodwill between
service goodwill and/or equipment goodwill. These costs are not subject to any compensation from the Product Companies
and should be limited to exceptional cases.

Goodwill compensation to customers shall never be mixed up with Technical Warranty


claims, neither in reporting, booking nor in the communication with customers!

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4.2. Warranty coverage
Warranty is valid as long as the product is operated and maintained as described in the Atlas Copco operating manual and
its mandatory to use genuine Atlas Copco parts and consumables during the warranty period.
Wear parts are excluded from this warranty.

Exclusions:

1. Fuel, hydraulic and lubricating oil, grease, anti-freeze, air-filter elements.


2. The replacement of hydraulic pumps, motors and cylinders when the failure could have been economically repaired
by the replacement of a seal or seal kit.
3. Hoses, fittings, seals and other parts requiring replacement as the result of normal use or wear.
4. Deterioration of parts such as rubber goods or components affected as result of corrosion, chemical, electrical or
other harmful influences.

5. Failure of attachments not manufactured or supplied by Atlas Copco.


6. Failures and progressive damage resulting from the use of a non-Atlas Copco approved part, accessory or
consumable.
7. Failures resulting from improper application, operation and maintenance or repair practices.
8. Damage resulting from negligence, accidents or intentional misuse
9. Towing, cranes, hauling loading and unloading costs.
10. Loss or damage caused by transport carrier.
11. Repairs required as the result of improper handling, storage or protection by third parties or customer.
12. Third party or customers’ poor workmanship.
13. Down time, lost production costs, lost profits or any other consequential damage and costs.
14. Cost of renting or leasing a back-up unit.
15. Transportation expenses for obtaining replacement.
16. Telephone or other communication expenses.
17. Preventative maintenance or operating services, including but not limited to adjustments and inspections.
18. Freight costs will not be considered as a warranty cost. Freight charges can only be agreed to if prior agreements
with PC justify this consideration.
19. Force majeure
20. Batteries
21. Tires and Tubes
22. Non-Atlas Copco engines, as engines are covered under the Engine OEM warranty policy.

4.3. Limitation of Liability


The remedies of the user set forth under the provisions of warranty outlined above are exclusive and the total liability of Atlas
Copco or its distributors with respect to this sale or the equipment and service furnished hereunder, in connection with the
performance or breach thereof, or from the sale, delivery, installation, repair or technical direction covered by or furnished
under this sale whether based on contract, warranty, negligence, indemnity, strict liability or otherwise shall not exceed the
purchase price of the unit of equipment upon which such liability is based. Atlas Copco, its supplier(s) and its distributors
shall in no event be liable to the user, any successors in interest or any beneficiary or assignee relating to this sale for any
consequential, incidental, indirect, special or punitive damages arising out of this sale or any breach thereof, or any defects
in, or failure of, or malfunction of the equipment under this sale including but not limited to loss of use, lost profits or revenue,
interest, lost goodwill or reputation, work stoppage, impairment of other goods, loss by reason of shutdown, downtime costs,
energy costs, loss of opportunity, lost business, cost of financing, waste of time management or labour, damages (liquidated
or otherwise) under contracts with others, penalties, fines, loss of use or development of resources, or non-operation,
increased expenses of operation of the equipment, cost of purchase of replacement power or claims of users or customers
of the user for service interruption whether or not such loss or damage is based on contract, warranty, negligence,
indemnity, strict liability or otherwise.

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5. Warranty periods
Regardless of local market requirements and unless otherwise specified, the normal warranty period for new products shall
be 12 months from date of delivery to customer or maximum 24 months after date of shipment, or 1500 hours whichever
occur first. While the products are in stock, the long term parking instructions as specified in instruction manual shall be
followed. All machine commissioning status should be updated in MOL.

5.1. Warranty period on Parts


Atlas Copco Genuine Parts sold and mounted on a product by a CC or a qualified representative are covered by a warranty
period of 6 months or the first 1000 engine hours in service, whichever shall occur first but no more than 12 months after the
delivery date under the condition that the part has been subject to normal use and maintenance. If the part is not working or
damaged on arrival it should be claimed to the Distribution Centre. If the part been assembled and in use for more than a
couple of hours, it should be claimed in Warranty Online System.
The warranty will include the std cost of the part and labour to remove and replace, no travel time, mileage or miscellaneous
to be compensated.

5.2. RCE engine warranties (non Atlas Copco Engines)


Warranty claims for engines shall be claimed by the CC to the engine supplier’s authorized service workshop locally. It is the
responsibility of the CC to ensure that where required that the engine is registered with the local Engine OEM or it
representative.

6. Reporting
Warranty Reporting is an important element of Quality Assurance System for the Product Companies as a tool to deliver fast
and accurate information on technical performance of the products in the field. This to enable the Product Companies to
take appropriate measures and to eliminate the defects of their products.
All costs arising from technical problems within warranty period must be reported by the CC and acted upon by the
PC
To qualify for reimbursement the following conditions must be met:
1.
The machine must be shown as commissioned in the warranty reporting system.
2.
The warranty report with failure date within the warranty period.
3.
Accurate serial and part number data.
4.
Detailed problem description should be submitted as soon as possible but no later than 30 days after the repair
date.
For each claim the CC shall provide detailed information (e.g. work order, spare part order number, external invoices).
Should the CC fail to update a claim with requested information within given timeframes, the PC may adjust the claimed
value or deny the claim in total.
The final reported warranty cost in the Warranty Reporting System shall be equal to the warranty costs booked in the CC
financial system. Warranty denied by the PC but approved by the CC shall not be booked as warranty in the CC financial
system.
They shall be booked as Goodwill costs. This is valid only for the CC warranty reporting to the PC and not for the CC normal
financial warranty accounting. In addition to above reporting and depending on the magnitude of warranty costs in any CC,
the CC shall be capable of supplying more detailed warranty reporting, if required by the PC.

