Al-Karrar Engineering.

This policy covers both Business Travel and Entertainment Expenditures. It is every employee's responsibility to remain vigilant about expenses by controlling spending and scrutinizing the costeffectiveness of business decisions.

Justification for Business Travel
1. Employees must carefully evaluate the need for business travel. Alternatives such as teleconferencing, video-conferencing or web conferencing should be considered prior to initiate travel reservations. Every effort must be made to take advantage of savings through proper trip planning.

Authorization of Business Travel
2. All overseas business trips must be approved by Chairman, CEO or COO prior to departure. If employees fail to obtain prior approval for business travel, they are liable to disciplinary action for such unauthorized trips even though subsequent approval might be obtained.

Travel Agency
3. All domestic and overseas business travel arrangements must be made through the appointed travel agencies authorized by the Chairman in order to maximize discount levels and every effort must be made to take advantage of savings through proper trip planning.

Overseas Traveling
4. Airfare entitlement is as stipulated in accordance with the Travelling Policy as amended from time to time.
a. In general, Economy Class is our standard for all cadres for domestic & international travelling.
b. For travelers who are on extended business trips for several weeks or more, it is acceptable to remain in the country or location with hotel and meal reimbursed, if the cost is cheaper than the airfare for a return to the home location.

5. Flight changes should be explained on the Travel Claim Form and unused air tickets must be returned to the HR or Accounts departments against receipt to arrange for a refund and will be subject to audit. They should not be retained for future use.

6. Any deviations from the above policy must have the prior approval of the Chairman, CEO or COO. Employees will be held personally responsible for the difference in the cost of airfare for any unapproved upgrades.

7. For ground transportation, employees are responsible for selecting the most reasonable and economical means of transportation (i.e., taxis, shuttles, airport rail or bus services and public transportation).

Travel Advances
8. Whenever appropriate employees on travel should settle business expenses by credit card or charge such expenses to company accounts. Employees may, where appropriate for prolonged business trips, apply for cash advance to meet anticipated out-of-pocket business expenses that are not chargeable to credit card or accounts. The requested amount should be indicated in the Travel Authorization Form for approval.

9. Cash advances must be reconciled against claimed business expenses. Outstanding balance due to a business trip shall be settled by employees as soon as practicable.

Frequent Travel Programs
10.Employees who join frequent travel programs do so voluntarily and are responsible for related administration. Fees associated with these memberships are not reimbursable.

11.Frequent travel programs must not impact travel arrangements. Air ticket and hotel reservations must be cost effective and in compliance with policy without regard to the frequent travel programs.

Corporate Credit Cards
12.No employee may be issued with any credit card charged to or guaranteed by company.

Mobile Phone Expenses and IDD calls
13.Business usage of personal mobile phones during overseas travel will be reimbursed only if the employee is authorized to use mobile phone services.

14.IDD calls made from hotel rooms are normally charged at a premium. Whenever practicable, cheaper modes of long-distance calls such as prepaid phone cards or portable phones provided by a Al Karrar should be used.

Hotel Expenses
15.Employees are to be accommodated in standard rooms only. Where meeting facility is required, business center should be used. Special circumstances requiring an upgrade must be submitted to the Chairman for prior approval via the Travel Authorization Form.

16.Employees should use preferred hotels as recommended by management unless the prepaid rates or the agency rates via the appointed travel agents are more competitive. Staff should plan their business travel properly so that appointed travel agents can recommend the hotel option that is the most cost efficient.

17.Laundry or dry-cleaning expenses will not be reimbursed if the duration of each business trip is less than 04 days.

18.Expenditure on in-room mini-bar facilities should be avoided or it will be considered as a personal expense, apart from acceptable levels of bottled water. Other hotel expenses such as in-room movies, fitness center costs, any tips other than the local custom and practice are not reimbursable.

