Wallem Group of Companies

Business Travel and Entertainment Policy

PURPOSE

To set down the policy for employees who incur business travel and entertainment expenses and incorporating guidelines for incurring, authorizing, approving and reimbursing business travel and entertainment expenses.

SCOPE

In this policy the word “Wallem Group” or “Group” means any wholly owned subsidiary, associated or affiliated company within the Wallem Group of Companies where Wallem Group have operational control. This policy applies to all employees of the Group. Overseas offices shall apply similar practices set out in this policy but may modify the policy or impose different controls according to the local cost of living, local taxation or accounting requirements. However, Principal’s travel and entertainment policy will override this policy in the circumstance where employees travel on behalf of a Principal and are required to be in compliance with their policy.

RESPONSIBILITY AND ENFORCEMENT

All employees, who incur business travel and entertainment expenses, are responsible for complying with this policy. The person approving the business travel of an employee is responsible for reviewing the appropriateness of the business travel and the amount of cash advances. The person approving the expense is responsible for reviewing the accuracy and completeness of the Expense Reimbursement Forms (the “expense report”). Employees will be reimbursed for all reasonable and necessary expenses while traveling on authorized company business. The company assumes no obligation to reimburse employees for expenses that are not in compliance with this policy.

TRAVEL ARRANGEMENTS

A travel should generally be taken only after all reasonable alternatives, such as written communication and telephone or video-conference, have been considered, and the employee and the manager conclude that the benefit of travel outweighs the cost. To take advantage of lower airfares, travel arrangements should be made as far in advance as possible.

Travel Authorization

Before employees leave for business travel, their reporting Director must authorize such travel on the Travel Authorization Form (“the TA form”)and copies of the TA form must be forwarded immediately to the departments specified on the form. Tickets will not be issued and cash travel advances will not be advanced until the completed TA form is authorized. The TA form can be obtained from the Group’s intranet under the section of “Latest Forms” in the tab of “Document Centre”.

Travel Agency

All business travel must be booked through the Wallem Group’s appointed travel agent(s) according to the prescribed travel booking procedures. Employees are responsible for obtaining the most appropriate travel arrangements in terms of airfare, restrictions of tickets, routes of the travel etc. before confirming the ticket booking.

Employees are allowed to book their travel through non-Wallem appointed travel agent(s) only when a better travel deal is available which requires fare quote statements as proof of price difference. However, this exception does not apply to WSM employees and seafarers.

Cash advance

Currency or travelers cheques may be advanced for business travel purposes and such funds will be charged to a Travel Expenses Advance Account in the employee’s name. The advances must be reimbursed to the Group upon completion of the travel together with submission of the Expense Reimbursement Form.

Based on the actual needs of the travel and the acceptance of credit cards at the destination(s), employees shall exercise their judgment to determine if cash advance is necessary and the appropriate level of cash advance. Employees must indicate the proposed cash advance in the TA form for approval.

Combined Personal and Business Travel

If there are circumstances where employees wish to combine business travel with their personal travel or have a family member accompany them on business travel, such personal travel must be declared and advanced written approval needs to be obtained from their reporting Director.

Third party settlement of travel and entertainment expenses

Occasionally employees may appoint a port agent for their logistic and accommodation arrangements on their business travel. It is Group policy to settle travel and entertainment expenses by the Corporate Credit Card or from the cash advance. Instances of settlement of such expenses by a third party must be reported to the management and employees must not claim for the expenses that have been settled by the third party.

AIR TRANSPORTATION

Fares

The Wallem Group’s appointed travel agent(s) will advise the employee of the lowest practical airfare available and the best route with competitive fares regarding the required departure / arrival time. Employees may select their preferred airline as long as the selection does not result in an unreasonably higher airfare.

Frequent Flyer Miles

Employees are entitled to retain frequent flyer miles earned from business travel for their personal use, however, business travel and spending must never be motivated by mileage programs. Employees may utilize their frequent flyer miles to upgrade their class of service.

Class of Service

Coach class of service should be selected for all flights.

Employees may upgrade tickets at their personal expense or via their frequent flyer miles. The cost of the upgrade must not be charged to the Group.

GROUND TRANSPORTATION

Travelers are encouraged to use good judgment when selecting a form of ground transportation. Airport bus, hotel shuttles or other public transportation services are generally less expensive than a taxi for airport-to-hotel transfer and should be used whenever practical. Employees shall report the origin and the destination in the “Remark” column of the Expense Reimbursement Form. For example, overseas-transportation: Taxi from A to B.

Rental Vehicles

Only mid-size (or price equivalent) vehicles are authorized for rental unless a larger auto is needed to accommodate several persons traveling together. When several employees are visiting the same location, arrangements should be made to pool rides in order to avoid rental of unneeded vehicles.

When you rent a vehicle ensure that you are able to drive it across borders / states if your journey is likely to involve such travel.

Reporting an Accident

If the employee is involved in an accident while driving a rental vehicle, the employee should:

  • Promptly notify the rental agency.
  • Complete an accident report as required.
  • Promptly notify the Group Human Resources and Administration Department

Employees will not be reimbursed for fines and penalties imposed due to a violation of traffic laws.

