Explanation:

- Option 1: Dearness Allowance

- Dearness Allowance is indeed part of the compensation of employees. It's an adjustment payment made to mitigate inflation's impact on employees' earnings.

- Option 2: Tools given to employees to be used during work

- Tools provided for work don't count as employee compensation. They're considered business expenses or assets.

- Option 3: Payment by insurance company to an injured employee

- This payment is a benefit or compensation for injury, not part of regular employee compensation.

- Option 4: Contribution by employee to provident fund

- Employee contributions to a provident fund are savings rather than compensation. The employer's contribution may be a part of benefits but not direct compensation.

Therefore, Option 1 is correct.