Meal Expenses during Overseas Travel
19.Good judgment should be exercised when incurring the spending. HR may establish guidelines for their travelling employees for an acceptable spending on meals in line with the prevailing local practice or financial consideration.

20.During business travel, buying of meals for local employees should be minimized. Where such expenses are deemed required, the name and title/job position of each employee invited should be documented and such information provided in the Expense Report.

21.Business entertainment meals should follow the guidelines described in section Business Meal Expenditure.

Communication during Business Travel
22.To maintain effective communication within the management, employees should notify their seniors about their contact numbers and other means of communication during travel. Contact numbers and addresses during business trips should be submitted.

Business Meal Expenditure
23.Where the meal is for business entertainment, the purpose, company name, name and position of guests invited must be stated on the receipt; in general, a meal should be paid for, and claimed by, the most senior person at the meal with the exception for events with more than 10 attendees, then the event organizer could pay and claim for the expenditure.

24.All meals expenditure should be marked as "Entertainment" on the details of the Expense Report. In the event the meal is organized for a particular project, the expenditure should be charged to entertainment with a project code for summing with the other project related expenses.

25.HR could determine guidelines for an acceptable average spending on meals according to the prevailing local practices or financial consideration.

26.Expensive alcoholic beverages will not be reimbursed.

27.At department level, entertainment expenses should be monitored against the budget sum which should be established based on a reasonable spending limit per manager or senior executive on annual basis. The spending limit for position with project nature or responsibility may be established on a different scale based on the business needs.

Conferences
28.All conferences must have the prior approval from the Chairman in writing. Spend responsibly when booking such events. As the costs of such events are usually quite significant, GM should seriously weigh costs and benefits of such events before seeking approval.

29.All expenses should be recorded as Staff Cost. Overseas travel and meals incurred for the conference should follow the paragraph on Overseas Travel and Meal Expense during Overseas Travel.

Holiday Parties
30.Reasonable official lunch/dinner or holiday parties can be organized for team or department. However, these should be kept to a maximum of 2 per year and managed within the department employee activities budget.

31.All expenses should be recorded as Staff Cost on the Expense Report and the claims will be reviewed by Human Resources.

Expense Reimbursement
32.Business expenses shall be reimbursed only against claims which are signed by an employee, supported by original meal, i.e., computer-generated receipts with itemized breakdown where feasible and credit card receipts (except for settlement by cash), and approved according to delegated authority in force from time to time by his immediate senior or another person to whom that immediate senior is accountable. When expenses are incurred without supporting receipt, a remark and reason have to be stated on the Expense Report and initialed by the authorizing manager as approved or not.

33.All overseas travel expense claims should be supported by boarding passes and an approved Travel Authorization Form.

34.No claim shall be reimbursed unless it is submitted prior to the end of the second month following the month in which such business expenses were incurred (the "Settlement Period"), though in exceptional circumstances claims submitted after the Settlement Period may be reimbursed if the employee has obtained the specific approval in writing of the GM or COO. Any cash advances unreconciled at the end of this Settlement Period shall be deducted automatically from payroll.

35.No employee shall approve reimbursement of his own business expenses whether directly incurred by himself or indirectly by another.

36.All business expenses in a foreign currency will be reimbursed in the local currency or in US dollars. For foreign currency expenses paid by cash, the amount will be converted into Local Currency or US dollars at the actual foreign exchange rate printed on the receipt issued by the banks or forex bureau in which the employee did the exchange. For those expenses paid by credit card, the actual exchange rates applied by the banks as printed on the supporting credit card statements may be used. Alternatively, the Head of Finance may select an exchange rate for conversion with reference to the note-selling rates quoted by a major bank on the first day of the trip. If conversion into US dollars takes place as a result of this reimbursement process, fees and bank charges that are reasonable in the circumstances shall be borne by the company.

37.Reimbursement for all other expenses for items not specified in this policy should require prior approval by the Chairman, CEO or COO and advance written approval should be attached to the Expense Report.