It is the responsibility of the CC to continuously report all warranty cases into the Warranty Reporting System (WOL). In this
report the Warranty Cost Information shall be filled in completely. When the CC has the final cost from the closed Work
Order it shall filled in as final cost in the Warranty Claim report.
The final costs shall be specified in parts (ex works cost level), labour (hours spent).

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7. Reimbursement

Approved warranty claims will be reimbursed at


• 100% of the ex. works parts cost
• 75% of the labour costs at fixed labour hours as per attached PC specific schedule.
• Travel time up to 10 hours travel, at 75% of labour cost, no mileage to be compensated.
• Travel costs (Like flight tickets, hotel accommodation, etc…) do not belong to labour but are part of miscellaneous
cost and are not reimbursed.
• Costs paid to third parties should be claimed as miscellaneous costs and will not be reimbursed.

The reimbursement is entirely based on the costs reported as final costs in the Warranty Reporting System. All PC
approved warranty costs will be reimbursed to the CC monthly from the PC. Warranty claims will be reviewed and
approved by the PC Technical Service Manager.

It is considered that the local Atlas Copco Service Staff has all the technical know how to handle all warranty cases. All
warranty shall be done in a cost efficient way. The condition for reimbursement is correct reporting within the timeframe as
described in this policy. The final decision to reimburse the warranty costs will be taken by Product Company after the
reports are verified. The cost will be compensated by means of a Credit Note issued by the Product Company. The credit
notes are issued in the same month as they are reported.
Failure reports containing incomplete or incorrect information will lead to NO reimbursement of the claim. The claim will be
put on "WAITING" and the reporter will be requested for additional information. After clarification with additional information
the claim will be reconsidered. Claims "WAITING" without further information after ONE month will be “REJECTED”.

NOTE – No warranty costs will be reimbursed if:


• They are not properly reported in the Service Report System according
• If parts claimed by the CC and requested by the PC to be returned is not sent to the PC
• The warranty period has expired (product safety and liability cases are excluded)
• When claimed costs cannot be confirmed upon request from PC
• A claim is not approved by the PC
• The machine is not shown as commissioned in reporting system

No invoicing is allowed from the Customer Centres to the RCE division, as far as warranty costs are concerned, unless on specific
request of the RCE responsible in the Product Company.

8. Modification campaigns
Modification campaigns initiated by the Product Company’s are published via Service Bulletins (SB). Parts are ordered over
the normal supply chain. Each bulletin involving cost compensation, describes in detail the reporting principles and the way
the cost is compensated to the Customer centres. If applicable, the costs will be handled and reimbursed together with the
other warranty claims.
In all cases there is an end date for carrying out modification campaign. If the action is completed after that date, no
reimbursement will be paid, although the action still must be carried out.

9. Defective parts handling


RCE Division can request the return of defective parts from the Customer Centres for investigations. The request for return
is made by means of an RMA (Return Material Authorization) in the warranty reporting system WOL.
Defective parts asked back must be adequately labelled, and sent to the Technical Service Department of the PC.
Parts or components associated with a warranty report shall be kept available for return to the PC for up to 90 days after the
claim has been submitted or longer if requested by the PC. The freight cost for the returned part will be covered by the PC.

Replaced parts are owned by the PC and must be handled in such a way that no additional damage is caused, all parts are
included and that they are as complete and unopened as possible. On hydraulic components all connections must be sealed
to avoid contamination internally. All returns must be clearly marked with the corresponding Warranty Report RMA number
and be returned to PC not later than 30 days after request.

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The Customer Centres are not allowed to return defective parts to the PC unless written request or approval is issued by
responsible Technical Service Manager in the responsible PC.
Returned parts become property of the product company and will not be returned nor reimbursed (except for accepted
warranty claims) to the customer centre after investigation

NOTE – Warranty reimbursement can be denied if claimed parts are not available or returned in an unreasonably
poor condition.

Scrapping of parts
If the parts are not requested back within the above mentioned definition they can be scrapped locally.

Any part or complete unit, which is exchanged and not returned to PC, has to be scrapped locally under responsibility from the local
Service Manager. This has to be done in a professional way in order to avoid that pirates get hold of it.

10. Cross border sales


In case equipment is bought in one market for delivery or use in another Customer Centre market, information regarding
cross border business and warranty handling routines should be send by the Customer centre who sold the machine to the
end-user A.C Customer centre and the machine should be transferred in MOL to the new CC.
When a warranty case happens in such case, the end-user Customer Centre claims the costs involved directly to the
manufacturing Product Company making sure the claim is identified as Cross border sale.
The claim has to fulfil to the rules in this policy (Parts, labour and miscellaneous to be reported separately).

10.1. Cross border sales re-imbursement


The selling CC must transfer the machine to the receiving CC by means of the procedure foreseen in MOL (Machine On
Line). In case of a warranty claim on a transferred machine the receiving CC will inform the PC about the cross border sales.
Approved warranty claims for cross border sales will be reimbursed from PC at:
• 100% of the parts costs at standard cost price
• 75% of the labour costs at standard cost.

Cost associated to travel and miscellaneous need to be discussed and agreed with the selling CC prior to any cost are
taken.

President - RCE Division Vice President Service – RCE

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