Use of Personal Vehicle for Business Purpose

Employees who use their personal vehicles for business may claim for the Group mileage allowance. Such mileage allowance will pay for the running cost of the vehicle (including insurance, license, maintenance etc.) and fuel consumption. As a general practice, the Group will pay the mileage allowance of HK$ 4.5 per km with reference to the kilometers driven of the vehicle used for the business. Employees shall report the origin, the destination and the approximate distance (in km) in the “Remark” column of the Expense Reimbursement Form. For example, mileage allowance: from office to HK airport 45 km.

Parking fees, bridge and tunnel tolls are reimbursement on top of the mileage allowance.

REIMBURSABLE TRAVEL EXPENSES

Lodging

Employees are to make use of any commercial or special rate arrangements the Group, or its appointed travel agent(s), or local agent(s) has made with hotels or other lodging facilities. Employees may select the hotels available in the area if there is no commercial or special rate arrangement. However, luxury hotels (five-star classification or above) should be avoided.

Alcohol beverage excepted, mini-bar charge incurred by employees is reimbursable but should not be excessive.

For extended residence, accommodations should be arranged on a weekly or monthly basis at reduced rates when possible.

Original itemized hotel receipts must accompany the employee’s Expense Reimbursement Form when submitted for reimbursement.

It is the Employee’s responsibility to notify the hotel of a late arrival or cancellation. “No-Show” charges are to be avoided.

Fitness Centers

Hotel fitness center or gymnasium charges are reimbursable.

Meals

The reasonable cost of meals purchased by employees during business travel is reimbursable. Employees shall be conservative in their spending for meals. Employees are expected to exercise the same care in incurring expenses as a prudent personal traveler. In general, the cost of meals on a business trip should not exceed the following guidelines (net of taxes and obligatory service charges):

-BreakfastUSD 40

-LunchUSD 50

-DinnerUSD 60

The cost of refreshments incurred by employees is reimbursable provided that it is reasonable and not excessive.

Accompaniment by Family Members

Expenses incurred on behalf of non-business related travel companions, such as spouses or other family members, during business travel are reimbursable.

Incremental expenses, including meals and entertainment, incurred by a non-business related travel companion must be kept to a reasonable level otherwise the expense(s) will be for the account of the employee.

Entertainment

Entertainment expenses are reimbursable provided that such expenses are directly related to the active conduct of the Group’s business. Entertainment extended on behalf of the Group should be for the purpose of establishing, enhancing or preserving constructive business relationships with customers, vendors and other third parties and must be conducted in the manner according to the Wallem Code of Conduct “What We Stand For”.

Employees shall indicate nature of their entertainment such as a gift, dinner and the name of the client. Employees shall endeavor to specify the names, or at least the titles, of the people involved. Lavish or extravagant expenditures without strong business reasons are not allowed and run the risk of not being approved.

When a group of Wallem employees dine together, the most senior staff member is required to pay for the services. Delegating the payment to a junior staff member is not allowed.

Laundry / Dry Cleaning

Laundry and dry cleaning expenses incurred while traveling are reimbursable expenses generally for travel longer than 3 business days.

Telephone & Internet Access

All business-related telephone calls are reimbursable. Costly direct calls from hotel rooms are to be avoided. Company cellular phones should be used wherever possible. Telephone cards, Corporate Credit Card or reverse charge calls are preferred.

Personal phone calls placed while on a business travel are reimbursable provided they are of reasonable duration.

Mobile phone roaming charges can be very expensive and if you are in doubt as to the charges you might incur you can go to (for CSL Hong Kong): ” The site can also be found on the opening page of “Wallem WebAccess” under “Tariff & Service Information” – CSL IDD Roaming Tariff & Usage Guidelines.

Tipping

Reasonable amounts of tipping are reimbursable for certain services including meals and beverages, valet, bellman and maid.

NON - REIMBURSABLE TRAVEL EXPENSES

Personal Incidentals

Expenditures for personal items such as newspapers and other reading materials, haircuts, personal toiletries, shoe shines and hotel room movies are not considered business expenses and, accordingly, are not reimbursable.

Dues for Airline Clubs, Airport Clubs and Travel Lounges

Unless agreed by prior arrangement, dues for Airline Clubs, Airport Clubs and Travel Lounges are not reimbursable.

Movies

The Group does not reimburse employees for hotel movie rentals.

Personal Travel Insurance Premiums

The Group provides business travel insurance for all employees. Therefore, employees will not be reimbursed for the cost of additional travel insurance purchased by themselves. In event of loss of personal property, the loss will only be covered by the company insurance according to the terms specified and employees should not reimburse the loss of property in the expense report.

Third Party Settlement of travel and entertainment expenses

Any travel and entertainment expenses settled by third party agents will not be reimbursed.

Running Cost of the Personal Vehicle for Business Purpose

Charges for repairs and towage, depreciation, replacement of parts and consumable, gasoline, insurance and license are not reimbursable.

USE OF CORPORATE CREDIT CARD

The Corporate Credit Card (“the Card”) must only be used for business expenses. Except under the most extreme circumstances, personal expenditures must not be charged to the Card.

Unless the Card is not acceptable by vendors, personal credit cards or charge cards must not be used for business expenses when employees have been provided with the Card.

The Card is the Group’s property and it must not be lent or transferred to anyone for use. Any violation of this principle will result in the Card being cancelled and the employees will be responsible for any claims or expenses arising therefrom. Employees must comply with the rules and procedures for using the Card. The rules and procedures are set out in the attached Addendum of this policy.

EXPENSE CLAIM AND REPORTING

Expense Reporting

Employees are required to maintain a professional manner and integrity on all aspects relating to the reporting of travel and entertainment expenses and the management of associated supporting documents. Employees should remember they are spending someone else’s money and they will require explanations and will be checked by internal or external parties such as auditors or clients.

Employees are responsible for the authenticity and accuracy of the contents of their own expense report. Any falsification on an expenses claim is equivalent to an act of fraud, which is a criminal offense and renders the employee liable to disciplinary action including but not limited to summary dismissal.

All business related travel and entertainment expenses should be included in the “Expenses Reimbursement Form”. This expense form can be obtained from Group’s intranet. Employees are required to report their travel and entertainment expenses in a timely manner and should submit their expense report within 5 working days as soon as after returning to the office. Travel and entertainment expenses incurred that are more than 3 months old will not be reimbursed unless there is a valid reason for the delay.

Employees must complete their Expense Reimbursement Form in compliance with the Group’s reporting requirements. Detail explanation of the nature of expense must be provided, such as:

Settlement:Employees shall report “Credit Card” in the “Paid by” column of the expense report for items that were paid by their Corporate Credit Card. Expenses settled by other means shall be reported as “Cash” in the “Paid by” column of the expense report.

Other information:Employees shall indicate the purpose and duration of the business travel at the space namely “Trip/ date(s) of the trip / For the purpose of” of the Expense Reimbursement Form. The expense line items should be reported in chronological order.

Employees must provide the original, relevant and sufficient supporting documents to substantiate their reimbursements and shall adhere to the following rules when preparing the attachments to their expense report:

-The original invoice together with the credit card receipt should be attached for any credit card payment.

-The original invoice and receipt should be attached for cash payments.

-Supporting documents should be attached in chronological order to enable the reviewer to make an easy cross reference between the expense report and the supporting documents.

-Should an employee misplace or lose the invoices or receipts, “lost invoice (or receipt)” should be stated in the remark column of the expense report.

-The Group will allow for minor and reasonable expenses that cannot be supported by invoices or receipts such as Octopus payments and refreshment from vending machines. Employees shall provide a description of such expenses in the expense report.

The Group requires original invoices and receipts for all expenses. Copy invoices and receipts are not reimbursable and will be rejected.

End

Version – 05/2010

Addendum

HSBC (“the bank”)

Corporate Visa Card

Card Holder / :
:
:
Card Number
Valid Period
Credit Limit / :

Rules and Procedures in Using the Corporate Card

  1. This Corporate Card (“the Card”) must only be used for business expenses. Except under the most extreme circumstances, personal expenditures must not be charged to the Card. For the avoidance of doubt, medical excess charges are personal. Abuse of this system will result in the Card being cancelled.
  1. Unless the Card is not acceptable by vendors, personal credit cards or charge cards must not be used for business expenses when you have been provided with the Card.
  1. The Card is for your personal use and is not transferable. You should sign the Card and keep it under your personal control. Should there be any card loss, theft or misuse, you must report it immediately to any HSBC branch or call +852 2748 4848 (24-hour service) and report it to the police and the Group HR & Administration Department of the Hong Kong Office.
  1. You should observe the credit limit assigned to your Card. If required, you can request in advance to the Group HR & Administration Manager (+852 2876 8022) to upgrade the credit limit of your Card at the discretion of the Group and the bank.
  1. There is no annual fee for the Card. However, if the Card is lost, you will be responsible for the replacement fee of the Card when being charged by the bank.
  1. You are responsible for the personal control of the Card. When you leave employment with the Group, the Card must be returned to the Group HR & Administration Department of the Hong Kong Office.
  1. The card monthly statement should be forwarded to the respective Company’s Accounts Department for payment. Supporting documents, e.g. receipts, vouchers, persons entertained, etc., must accompany the Statement. If you are on an extended leave/business travel, the matching up of receipt, etc. must be done as soon as you return to the office. The respective Accounts Department will submit the statement, together with supporting documents, to your Divisional Director for approval.
  1. Membership fees for reward programmes, if any, will be to the cardholder’s account and will not be paid by the Group.
  1. You must read and abide the above rules and regulations in using the Card from the Group together with the terms and conditions of “Commercial Card Cardholder Agreement” issued by the bank.

For record purposes, please sign the duplicate copy of this document in agreement and acceptance of the above. Please return it to HRA upon receipt of your Card.